Returning Restricted Funds to General Fund Account

Joan T · ‎April 30, 2020

Church donations were collected for a specific purpose in 2018 and a Restricted Fund account was set up. The expenses that should have come from this Restricted Fund actually came from the General Fund. So the money is still sitting in the Restricted Fund Account. How do I get it back to the Gen'l Fund? My ideas will cause the money to show up on the P&L, which it shouldn't, right?

Joan T

btks · ‎May 03, 2020

If I understand, you want to track funds received for a specific purpose without having the hassle of actual separate bank accounts. So you have set up a sub account of the main account in QB and shown those funds deposited into the sub account. Now you just need to change the source bank account on the upper left of the check form from the main account to the sub account whenever you spend any of the restricted funds and this will reduce the balance in that sub account and show when those funds have been used up.

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Anna S · ‎April 30, 2020

Good evening, @Joan T.

I hope you're having a great week. You can transfer funds between accounts if both appear in your Chart of Accounts. This will allow you to put the money from your Restricted Funds account into your General Funds account. The steps below will show you how:

Go to the + New menu and pick Transfer.
In the Transfer Funds From the drop-down list, choose the bank account that the funds are coming out of.
From the Transfer Funds To drop-down box, select the bank account the funds are being deposited into.
Enter the amount being transferred in the Transfer Amount field.
Edit the Date for the transfer and press Save and Close.

Now your church donations are in the correct account, and the amount is reflected in your General Funds account. You may find this article helpful in the process: Transfer funds between accounts.

Just hit the reply button if you have any other questions. Enjoy the rest of your week!

Joan T · ‎April 30, 2020

Anna, Thank you so much for responding!! However, the restricted funds are not in a separate bank account. They, and the General Funds, are in the same bank account. :(

MaryLurleenM · ‎April 30, 2020

Hello there, Joan T,

You don't need to move the funds since they're on the same bank account. If you follow the steps provided by my colleague, it'll still show on the parent account.

Check these articles for future reference:

Stay in touch with me if you need further assistance.

Joan T · ‎May 01, 2020

I'm so appreciative of your quick response! And I'm sorry that I'm not being clear on the issue. Both the Gen'l Fund and this Restricted account are in the same bank account. 'On paper' this money is in the restricted account. I need to move it 'on paper' back to Gen'l Fund. It doesn't need to be moved physically.

So if I take it out of the restricted account (which was set-up as a non-profit income acct) what's the other side of the entry? A QB 'Transfer' only lets me choose Balance Sheet accounts. I can't use the bank account because no money is actually going anywhere. Do I use an equity account? Which one...

btks · ‎May 03, 2020

If I understand, you want to track funds received for a specific purpose without having the hassle of actual separate bank accounts. So you have set up a sub account of the main account in QB and shown those funds deposited into the sub account. Now you just need to change the source bank account on the upper left of the check form from the main account to the sub account whenever you spend any of the restricted funds and this will reduce the balance in that sub account and show when those funds have been used up.

Joan T · ‎May 03, 2020

Thank you so much!! This is the answer!!

Abigayl · ‎December 03, 2020

I’m having a problem where this is the process we are using, so: when restricted funds come in, we transfer them to the sub account that is restricted. When we release them, we do a batch journal entry for multiple grants to put it back in the parent unrestricted account. The problem is that these are dummy accounts and we actually only have the regular bank account. When I do the bank rec, all these transactions show that never actually happened in the bank. How to I resolve that? Just make sure they zero out and check them off?

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Returning Restricted Funds to General Fund Account