Balance Sheet by Class with Quickbooks


I've seen several posts in the NGs concerning Quickbooks' inability to
handle consolidations, separate departmental accounting, etc. because
of its limitations with balance sheets by class. Actually, you can get
balance sheets by class with Quickbooks but you need to set up your
company(ies) correctly from the start and you have to enter a couple of
extra splits (distributions) when entering transactions. I'll say that
I had some success doing this with a group of eleven cash basis trusts
that I imported from another system into one QB company with separate
classes that each have balancing balance sheets. I was able to keep the
balance sheets in balance when entering cash transactions and general
journal transactions but what I'll describe below may not work with
inventory transactions or may be too complicated.
Let's say you have a company with 4 departments that are designated by
classes A - D. You can input your starting balances via general journal
transactions with classes indicated appropriately. When entering
general journal transactions, make sure and always indicate the
applicable class for each leg whether a BS or P&L account. For example,
let's assume you're accruing $100 of utilities for each cost center and
your COA has utility ex in acct 5200 and accrued utilities in acct
2800. You would record the following GJ entry:
ACCNT CLASS AMOUNT
5200 A 100
5200 B 100
5200 C 100
5200 D 100
2800 A -100
2800 B -100
2800 C -100
2800 D -100
The GJ entry maintains BS by class integrity because each leg of the
entry can have the applicable class specified and the user can ensure
that everything is kept in balance. The "consolidated" BS would be
reflected in the nonclassified accounts 2800 and 5200 which would each
have balances of $400. Granted, at least in my version of QB (Pro
2000), you cannot get a balance sheet listing separate columns by class
but you can set up a separate memorized custom report to display each
class's BS.
Let's assume the above accrual is entered via the A/P module. I've not
actually done this but I assume it will work in the same fashion as
cash transactions which you can keep balanced by class. Let's also
assume that the A/P control account is acct 2000. In the A/P module,
you would record the utility bill for $400 and in the splits section,
inicate the related expense charges as follows:
ACCNT CLASS AMOUNT
5200 A 100
5200 B 100
5200 C 100
5200 D 100
2800 A -100
2800 B -100
2800 C -100
2800 D -100
2000 400
As you can see, the last split does not have a class entry because its
purpose is to offset the credit to A/P acct 2000 that is generated
automatically by recording an entry through this module. This is the
result you want since your splits already handled the desired balance
sheet entry (acct 2800) for each class. Checks and deposits would work
in the same fashion. You just need to ensure that a "classless" offset
is recorded in the splits against the control bank account whenever a
payment is charged or a deposit credited to one of the classes. For
example, let's assume cash is maintained centrally in acct 1000. A
check for $50 is cut to pay unaccrued professional fees for class B
which are expensed in acct 7800. Let's also assume that
interco/interclass accts are maintained to track payments across the
classes (departments) as indicated in the table below. The check would
be recorded with the following splits:
ACCNT CLASS AMOUNT
7800 B 50
2300 B -50 Payable to central cash
1300 50 Receivable from Class B
Class B will remain in balance as will the "central" accounts because
the net check amount of $50 will reduce acct 1000 with an offset to
acct 1300.
I agree that the above approach takes some additional steps and
requires additional thinking to ensure that all entries are "grossed
up" in order to maintain class balance sheets that balance. However,
Quickbooks can accomplish the task if the user is so inclined.
Alan
Reply to
walemly

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