cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 4

Tracking reserve balances with bank accounts

Unfortunately, the procedure in my HOA is to keep 3 accounts. Operations, Special Reserve, and General Reserve.  They used to use 3 discrete bank accounts but we now have one with 3 sub accounts so some improvement. 

 

I am thinking to create 2 classes; Special Reserve, and General Reserve. Then create a cash flow report for each filtering by one of these classes and memorizing.  This should allow the business manager to see how much money to transfer from either reserve bank sub account to the operations sub account. Probably at end of year. 

 

This seems pretty cludgy to me. 

1. Will this work?

2. Is there a better way to track spending from the reserve accounts?

 

Thanks

5 Comments
Highlighted
Level 15

Tracking reserve balances with bank accounts

It matters if you are using QB Pro; this entry level program does not manage balance sheet by class.

 

There was nothing wrong with having separate bank accounts in reality. It helps avoid commingling.

 

You need Three Classes: Operations or General or Unrestricted is the one you overlooked.

 

I recommend the book Running QB for Nonprofits by Kathy Ivens.

 

 

Highlighted
Level 4

Tracking reserve balances with bank accounts

Your answer is correct but the HOA will not record all three classes, only when they have expenditures for either of the reserves will they use the class field. Not good but that is the client's requirements. 

 

Does that mean using the cash flow by class will give me the correct adjustment to the two reserves and operating balances at end of year? Thanks

Highlighted
Level 15

Tracking reserve balances with bank accounts

Here's the problem with their concept of this: "but the HOA will not record all three classes, only when they have expenditures for either of the reserves"

 

The point of using Class, once you enable it, is to use it Everywhere and All the time. This is a Quality Assurance process. The P&L by Class should never has an Unclassified Column; that would indicate it was overlooked = an error. That's why they Always Class everything and don't assume, "Oh, Unclassified = general," because it also means Error = forgotten. You cannot manage the two conditions with One preference to just Skip that field.

 

For this question: "Does that mean using the cash flow by class will give me the correct adjustment to the two reserves and operating balances at end of year?"

 

I don't know what you are asking. Are you asking the program to Show You something you need to them enter? Because that isn't how Class Tracking works. Class Tracking = you mark all entries, and the reporting shows your effect, and you watch for Unclassified and you watch for Unbalanced Classes (Bal sheet accounts, not in Pro).

 

The program won't show you what to "adjust" but it will show you where you made bad entries.

Highlighted
Level 4

Tracking reserve balances with bank accounts

Sorry. I did not mean to confuse you

Highlighted
Level 4

Tracking reserve balances with bank accounts

The solution was simpler than I imagined. I would not have thought of it without our discussion. 

The HOA has a 

  • Checking account with the management company (Operations)
  • A checking account to transfer funds with a $1 balance (Opertions)
  • A savings account comprised of three sub bank accounts 
    • Operations
    • Special Reserve
    • General Reserves

My solution was to have the management company do a funds transfer from the General Reserve savings sub account and the Operations savings sub account for the exact dollar amount of the check written. That had the effect of "reimbursing" operations from the general reserve and my accounting was whole. Thanks

Need to get in touch?

Contact us