Using Account Groups for Fund Accounting


If you are a tax exempt organization per Section 501 of the IRS Code, you are a nonprofit fund accounting operation. Federal, state, and local government organizations are also fund accounting operations.

If you are operating on a fund accounting basis, you must set up separate funds based on regulations, restrictions, and limitations as they apply to your organization. They must be treated as separate entities. Each fund must have its own general ledger and must provide individual revenue, expense, income, and balance sheet reports. They must also be reported in-total for the entire organization.

Some Resources for Information on Fund Accounting:

Leon Hay; Accounting for Government and Non Profit Entities; Homewood, NJ; Irwin, 1989.
Joseph R. Razek, Gordon A. Hosch; Introduction to Governmental and Not-for-Profit Accounting; Englewood Cliffs, NJ; Prentice Hall, 1990. (3199)






Big Business can address many of the needs of fund accounting organizations but may require some manual manipulation of reports. To satisfy the requirement that each fund have its own general ledger report, you can run a Trial Balance Detail report for each fund's group of accounts. These trial balance reports can be exported and converted for use as each fund's Balance Sheet. The in-total Balance Sheet can be run as the standard Balance Sheet within Big Business.

Setting up your accounts for various funds involves assigning "Account Groups" to each account. For example, if you had an Education Fund that consisted of Tuition, Donations, and Supply Expenses, you would want to assign each of these accounts to the same Account Group, perhaps entitled "Education Fund." When running a Trial Balance Detail, you can then specify an Account Group, "Education Fund," and report only the accounts within that fund.

Consult your tax advisor or accountant regarding specific details of fund accounting bookkeeping. There are accounting systems specifically designed for fund accounting. However, these systems may lack many of the advanced features found in Big Business. We feel that most smaller fund accounting based users will find Big Business to be a powerful tool in managing their organization.




Related:

  Chapter 411 Information

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