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Tracking funds with classes

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 overall organization.

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.

To set up and use classes for funds

  1. Turn on class tracking.

    1. Open the accounting preferences.

      Opening accounting preferences
    2. Click the Company Preferences tab.

    3. 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.)

  2. (Optional) Create subclasses for funds that have a portion of their balance restricted.

    You can call the subclasses restricted and unrestricted.

  3. 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.

Limitations in fund tracking

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 Program/Project reports.

See also

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