I have a bank account which contain several funds within it.
When I add an expense, I want to be able to allocate it to one of the funds in that account and display the balance of each fund in the Balance Report. I’m not sure how to achieve this. I’ve setup a control account and added the bank account to it but not sure how to create these funds which are part of the bank account
What do you mean by “…which contain several funds within it.”? Bank accounts are a pool of funds, and one dollar is indistinguishable from the next. If you mean that you have the funds in the account allocated to different purposes, that makes sense, but you may have to track that separately from the bank account balance; you could set it up as different ‘bank account’ accounts in Manager, but I think that would make reconciliation, interest deposits, etc. a nightmare. If these funds are correlated to a liability (like trust accounts for legal professionals) you could set up liability accounts for each fund, so that for every debit to the bank account, there is a corresponding credit in the liability accounts, and vice versa; if this is the case, I would use ‘Special Accounts’.
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Welcome to the forum @Fred_Kroeger,
Have you considered creating multiple bank accounts and grouping them together using a Control Account for Bank and Cash Accounts.
See this guide for more detail:
Thanks all. A bit of context for my situation. It’s a church account and we have funds/monies that are gifted to us for specific purposes (which is what I mean by Fund) and they are all sitting in one or two bank accounts. To ensure that we honour the intention of where the gift is spent, we need to be able to see the balance of each “fund” and draw on those funds.
So, yes I have created multiple bank accounts and grouped them and that seems to work but I’m not sure how the reconciliation works ? I’m under the impression that I can only do a bank reconciliation on the bank accounts and not the control accounts ?
I’m guessing that the suggestion of creating all the “funds” as a liability may be an option and help with reconciliation using a bank feed?
Fred
Ok, so these funds you speak of are not actual sub accounts.
Since these funds are earmarked for specific purposes, I think the best practice is to treat them as if they are escrow accounts and create actual individual bank account for each fund offset by a liability account.
I can see how this can create a problem since there could be infinitely many projects, which could cause a problem.
I don’t have an end all be all solution outside of the best practice I just described but you have the following compromises:
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Create virtual bank accounts as previously described. You can still reconcile individual entries as normal but you will have to manually split the bank statements for your Bank Reconciliations tab.
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Keep everything in a single bank account and check your total funded status by offseting all liability accounts against this bank account. This way, you can’t earmark every fund to a liability.
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Experiment with Projects. I assume you are doing some not-for-profit accounting where donations are income so that’s that. You can use the receipt to add a couple lines like so:
| Account | Amount | Project |
|---|---|---|
| Donations | 1,000 | Fund A |
| Liability - Fund A | 1,000 | |
| Expense - Fund A | -1,000 | Fund A |
Total |
1,000 |
Later when you payout from Fund A you simply record the payment against you Liability - Fund A account.
You might also be able to create a multiple choice custom field for entries (receipts, payments) with each project as a choice, and select the project on that, and then use reports to view balance by project, but I am not exactly sure how that would work.
Unfortunately, I am afraid there is no very streamlined option for doing this in Manager, unless you actually create separate accounts with your bank, as Ealfardan suggested.
I don’t think liability accounts would work for this, as donations are generally treated as revenue, which increases equity (or whatever it is called for non-profits), not liabilities.
As you mentioned, separate ‘Bank Account’ accounts creates a problem for reconciliation, as there is no way to reconcile at the Control Account level.