Any Accountants Who Work with Non-Profits/Govt?

[goldberry]

This is almost embarrassing to ask, since I have done bookkeeping for 25 years or something.  But I am now doing small local government (a fire station) and for some reason I can't wrap my mind around some things.

 

I need to set up certain funds.  Say if we get a grant, and that money has to go to certain expenses only.  I have been told by two people now that I take the money (on paper) and move it to the fund account, then pay bills offsetting that fund account rather than the bank account like you would normally.

 

This makes no sense to me, because the bank balance will always be wildly off, and then how do I balance the bank statement ever, because all the detail will be going to that other account?

 

I'm not seeing how to make the individual bills or transactions show both in the bank account and then in the fund account.  I feel very frustrated that I can't figure this out! 

 

 

[LucyStoner]

1. Are you using QuickBooks? If so, which version? It's a little trickier in the regular rather than nonprofit version to account for restricted funds but the nonprofit version is so annoying I usually don't use it.

 

2. How I treat a restricted grant depends on "how restricted" the money is and how long it will take to use the funds. Many funders are satisfied with expense reports showing that the amount we spent on x is equal to or greater than the grant that they gave us and other grants restricted to the same purpose. For all practical considerations, that's restricted in name only, especially if you will spent it the same year you got it. On the other end of the spectrum, for some restricted funds it makes the most sense to deposit those funds into an actually separate bank account and then name that bank account Bank Name-Name of Purpose of Funds. For example: Chase Computers. This makes the most sense for funds that you expect to use over several years and seriously can not commingle the funds. You would then reconcile that account each month. For each, I use class codes.

 

3. It's unclear but what you are being told to do sounds like mayhem. How would you balance the accounts with the bank if you used two accounts to record 1 checking account.

 

4. Have you used class codes? Those are helpful for restricted funds. Here's a quick and dirty overview.

 

 

http://smallbusiness.chron.com/track-restricted-funds-quickbooks-59057.html

 

As a disclaimer, my experience is exclusively with nonprofits and foundations and I have zero government experience.

[SamanthaCarter]

This might help with the overall picture. https://nonprofitsassistancefund.org/sites/naf-prod/files/publications/managing_restricted_funds.pdf

[goldberry]

1. Are you using QuickBooks? If so, which version? It's a little trickier in the regular rather than nonprofit version to account for restricted funds but the nonprofit version is so annoying I usually don't use it.

 

2. How I treat a restricted grant depends on "how restricted" the money is and how long it will take to use the funds. Many funders are satisfied with expense reports showing that the amount we spent on x is equal to or greater than the grant that they gave us and other grants restricted to the same purpose. For all practical considerations, that's restricted in name only, especially if you will spent it the same year you got it. On the other end of the spectrum, for some restricted funds it makes the most sense to deposit those funds into an actually separate bank account and then name that bank account Bank Name-Name of Purpose of Funds. For example: Chase Computers. This makes the most sense for funds that you expect to use over several years and seriously can not commingle the funds. You would then reconcile that account each month. For each, I use class codes.

 

3. It's unclear but what you are being told to do sounds like mayhem. How would you balance the accounts with the bank if you used two accounts to record 1 checking account.

 

4. Have you used class codes? Those are helpful for restricted funds. Here's a quick and dirty overview.

 

 

http://smallbusiness.chron.com/track-restricted-funds-quickbooks-59057.html

 

As a disclaimer, my experience is exclusively with nonprofits and foundations and I have zero government experience.

 

I am using regular quickbooks. 

 

Class codes!  I never thought of that!  I have a client that has three locations that I've used class codes to track for years, but I didn't think about them to track restricted funds.  Yay!  Thank you Katie!

[goldberry]

This might help with the overall picture. https://nonprofitsassistancefund.org/sites/naf-prod/files/publications/managing_restricted_funds.pdf

 

Thank you for that, it does help with understanding.  Fortunately, we have a CPA trained in governmental accounting to do the auditing and state reports.  Mostly I am dealing with a Budget Performance format to report activity to the board.  They want to see what we had to spend and how much was spent so far, etc. Also fortunately, we typically only have funds that are restricted during the year and don't cross over.  I actually think the class tracking will be just what I need. 

[LucyStoner]

I am using regular quickbooks.

 

Class codes! I never thought of that! I have a client that has three locations that I've used class codes to track for years, but I didn't think about them to track restricted funds. Yay! Thank you Katie!

That's what I use them for at most of the non-profits I've set up on QBs or kept the books for. Glad that was helpful.