How to Track Donation for a Particular Purpose in QuickBooks
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:
- 1001-Horse # 1
- 1002-Horse # 2
- 1003 through ???? (each individual horse
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!
Your classes should look something like this:
Caring for Horses
Permanently restricted funds:
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”.
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.