Transferring Balances Between Classes (Funds or Projects)

So to reiterate the issue, you received donations over time for a project or fund (which you treat as a class in QBDT).  The project was completed with some leftover money.  You want to transfer this project (class) balance over to another project (class), but there does not appear to be a simple way to do this in QBDT.  (I agree there should be, but there does not appear to be.)  If you try to do this with a General Journal transaction, when you run the Balance Sheet by Class report, you will have an Unbalanced Classes line at the bottom with nonzero values which messes up the other figures in the report.  Some have said you have to go back and change the class for the multiple deposits but you don’t want to because some were used for the first project expenditures and some portion was leftover.  And besides, it would mess up reports for prior periods.  The problem seems to be QB does not seem to let you change the class of money in a single transaction. (I don’t believe you can do it in a Transfer transaction without creating Unbalanced Classes even though that was suggested.) I believe a good approach is to do two transactions as if they were independent to ”fool” QBDT.

Tranette had the key idea, but I believe her details were unnecessarily complicated.  Her first two transactions cancel one another out and serve no purpose.  Her transactions 3 and 4 are the key steps.

Basically, the logic is:

1. Write a check to move money out of the class (project or fund) that you want to take the funds from.
2. Make a deposit to move the same amount of money into the class (project or fund) that you want the funds to go into.

To do this, Tranette suggested using an expense account for one transaction and an income account for the other.  I don’t like that this would inflate your income and expenses, even though they would be in equal amounts and cancel one another out.  I chose to use a single expense account for both transactions. Try to choose a relevant account.

Tranette also suggested creating a wash asset account.  I felt his was an unnecessary complication and just used our general checking account or both transactions.  When I reconcile this account, I can see the two transactions which net to zero and can mark them both as cleared.

For convenience I created a new vendor “Wash Transfer Between Funds”.  So after creating the Wash Transfer vendor, the steps are:

1. On Banking menu, select Write Checks.
2. At the top of window choose the bank account you decided to use (e.g. my general checking account).
3. As Payee, choose the new Wash Vendor.
4. For Account, choose the expense account you decided to use.
5. Enter the Amount of money you want to change the class for.
6. Enter a Memo like Wash Transfer from Project X to Project Y.
7. Enter the Class as Project X = the class you want the money to come out of.
8. Memorize the transaction if desired as a template for future use.  I called this Wash Trfr Fds Check.
9. Save and Close.
10. On Banking menu, select Make Deposits.
11. At the top of window for Deposit To choose the bank account you decided to use (e.g. my general checking account).
12. For Received From, choose the new Wash Vendor.
13. For From Account, choose the expense account you decided to use.  (Yes, QBDT lets you deposit to an expense account.)
14. Enter a Memo like Wash Transfer from Project X to Project Y.
15. Enter the Class as Project Y = the class you want the money to go into.
16. Enter the Amount of money you want to change the class for.
17. Memorize the transaction if desired as a template for future use.  I called this Wash Trfr Fds Deposit.  (The use of similar names puts them together in the Memorized Transaction List for ease of finding when you want to use them.)
18. Save and Close.

Now, you will find two transactions in your bank register that cancel one another out as far as the asset account goes, but which changed the class of the money.  And you will have two transactions in that expense account which cancel one another account except for changing the class of the money.