[GNC] How to record 'balancing' trnsactions?

[Vincent Dawans]

Leaving aside the why you need 2 sets of books, I'll just focus on the how.

First you need to decide if the money in and money out really needs to be
classified as income and expenses in your first set if books (the main bank
account) or can more simply be treated fully as pass-through. If fully
pass-through, then the following...

*For example we might have 'income' into the current account as*
*follows:-*
*    Scarfe Trust for roof       750.00*
*    Talk and Tea collection     205.00*
*    Tea concert                 410.00*
*    Carol singing                35.00*

Is not recorded as income in your main book but instead as a liability
towards the building fund. So you create a building fund account under
liability and when your receive money for the building fund you debit your
bank account and credit that liability account. Then when you are ready to
write a check for the building fund, you look at the balance in that little
account and write the check for that amount. When the check is cashed it
will come as a credit on your bank account and a debit on the liability
account. That liability account becomes a sort of running ledger you can
provide showing money collected then transferred to the building fund over
time.

On the building fund side, you can either book the money coming in as
income directly on the date received from the main account, or if you want
the detail of all the original transactions, then create a receivable
account under assets with the same detailed transactions from the other
side booked against income, then that gets zeroed when the check is
deposited.

The opposite movements then are made for payments from the building fund to
the main accounts of needed.

Sincerely,

Vincent Dawans


On Wed, Jul 12, 2023, 14:14 Chris Green <cl at isbd.net> wrote:

> On Wed, Jul 12, 2023 at 04:56:23PM -0400, Michael or Penny Novack wrote:
> > On 7/12/2023 8:12 AM, Chris Green wrote:
> > > This is as much an accounting question as a GnuCash one but how one
> > > does this depends on the sofware's capabilities so it makes sense
> > > to ask here.
> > >
> > > Our church has two main accounts (as in places where money is kept), a
> > > current account at a bank, and a 'building fund' kept in a building
> > > society savings account.
> > >
> > > I run two separate instances of GnuCash, one for the current account
> > > and one for the building fund.  Both of these are run on a 'cash
> > > accounting' basis so the balances in GnuCash exactly match the
> > > statements from the bank and building society.
> >
> > Let's assume that there is a good reason to have separate books << I can
> > think of a number* -- keep in mind that I was treasurer of several
> > organizations >> In other words, there might be no good reason for this
> > church but might for another.
> >
> > a) Yes, there can be errors going between the books. So you want to
> > minimize the number of between the books transactions. See if there
> > could be a transfer only of "net" every so often
> >
> > b) You will need to use some thought for the accounts you will want to
> > contain parts of transactions that pertain to the other entity.
> >
> >
> > Michael D Novack
> >
> >
> >
> > * For example, a quasi independent org/fund is legally under a parent
> > 501(3)3. The treasurer of the org/fund has to report certain things to
> > the treasurer of the 501(c)3 and there may actually also be money
> > transferred between them (they may be collecting money on each other's
> > behalf and making payments on each other's behalf. But do you not see
> > that no matter how many such transactions in a month need only one money
> > transfer between them and one report per month (assuming getting things
> > right between these entities once a month)
> >
> Thank you, you have described the issue exactly! :-)
>
> It's your b) that prompted me to ask the question, do you (or anyone)
> have any good insights into how to handle this?  Whether or not this
> is done with only one GnuCash instance or with two the difficulty is
> still there as I see it.
>
> --
> Chris Green
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