Fund Accounting Initial Set-up

Question regarding setting up for fund accounting:

I just bought your Basic Church Accounting and Fund Accounting eBooks and they were very helpful in understanding what we need to do to use fund accounting.

We are now in the process of setting-up our different funds for 2010 and we have the following questions:

1. Do we need to transfer the 2010 budgeted money from the General Fund to each fund at the start of the year or do we transfer on a monthly basis or only when an expense is incurred?

2. You listed 2 Methods of how to set up in QuickBooks which of these methods will allow us to print separate balance sheets for each fund? Our bookkeeper said he can print separate Profit & Loss reports but he can only generate one overall Balance Sheet.

3. We received a donation of $30K specifically to paint the Church. Do we need to set-up a separate restricted fund for it or could we just mix it with our Building Fund?

Thank you so much for your help.


Question #1: I would transfer it at the beginning of the year. You can transfer funds from the general funds to restricted funds anytime it is needed (check your church policy, sometimes this requires board approval); however, you can’t (without the donor’s permission) transfer monies from a restricted fund to the general fund.

Set up your funds at the first of the year and then post income and expenses to the proper fund as they occur.

Question #2: He’s right. I do not know of a way to set Quickbooks up where it will print off a separate balance sheet for each fund.

You can print off a Balance Sheet report to see how much is left in each fund or you can run a Transaction Detail Report to get a summary of the income and expenses for each restricted fund for a certain time period...just filter those accounts for the date range you need. (I would memorize it so it would be available when you need it...just have to change the dates)

Question #3:
Since a fund is something restricted for a particular purpose and considering the size of the donation, I would set it up as a separate fund; however, if it is just one donation coming in and one expense (painting contractor) going out you could put it under the building fund. That choice is up to you and your church.

Hope This Helps,

Church Accounting Package

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