Question

Nonprofit funds using location vs class

Forum|Forum|4 years ago
January 11, 2022
1 reply
17 views

Hello Everyone

sorry if this topic was discussed before. I’m relatively new to using QBO for nonprofit fund accounting and reporting.

our organization some funds currently 7 of them and don’t expect them grow significantly overtime.

I have two questions that I appreciate your advice with:

1. I see that we can use Location or Class to track and report on Funds. I see use if location is simpler to use than classes with one caveat. With location as the fund a transaction (e.g sales receipt) can’t span more than one fund. Is that the only disadvantage? Anyone have sued location as the fund and can tell us about their experience!

2. when creating sub bank accounts for funds, how do we ago about allocating sales receipts funds moved from Undeposited Funds to correct bank sub account created for the correct fund? How would deposits that span funds work?

Appreciate any help!

QuickBooks Online

JenoP

QuickBooks Team

Hi there, ANaser.

We want to make sure that we give you the right information. What do you mean by "deposits that span funds work"? Can you give us more details?

Please add a reply to add more details.

A

ANaserAuthor

don't know why early reply got lost! here we go again

In response to the specific question on when a deposit spans multiple funds, it is best done with an example

Assume we have two funds: General and Buildings. There are represented as two locations as well as two bank sub accounts as follows: Green Bank 4123: General and Green Bank 4123: Buildings

We receive a $1000 check donation and the donor states that $600 goes to Buildings and $400 goes to General.

We create two sales receipts against Undeposited Funds, $600 with location is Buildings and $400 with location General.

The $1000 check can be only deposited as one transaction in the bank.

If we don't create a Deposit in QBO and try to match the $1000 bank deposit to the two sales receipts then QBO will track a balance change directly on Green Bank 4123 of $1000 instead of $400 in Green Bank 4123: General and $600 in Green Bank 4123: Buildings.

If we create a deposit of $1000 in QBO to combine the two sales receipts still we can't split the deposit across Green Bank 4123: General and Green Bank 4123: Buildings.

I don't think this problem will be different even if we used classes to track funds, because we still need to use Bank subaccounts for quick visibility of fund balances.

Please answer to this particularity and the original part asking about use of locations vs classes to track funds. If there are no big issues we prefer to use locations to represent funds and classes to represent programs and campaigns.

AlexV

Level 10

Hi ANaser!

Let me explain how you can use these tracking features in recording sales receipts.

You are correct with regard to depositing funds. Although you created two sales receipts, it'll reflect as one transaction on your register when you deposit them together. You'll want to deposit them separately to each sub-accounts. Note that the transactions and balance of each sub-accounts will roll up into the parent account.

Class and location work almost the same. The difference is that class can be added either to the entire transaction or to each line item while the location is only to the entire entry. Yes, you can use the location to track funds and class for a more detailed segment like programs or campaigns.

I added articles you can check to learn more on how to deposit funds and how to manage sub-accounts:

Lastly, here's the link if you need help in running, customizing, and saving reports: Run reports in QuickBooks Online.

Post again here if you have more questions in tracking funds. I'm here to help.

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