@kobus_Jhg, you may have valid reasons for organizing your chart of accounts the way you have, but I do not understand it. You are apparently making provision for all kinds of things. But such accounts would normally be asset accounts, not liability accounts. You do not, for example, owe anyone outside the business for potential donations. And it sounds as though you might plan to move money in and out of those accounts with journal entries. What is the point of that?
A liability account would be used when you owe money. For example, VAT collected from your customers is posted to a tax liability account because you owe it to the tax authority on behalf of your customers. While in the liability account, it offsets the asset that resides temporarily in your bank account because you collected the tax from the customer. That money, although in your bank, does not belong to you.
Did someone advise you to set up your chart of accounts this way?
@Tut No we have done it for years. These are accounts we do not pay every month. it gets paid at the end of the year or when it is required. It is to ensure that there is sufficient funds available to do certain things. We use it as a type of a saving and that is why it is called a provision.
Obviously those funds are still in the bank account, but one can at any time check how much of what funds are available.
We do not owe anybody for something like Donations. You are correct, but the funds will be used for Donations when necessary. Then we Debit the Liability Account and Credit the Donations Account to clear the account. Then we make a payment via the bank.
With regard to the VAT. This is paid every 2nd month over to the authorities. Every 2nd month we do the journal Credit the Provision Account, Debit the Vat Account and pay the authorities via the bank.
This is an accepted way of doing it. Refer to a Google question below.
I know what provisions are. This is not the place for debate about your workflow. But you are creating more work for yourself.