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Level 1

Use of "class" for tracking funds

The total from class activity does not match my bank account information. All income and expense has been assigned a class, yet the total income and expense shows a greater amount than the funds actually in the bank account. What is happening and how do I correct it to get an accurate accounting for our local conference business meeting?  

6 Comments
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QuickBooks Team

Use of "class" for tracking funds

Hi there, PastorPaul.

 

I'd like to know more about this. Are you looking at a specific report? Is this the Class QuickReport?

 

If so, this report adds the total amount regardless if these are income or expenses transactions. 

 

If you're referring to a different report, you can always go back to this thread. 

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Level 15

Use of "class" for tracking funds

You did not mention if you are using Pro, or Premier/Enterprise. If you are using Premier/Enterprise, run the Balance Sheet by Class; here is the other perspective you overlooked.

 

I recommend the book Running QB for Not For Profits, by Kathy Ivens, to learn about using QB for Fund accounting and using Class.

 

This is an Invalid comparison: "yet the total income and expense shows a greater amount than the funds actually in the bank account"

 

Yes, income In is Gross, and is reduced by Expense, as Gross. That gives Net Income. That is Not Banking. Banking includes other Bal Sheet activities, such as Paying down the credit card, loans, mortgage, payroll taxes withheld from employees (liability) are Money Out, and part of the Statement of Cash Flows, not the P&L. Then you have Inflows, such as proceeds from selling assets, sales tax collections, equity, investments, etc.

 

You cannot use the P&L and think that = banking. At a minimum, run P&L, Bal Sheet, Statement of Cash Flows, and the Trial balance for the fiscal year. Also run your Sales reporting, AR and AP, if you use these functions.

 

 

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Level 1

Use of "class" for tracking funds

I am using Pro. Running the P&L by class is where I run into difficulty. The amount shown in the totals column shows an income much greater than the increase in the bank account. In other words, if the P&L by class tracks all the income and expense, and the special funds classes which have equal inflows and outflows have a zero net income does the general fund (which is the source for daily operations) show nearly twice the income as is apparent in the funds actually available in our bank account. I have a hard time explaining why if our income shows we took in an additional $10,000 why our bank accounts have only increased by $4000. It looks like money has gone missing somewhere.

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Level 15

Use of "class" for tracking funds

This is an Invalid Comparison: "The amount shown in the totals column shows an income much greater than the increase in the bank account"

 

That is Not what to compare. Did you run the Bal Sheet? Did you run the Statement of Cash Flows, which shows Cash at the beginning and Cash at the End?

 

The P&L is only Income, not Inflows, and only Expense, not Expenditures.

 

"In other words, if the P&L by class tracks all the income and expense, and the special funds classes which have equal inflows and outflows have a zero net income"

 

That's pretty unusual to have Net Income of 0 at the bottom of the P&L.

 

"does the general fund (which is the source for daily operations) show nearly twice the income as is apparent in the funds actually available in our bank account."

 

Stop comparing to Bank account.

 

"I have a hard time explaining why if our income shows we took in an additional $10,000 why our bank accounts have only increased by $4000. It looks like money has gone missing somewhere."

 

Did you Spend It? Here is the only thing that matters for Banking: Does your Checking account reconcile to the bank statement? Do all bank type accounts reconcile to the bank statements? Do debt accounts. loans, mortgage and credit card, all reconcile to the Statements? If so, this Value is not suspect.

 

Next, what you are asking is Not to compare P&L to Bank. It's P&L compared to Reality. When you compare P&L to Bal Sheet and Statement of Cash Flows, the Three Reports are required to know your reality. The P&L is only 1/3 the perspective you need.

 

And you cannot be using Pro, if you need Bal Sheet by Class.

 

I recommend the book Running QB for Not For Profits, by Kathy Ivens, for understanding  if you handled General funds and restricted funds properly.

 

Let me give you One Example: "we took in an additional $10,000 why our bank accounts have only increased by $4000"

 

I get a grant as income for $10,000. I use $6,000 to buy a disabled van with a wheelchair lift. That Never Hits the P&L; I just bought a new Asset. I traded money (an asset) for something tangible that lasts a long time = an asset. See how nothing hit P&L? So, the P&L shows $10,000 Gross minus 0 = $10,000 Net Income. This income, that Grant, is what afforded me the funds to Spend on that van. The Statement of Cash Flows shows Fixed Assets Increased this year. The Bal Sheet shows I now have $6,000 Basis in a Fixed Asset. The P&L reflects Nothing about a van.

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Level 1

Use of "class" for tracking funds

 
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Moderator

Use of "class" for tracking funds

Hi there, Beckie.

 

We appreciate your time reading the thread.

 

You are doing it right. Assigning classes to multiple projects is one way of keeping track of the company's cash flow. 

 

The Balance Sheet by Class shows the company's statement of the assets, liabilities, and capital by class. You can also run the Profit and Loss by Class. It's a financial statement that summarizes the revenues, costs, and expenses in your company by class. 

 

Here are some articles to help you more with customizing financial reports by class:

We are here to help you more with pulling up reports in QuickBooks Online. Please post comments below if you need anything else. 

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