Looking for help with something that is way beyond my accounting knowledge.
My organization received grant money during COVID which I entered as income in our bank account using Grant Funds Received as the income account.
We want to track any payments made using the grant funds so we know how much of them are left.
As an example, let’s say we write a check on our bank account for $500 for Office Supplies which we want to come from the grant funds. What entries should I use to record that the payment was made from the grant funds and that it was for Office supplies?
I tried creating an expense account Grant Funds Spent and using it for the $500 payment but that doesn’t record the payment as Office Supplies. Conversely, if I categorize the payment as Office Supplies, I lose the fact that it was paid from the grant funds.
Thanks for the links. They seem to be saying how to deal with this on a tax return but our organization is a non-profit that does not file a tax return because our gross income is less than the limit where that is necessary.
Let me try to state the problem a different way.
How can I pull a report (custom if necessary) that shows me all the income and expenses paid from the Grant fund along with the related expense account for each expense? I’d be OK if it had to be 2 reports, one for income and the other for expenses.
In essence the only difference between a profit and a non-profit is related to taxes but not to recording income and expenses. So not clear why the provided guidance is not suitable. Please explain why you think that was was offered as solution does not work for you.
Let me add why would the Profit and Loss account not work? Even non-profits have to recognize grants as income be it no tax at the end of the day and that is what you would do when filing the papers.
I understand that and we are recognizing the grant as income into our bank with an account of Grant Funds Received.
I’m fine using the Profit and Loss report, the problem is I can’t figure out the transactions to enter in Manager that keeps track of how much of the grant funds we’ve spent and at the same time, using my original example, show how much we’ve spent on Office Expenses or any other expense we might pay from the grant funds.
Yes, I thought of that but we’re already using projects to record all our income and expenses so the $500 in my example would already have a project associated with it. That’s assuming you mean Division when you say Project.
I’m in Australia. This post may help. You should check with your accountant, but this is how I was advised to set it up initially by my accountant/auditor.
