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OJISDA
Level 1

Non-Profit Restricted vs Unrestricted Funds & Budget Lines

Hi All,

 

I am helping a small non-profit start utilizing QBO Plus. They are using CASH accounting for now, but we are setting up for a quick growth and ensuring good practice from the start. Two Questions:

 

I am planning to use the following:

- Class will be for Program, Admin, Fundraising

- Customers / Donors will be used for grant specific income

- Tags will be used for specific Events which will be tracked

 

Question 1:

I am trying to figure out the best way to manage restricted and unrestricted funds. Do I need to create a different account for each: e.g.

 

Revenue (#4000)

Restricted (#4100)

- Individual Contribution (#4110)

- Corporate Contribution (#4120)

- Foundation Contribution (#4130)

Un - Restricted (#4200)

- Individual Contribution (#4210)

- Corporate Contribution (#4220)

- Foundation Contribution (#4230)

 

Or is there an easier solution which will work well for reporting and segregation of this data?

 

Question 2

We have donors which have 'non-accounting' type of budgets, what would be the best method to track budget lines for each expense, to pull donor reports, mapped by non-accounting categories? Creating a tag group and listing each budget line?

 

Thanks for any advice.

Mike 

3 Comments 3
LollyNino_C
QuickBooks Team

Non-Profit Restricted vs Unrestricted Funds & Budget Lines

Thanks for reaching out to us on the Community page, Mike. 

 

In regards to your restricted fund accounts that are created for charities, you can also create these accounts themselves in QuickBooks in the chart of accounts section, but there isn't any specific functionality for this in the Quickbooks product.

 

You may set up your income and expense categories by going to the Chart of Accounts. Additionally, I advise speaking with an accountant about the proper account type and level of data to use when handling unrestricted, limited, and designated charitable contributions. This is to ensure that you're appropriately generating categories.

 

Once you determine their exact account and detail type, here's how to set up the categories:

 

  1. Hover to the Accounting menu and then select Chart of accounts.
  2. Click New.
  3. For expense, choose the Expense Account Type and select a category in the Detail Type. And for income, pick Income Account Type and then pick a category in the Detail Type drop-down. 
  4. Name the account and enter additional details.
  5. Click Save and Close

 

I'm adding this article for more details about keeping your categories organized: Add an account to your chart of accounts in QuickBooks Online.

 

If you have more questions about the category set up in your accounts, please let me know. I'll get back to help. Have a nice day and take care!

OJISDA
Level 1

Non-Profit Restricted vs Unrestricted Funds & Budget Lines

Thanks Lolly, I get the Chart of Accounts - I was specifically wondering if anyone had some real life example of how they set up theirs for Restricted / Unrestricted.

 

Additionally, any thoughts on how best to handle Question 2?

 

Thanks again, Mike

CharleneMaeF
QuickBooks Team

Non-Profit Restricted vs Unrestricted Funds & Budget Lines

Thanks for getting back on this thread, Mike.

 

It's our priority to ensure you'll set up your restricted and unrestricted funds and track budget lines for each expense for your donors.

 

I'd recommend consulting an accountant to guide you when recording the budget lines and provide some real-life examples to set up the restricted and unrestricted funds. If you don't have one, you can use our Find-an-Accountant tool to look for an expert near you.

 

Also, I've added this article that'll help you in reviewing your QuickBooks accounts to make sure they match your bank and credit card statements: Reconciling Workflow.

 

Keep us updated if you have any concerns or questions about managing your QuickBooks transactions. This way, we'll be able to provide the help you need.

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