[GNC] Fund management without an actual account

Chris Skudder CSkudder at earthlink.net
Mon Aug 5 17:03:01 EDT 2024


Hi Daniel,
As Treasurer of our church, I do something very similar.
This is how it works:
  - A parent asset acct 1120 is called "Checking acct after reserves"
  - a child acct 1121 is called "Checking acct"
  - another child acct 1122 called "Reserve for property tax"
  - another child acct 1123 called "Reserve for elevator maintenance"
In the church's case, the reserves are for:
         - property tax on the parsonage, which is due every 6 months
         - big elevator maintenance work required every 5 years
The acct codes (1120, 1121, etc) help a LOT to keep this clear in the 
chart of accts. I'd suggest using acct codes for all accts. See for example:
double-entry-bookkeeping.com/coa/chart-of-accounts-numbering-system/
     ... or search on "typical chart of accounts numbering system"

Then I take the property tax amount divided by 6 months, and
the estimated elevator maintenance bill divided by 60 months ie 5 years -
... and set up monthly Scheduled Transactions, which:
     - CREDIT the "Reserve for something" acct
     - DEBIT the appropriate expense acct
           ... for the amount needed monthly, to have money available to 
pay these bills when they come up.

So the "Reserve for something" accounts -which are asset accts- usually 
have a negative (credit) balance. This is the amount which has been "set 
aside" towards the known upcoming expense.
The expense actually shows up monthly, instead of a big lump at 6 months 
for property tax, or at 5 years for the elevator maintenance.

When the "big lump" bill comes due and I pay it, the transaction is:
     - CREDIT the checking acct, from which I write the check to pay it,
     - DEBIT "Reserve for something" ... which brings the "Reserve" acct 
balance back to zero (or pretty close).
Note that this debit does NOT go into the expense acct - because the 
expense has already been booked monthly.

So looking at these acct balances in a typical month, it might look like 
this:
1120 "Checking acct after reserves"  =  $6,000  (PARENT)
  - 1121 child acct  "Checking acct"     =  $7,250
  - 1122 child acct "Reserve for elevator" =  -$1000 (Negative balance)
  - 1123 child acct "Resv for property tax" =   -$250(Negative balance)

What this means:
  - 1120 the PARENT "Checking after reserves" is that portion of the 
checking acct available for everything else ... AFTER what's been set 
aside for the next 5-year elevator maintenance and the next 6-month 
property tax payment.
-- 1121 child "Ckg acct" is the ACTUAL amount in the checking acct.
         ... This is the acct into which I book all deposits and checks 
written; and which I reconcile with the bank's statement each month.
      -- 1122+1123 "Reserve for XXX" acct's are the amounts "saved up 
for" the upcoming big-lump payments, which show up as a negative number.

I coded 1120 "Checking after reserves" as a "placeholder" acct, so it 
does NOT show up as a choice when I'm entering transactions. I will not 
ever normally enter a transaction directly into this acct.
Everything goes into the actual checking acct 1121, or the reserve 
acct's 1122 + 1123.

Hope that helps and God bless!
Chris

------------------------------------------------------------------------

On 8/5/24 12:00, gnucash-user-request at gnucash.org wrote:
> Message: 3 Date: Mon, 5 Aug 2024 13:27:22 +1200 From: Daniel Sheffield 
> <d.j.yotta at gmail.com> To: gnucash-user at gnucash.org Subject: [GNC] Fund 
> management without an actual account Message-ID: 
> <CAGBFyFUc8nZAFzAbyTWcUWc3QmgRNvJEeBp=HSJz-7A6_Y+8ZQ at mail.gmail.com> 
> Content-Type: text/plain; charset="UTF-8" Hi, I'm using gnucash to 
> manage my personal finances. ... BUT I'm trying to keep track of 
> savings towards a goal, but without opening an actual account or 
> making any real world transactions to achieve it. ... Cheers, Daniel S


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