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Enter beginning balances for funds

A fund's beginning balance is the total amount of money available to spend for the purpose of that fund. It does not necessarily correspond to a bank account balance, because you may have one fund's money split among two or more bank accounts. This section deals with fund balances regardless of how many bank accounts actually contain the money.

Determine the correct fund balances before proceeding.

Be sure to include in each fund's balance any accounts receivable or payable for that fund. Accounts receivable increase the fund's balance, and accounts payable decrease the balance.

To do this task

  1. Set up your actual bank accounts with the correct beginning balances for those accounts in QuickBooks. See Adding new accounts.

  2. Calculate the beginning balances for all your funds.

    The total amount must equal the amount you have in your bank accounts plus any outstanding accounts payable or accounts receivable for all funds.

  3. Create a QuickBooks income account called Fund Transfer Income and create an expense account called Fund Transfer Expense.

    These accounts are used only in general journal entries to enter or adjust fund balances and they always cancel each other out.

  4. Go to the Company menu and click Make General Journal Entries.

  5. In the Make General Journal Entries window, make sure that you have assigned a class to each fund you want to track.

  6. Click the Account drop-down list and choose the Fund Transfer Income account, enter the total for the first fund under Credit, and select the fund under Class.

  7. Repeat for each fund you have.

  8. After you've entered the last fund balance, press Tab. You'll see a balancing entry on the next line under Debit, equal to the total for all your funds entered in the Credit column.

  9. Choose the Fund Transfer Expense account on the last line (where you see the balancing entry under Debit).

    Do not select a class on this line.

To check your beginning balance entry, create a Custom summary report. See Checking your fund balances periodically.

KB ID# H_NNP_ENTER_BEGINNING_BALANCES_FOR_FUNDS
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