How to Set up Restricted Funds in QuickBooks Online

Restricted funds refer to a reserve account that restricts funds from being used for particular motives. This assures donors that their donations are used in the missions they have selected. The Non-profit organization uses this money for a specific objective. For instance, insurance organizations, temples, churches, the education sector, and endowments are given some amount of money that they can spend for a purpose. Learn how to set up restricted funds in QuickBooks Online.

How to set up Restricted funds in QuickBooks Online

To set up Restricted Funds in QuickBooks Online, enable Class Tracking under Settings > Account and Settings > Advanced. Then, create classes for each fund and track transactions accordingly for accurate financial reporting.

Switch on Class tracking

• Navigate the Gear icon located on the top of the menu bar.
• After that, select the Accounts and Settings option.
• Go to Advanced, then in the Categories section, click the pencil icon.
• Check Track classes, then click Save.

Set up through classes

• For every donation, set up a class
• There are mainly two funds, i.e., restricted and; unrestricted funds.
• In the general funds budget, there are unrestricted funds & whereas the restricted funds are stored in another class.
• For this, navigate the list option located on the upper menu bar
• After clicking on it, scroll down to the options & click on Class List
• Embed the new classes to that class list
• After this, open a new screen by simultaneously holding the CTRL & N keys
• Give a name, i.e., unrestricted fund, to the first-class & hit on Ok
• Create a parent class named restricted funds & further make a sub-class if you have multiple sources from where you are getting contributions
• Select a Sub-class under the Restricted fund and label it.

Set up Through Bank Account

To open an isolated bank account for every restricted fund, set up a new bank account for each project in QuickBooks.

• Go to the list option appearing in the menu bar
• Scroll down entire options and hit on Chart of Accounts
• Open a window named Add New Account by pressing N & CTRL button of the keyboard
• Select Bank option and hit Ok
• Give a name related to the objective
• In bank account deposit the restricted funds
• Select the Make Deposit tab to open the deposit screen
• Fill in the details of a donor, including name, amount, and income account associated with donor deposited account
• Save the changes and hit on Ok
• Now, the deposit is stored.

Through Sub-bank Account

• Set up a sub-bank account for every donation
• Navigate Chart of accounts again to create a sub-bank account
• Select the Bank option and open the new account window
• Give a name to the Bank account, i.e., Restricted Find
• After that, select the sub-account and hit on the parent account and allot that sub-account to the currently used account
• Now, you can deposit the donations in that subaccount.

Read More: Set up Direct Deposit in QuickBooks

How to track your restricted funds in QuickBooks Online

There is no direct technique available to track restricted funds in QuickBooks. However, this can be achieved through classes and allotting entire restriction funds to a preferred class. Assets of a particular motive in any organization are monitored via classes. These restricted funds need unique accounting procedures.

• Go to Settings, then select Account and Settings.
• Navigate to the Advanced tab.
• In the Categories section, click Edit.
• Enable Track classes
• Click Save, then Done.

Conclusion

Hopefully, now you have learned about how to set up restricted funds in QBO through the aforementioned steps written in the blog. In case you face any trouble while processing restricted funds or any other QuickBooks errors then call QuickBooks’s technical toll-free number +1800-816-6849. The team carries the years of experience to tackle each issue in less time. There is also an online chat service that is available 24*7 to provide you with an instant resolution.