Support Center Question of the Week: Additional Bank Accounts
We understand that our Nonprofit Accounting Support Center is a new and different product. That’s why each week we’ll highlight a question from a nonprofit organization to give you an idea how the service works and what people are asking. If you’re wondering how this service can benefit your nonprofit organization, read below.
This Week's Support Center Question
Our organization is gearing up for a conference that we will be hosting in 2015. We have heard that we should set up a new checking account specifically for the conference to track revenues and expenses
Is setting up a separate checking account for the conference necessary?
The Week's Answer from Associate Marci Cozby
It used to be that having separate bank accounts was the way to manage revenue and expenses for various projects. Now, with the use of bookkeeping and accounting software that is no longer necessary. The two most common reasons that organizations want to create a separate checking account are:
- There is a specific grant requirement
- For the purposes of keeping track of revenues and expenses related to a specific program or fundraising event
If the reason for wanting to set up a separate checking account is solely for reason #2, we usually recommend that that you do not. Mainly because doing so not only gives you another account to track, but it can also result in additional fees. Utilizing your bookkeeping and accounting program to track revenues and expenses for a specific program or event will keep your accounting processes streamlined and easier to maintain.
For example, if you use QuickBooks, you can create classes. Classes are created accordingly with your programs and the events that you hold. When you create a transaction, whether revenue or expense, you will add the specific class to that transaction. You can then run a Statement of Activities by class (Profit and Loss by class) to see the income and expense for each of your programs.
Marci Cozby, Support Center Associate for Jitasa
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