Direct Transactions against Fund Accounts

Hello again ACCOUNTS advisors. Sorry to have so many blog posts in a row!

I’ve been rethinking some warnings in the program against saving transactions that involve both an asset account (such as a bank) and a fund (equity) account. They warn that this is probably wrong, because you should be using an income or expense account that is linked to the fund account instead.

The more I think about it, the more I can only think of two situations where you would reasonably actually post a transaction directly against a fund account.

The first is to enter an opening balances transaction, involving potentially all accounts, which can be done most easily with the new Actions -> Opening Balances menu option.

The second is an inter-fund transfer, such as transferring money from the General Fund to the Building Fund.

I just can’t think of any other valid transaction that directly posts to a fund account. So I’m inclined to disallow anything else (except possibly in a journal entry, but even then, with a warning!).

Please let me know if you agree, or if you disagree, describe the transaction(s) that you believe are valid.

Thank you.

12 thoughts on “Direct Transactions against Fund Accounts

  1. Hi Dan Depending on how some churches may have their fund accounts setup, some may need to credit interest to them with a month end journal entry. We don’t, as we train any interest for operating funds but some flexibility to do a journal entry is important. Cheers Karen

    Sent from my IPhone

  2. Oh and I just realized that an interest entry to a fund account would go thru an INCOME account, so you wouldn’t do it by journal anyway Hmm…now I can’t think of any other entries you’d need to so to a fund account by journal! Keep up the final edits! Karen

    Sent from my IPhone

  3. OK, everyone seems to agree with this. I have made the following relevant changes in version 0.91, that I just uploaded to the web site:

    – The Enter Deposits, Write Cheques, Credit Card Charges and Enter Bill windows now all don’t allow you to use a Fund/Equity account in one of the split rows, which is almost certainly wrong (you should use an income or expense account associated with that fund instead).
    – Similarly, register windows now check for using both Fund accounts and non-Fund accounts in the same transaction and do not allow that. Only journal entries allow that, but they also warn you strongly against doing so.

  4. Dan:

    I totally agree with what you say below. I would want to put in an opening balance. I only use Income or expense accounts. I never use the word Fund. Being a small charitable we only have one fund, no building or other, just a general fund.

    Audrey Saunders

    • Audrey, it’s fine if you have only one fund, and then you would defintely never post anything directly to it, except for the Opening Balance. (Of course, ACCOUNTS really shines for those users who have multiple funds. There’s no real “win” over something like QuickBooks otherwise, except perhaps for a level of simplicity because there are fewer features.)

  5. I would agree generally with your conclusions on fund related transactions. I’m wondering, however, about a benevolence fund related expenditure. I post those directly to an account I maintain for benevolence fund expenditures since they don’t normally relate to any other GL expense account??

    • You’re exactly right, you post that to an Expense account for Benevolence Fund Expenditures or words to that effect. NOT to the Fund/Equity account that tracks that balance in that fund. (But the expense account is linked to the fund account.) That is consistent with what I am saying.

      • You also are correct, of course. The income and expense assignments to funds are (or can be) regular GL accounts, but the actual fund(s) are not – except in ACCOUNTS!

Comments are closed.