"Virtual" Bank Accounts?

SOLVED

Hi everyone. I think we have a pretty unique situation.

Our club's chequing account has been previously split into 3 "virtual" accounts: General Account (this would be the balance remaining from the other two), Darts Fund, and Capital Replacement Fund. These are all supposed to be assets.

Members will want the treasurer (who I'm helping set this up) to show the balance of these 3 "accounts" on the monthly reports.

The previous treasurer used excel and calculated the balances that way. 

In Sage, though, I can't seem to figure out how to accurately show these 3 accounts without messing up reconciliation of the chequing account.

One suggestion so far was to add those accounts as customers and give them a credit, and make GL accounts in expenses. This would list them as expenses, though. Eventually, expenses will come out of these funds.

Another suggestion was to have them listed as bank accounts and take those amounts off the chequing account. We would have to alter the month-end balance on the bank statement for reconciliation, though. Plus, we would have to reconcile the other two accounts and essentially make up a statement for them. I really don't like this idea as it requires a lot more work than necessary.

In talking with the previous treasurer, she said normally you'd have separate bank accounts for them, but never bothered with it because the fees might outweigh any interest made.

It's been agreed to start one other savings account so that we can have the Cap. Replacement Fund separate. That doesn't solve the issue with the Dart Fund, and how to represent these accounts earlier in the fiscal year.

So that's our conundrum. If anyone has any suggestions, I am all ears.

Thank you

Parents
  • +1
    verified answer

    If these are to be considered bank accounts then they should be actual, not virtual, bank accounts. It is the easiest way to reconcile the accounts, three bank accounts and three Sage accounts.

    However, when I am using Sage 50 for charities where they have different funds I have used two different methods. If there is a lot of activity (revenues and expenses) I would suggest using projects which can track the activity and at the year end the profit or loss can be allocated to an Equity Account for the fund from the General Account. This would provide an Equity Account balance for each of the three Funds.

    A different way to handle these funds if there are very limited number of entries would be to use Liability Accounts. I set up a series of sub-accounts for revenue and expenses and then provide a Sub-total for the Fund Balances. This provides the fund balances every time a Balance sheet or income statement is prepared with no other entries being required. The General Fund is maintained on the income statement.

    In either scenario a single bank account is all that is required. An understanding of the financial reports will assist the Board/Executive to manage the three funds. The important information is only partially the bank account balances and more important is the amount of the Fund itself as a  Liability.

    Hope this helps

  • 0 in reply to Alwyn

    So I had a chance to try this out. Entering them as Liability accounts worked perfectly! It gave a much more accurate financial picture.

    Thank you again!

  • 0 in reply to Jenn J

    Hi Jenn J, happy to see that the community helped you figure out a solution!Tada

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