How to Track Restricted Funds in QuickBooks

QuickBooks, a popular accounting software, does not directly support tracking restricted funds. However, it is possible to use classes to assign and track restricted funds, enabling users to generate reports that specifically show restricted fund activity.

Key Facts

  1. Enable class tracking in QuickBooks:
    • Click on the “Edit” menu and select “Preferences”.
    • Choose “Accounting” and go to the “Company Preferences” tab.
    • Check the box for “Use class tracking for transactions”.
    • Optionally, select the “Prompt to assign classes” checkbox if you want a reminder to assign classes.
    • Click “OK” to save the changes.
  2. Set up a class category for restricted funds:
    • Go to the “Lists” menu and select “Class List”.
    • From the “Class” drop-down menu, choose “New”.
    • Enter a name for the class, such as “Restricted Funds”.
    • If you want to create subgroups of restricted funds, you can make the class a subclass of another class.
    • Click “OK” to save the class.
  3. Record transactions with restricted funds:
    • When entering income or expense transactions, assign the appropriate class to the transaction.
    • Select the class “Restricted Funds” for transactions involving restricted funds.
    • Make sure to assign the class consistently for all transactions related to restricted funds.
  4. Run reports to track restricted funds:
    • To view a report specifically for restricted funds, go to the “Reports” menu.
    • Select “Company & Financial” and choose the “Profit & Loss by Class” report.
    • Customize the report as needed to filter and sort by class.
    • This report will show the income and expenses associated with the restricted funds class.

Enabling Class Tracking

  1. Navigate to the “Edit” menu and select “Preferences.”
  2. Choose “Accounting” and go to the “Company Preferences” tab.
  3. Check the box for “Use class tracking for transactions.”
  4. Optionally, select the “Prompt to assign classes” checkbox for reminders.
  5. Click “OK” to save changes.

Setting Up a Class Category for Restricted Funds

  1. Go to the “Lists” menu and select “Class List.”
  2. From the “Class” drop-down menu, choose “New.”
  3. Enter a name for the class, such as “Restricted Funds.”
  4. Create subclasses if necessary by selecting “Subclass Of” and entering the parent class name.
  5. Click “OK” to save the class.

Recording Transactions with Restricted Funds

  1. When entering income or expense transactions, assign the appropriate class.
  2. Select the class “Restricted Funds” for transactions involving restricted funds.
  3. Ensure consistent class assignment for all restricted fund transactions.

Running Reports to Track Restricted Funds

  1. Go to the “Reports” menu.
  2. Select “Company & Financial” and choose the “Profit & Loss by Class” report.
  3. Customize the report to filter and sort by class.
  4. The report will display income and expenses associated with the restricted funds class.

Conclusion

By using classes and following these steps, QuickBooks users can effectively track and manage restricted funds. This allows for transparency and accountability in handling funds subject to specific restrictions.

Sources

FAQs

How do I enable class tracking in QuickBooks?

Go to Edit >; Preferences >; Accounting >; Company Preferences tab. Check the box for “Use class tracking for transactions.” Click OK to save changes.

How do I create a class for restricted funds?

Go to Lists >; Class List. Click New. Enter a name for the class, such as “Restricted Funds.” Click OK to save the class.

How do I assign the restricted funds class to transactions?

When entering income or expense transactions, select the “Restricted Funds” class from the Class drop-down menu.

How do I run a report to track restricted funds?

Go to Reports >; Company & Financial >; Profit & Loss by Class report. Customize the report to filter and sort by the restricted funds class.

Can I create subclasses for different types of restricted funds?

Yes, you can create subclasses by selecting “Subclass Of” and entering the parent class name when creating a new class.

How do I ensure accurate tracking of restricted funds?

Consistently assign the restricted funds class to all related transactions and regularly reconcile your accounts to verify the accuracy of your records.

Can I use QuickBooks to track multiple restricted funds?

Yes, you can create separate classes for each restricted fund and assign transactions accordingly.

What if I need to make changes to the restricted funds class or transactions?

You can edit the class or transaction details as needed. However, it’s important to maintain the integrity of your records and document any changes made.

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