If you want to track one or more funds in your nonprofit organization,
QuickBooks classes give you a convenient way to separate income and expenses
for each fund, including your general fund. (The general fund consists of the
unrestricted money that the organization can spend as it wishes.)
When you set up and use classes to identify transactions with funds, you can
see a profit and loss report by fund and you can see detailed transaction
reports. QuickBooks also enables you to see how much money you have in each
fund or in several funds together. This is in addition to reports on your
By using this method, you can also see expenses from the general fund (that
is, your overhead) for any period of time, as a percentage of other fund
expenses. This is often an important value that nonprofit organizations must
report to their benefactors.
Turn on class tracking.
Open the accounting preferences.
Click the Company Preferences tab.
Click the Use class tracking checkbox.
Create a class for each
of your funds, including the general fund.
For example, your classes could be building fund, outreach fund, and general
fund. (The general fund consists of the unrestricted money that the
organization can spend.)
(Optional) Create subclasses for funds that have a portion of their balance
You can call the subclasses restricted and unrestricted.
Whenever you enter sales, checks, bills, credit card charges, or other
transactions in QuickBooks, select the appropriate class (or subclass) in the Class field.
For example, if you write a check for building repairs and want that charged
to the building fund, you might choose a class called "Building fund"
in the Class field.
Although QuickBooks provides you with a procedure for determining your fund
balances (see Checking your fund
balances periodically), it cannot give you a Statement of Financial
Position (balance sheet) by fund/class report. It can, however, give you a
Statement of Financial Income and Expense (profit and loss) report by fund
(class), as well as a Statement of Functional Expense report. You can use these
reports to help categorize your income and expenses correctly so that you save
time filling out IRS Form 990. If you set up funds as classes, you can also do
real-time monitoring of your funds by using the Programs/Projects and the Budget vs. Actual by
Other uses for classes (besides
balances for funds
Using nonprofit-specific reports