How to Track Donation for a Particular Purpose in QuickBooks |

I hope you don’t mind, but I have what a hope is a quick question. I volunteer at a non-profit horse rescue and sanctuary and I try to help with their books.

We are trying to implement using Classes. I am reading and trying to get my arms around the concept of using classes.

We rescue horses and try to educate the public about properly caring for horses.

… for Program Classes, we are thinking about using:
- 1000-CaringforHorses
- 1001-Horse # 1
- 1002-Horse # 2
- 1003 through ???? (each individual horse
- 6000-EducatingthePublic
- 7000-Admin
- 8000-Fundrasing
- 9000-RestrictedFunds
- 9001-TemporaryRestrictedFunds
- 9002-UnrestrictedFunds
- 9999-Other

Where I am getting confused is…

- When a donor donates money for a particular horse’s care, do I need a subclass for each horse we care for so we can break down the reports?
- Should all donations that are unrestricted be entered into the Unrestricted Fund class and then moved to the individual “Horse” class when spent?

I am not a bookkeeper. Our CPA does not use QuickBooks and I’m trying to learn QuickBooks and use it correctly.

Any help or advice you can give would be greatly appreciated. Thank you so much!

I’m not a CPA, but I believe that a donation for a specific horse would qualify as temporarily restricted funds. Unrestricted funds are only for general donations not tied to any specific purpose.

Your classes should look something like this:

Unrestricted:
Admin
Fundraising
Programs
Caring for Horses
Horse 1
Horse 2
Educating Public

Temporarily restricted:
Designated Donations
Horse 1
Horse 2
Capital Campaign
Grants
Grant 1
Grant 2

Permanently restricted funds:
Endowment 1
Endowment 2

All designation donations should be booked to the appropriate temporarily restricted fund and then transferred to the unrestricted fund once the restriction has been released i.e., the funds spent for the designated purpose).

All funds should be spent out of the unrestricted funds.

The designated funds will have donations (revenue) and transfers to the unrestricted fund (expense).

The unrestricted funds will have transfers from the temporarily restricted fund (revenue) and program expenses (expense).

At year-end, you’ll use the net income on the Profit & Loss by Class report to allocate retained earnings to the appropriate fund balance. Because of that, I like to rename the QuickBooks-created retained earnings account ‘Needs to be Allocated”.

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This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice. For further information, please consult appropriate professional advice from your attorney and certified public accountant.

Ruth Perryman - QuickBooks Specialist Written by +Ruth Perryman, CMA, CFE, CFM, MBA

Ruth is the president of The QB Specialists, an Intuit Premier Reseller that offers huge savings and expert advice on QuickBooks POS and QuickBooks Enterprise. She is an Advanced Certified QuickBooks ProAdvisor and a member of Intuit’s Trainer/Writer Network. She is also certified in QuickBooks POS and QuickBooks Enterprise and has provided expert QuickBooks help to thousands of businesses all over the world since 1996.

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