Quickbooks and Fund Accounting

by Sherry
(Maryland)

Question on fund accounting in QuickBooks:


Thanks so much for your site! I am the secretary for a small church and am responsible for helping our new Treasurer set up the new Quickbooks Premier for Non-Profits software.

The problem is that neither one of us has ever used Quickbooks, and we don't know much about accounting. Quickbooks assumes you already know what you're doing, and though they advertise this software for non-profits, there isn't much non-profit specific help offered - unless, of course, you want to pay for extra support!


Your info on setting up classes in Quickbooks was just what I needed, but I'm still not sure if I'm doing this correctly. I set up a chart of accounts that includes all of our income "accounts", such as Altar Flowers, Tithes & Offerings, Spaghetti Dinner Fundraiser, Building/Property, etc. I also set up expense accounts according to each income account that is temporarily restricted, and each budget line-item, (numbered to correspond with the line item of our budget).

I set up three classes: General Fund,unrestricted, Temporarily Restricted, and Permanently Restricted. I'm confused as to how to proceed, though.

You mention setting up "funds" as subclasses under these, but I don't know what funds to list, or how many I need. Should they correspond with our Budget Item Headings, such as "Worship", "Education", "Building/Property" - all of which get both restricted and non-restricted income, or should they be more specific, such as "air conditioning fund", "new computer fund", etc.?

I think I am confusing "funds" with "accounts". Can you clarify?

Vickey's Reply

To determine if it is a fund or just an account, ask yourself if it has its own income coming in and its own expenses going out...if it does...you could set it up as a fund. However, you do not want to overdo it on setting up funds as it gets more difficult to post transactions if you do.

For example...you may want to consider setting up the new air conditioner fund as an income account titled something like “New AC” and then post it to the Building/Property (class) fund. I am assuming you are raising money for the new AC through offerings or fundraisers...if it something the church is just purchasing and does not have its own income coming in...it would just be an asset purchase.

As far as the subclasses, I was referring to putting all funds under the category it would belong to such as Building under Temporary Restricted if it meets the criteria of being temporary restricted and Worship under General and so forth. Just make sure you post to the subclasses and NOT the parent class.

A great book I have found for setting up and maintaining QuickBooks for nonprofits is: Running QuickBooks in Nonprofits





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