Grant and fund accounting

We set up class, location or fund tracking on top of your existing chart of accounts so restricted and unrestricted funds are separated at the point of entry, not sorted out later. Every grant or restricted gift gets its own budget line-up matching the approved grant agreement, and spending is coded against those specific lines as transactions post.

Each period, we produce a report of spending against the approved budget for every active grant or fund, formatted however the specific funder requires rather than one generic template stretched to fit every report. When restricted funds are spent on their intended purpose, we record the release of restriction so the net asset classification on your financial statements stays accurate month to month, not just at year end.

Onboarding starts with reading each active grant agreement or fund restriction and translating it into a budget structure inside your accounting system: approved line items, the reporting period, and any spending restrictions or matching requirements the funder set. That structure becomes the class or location tracking layer applied to every transaction as it is coded during the regular bookkeeping cycle.

At close, spending is compared against the approved budget for each fund and any variance, over budget on a line, unspent with a deadline approaching, gets flagged immediately rather than waiting for a scheduled report. Funder-specific reports are then generated from the same underlying ledger data, so numbers tie back to your books instead of being built separately in a spreadsheet that can drift from what actually happened.

This is mostly nonprofit organizations managing federal, state or foundation grants alongside general operating revenue, but any organization managing a restricted fund, a donor-restricted gift, or a program-specific pool of money next to unrestricted operations needs the same separation, regardless of entity type. A social enterprise with a restricted program grant, or a for-profit running a grant-funded pilot alongside its core business, faces the identical accounting problem.

It fits organizations managing more than one active grant at a time especially well, since that is where a spreadsheet-based tracking system usually breaks down: each funder wants a different report format, and reconciling several parallel trackers back to one general ledger becomes its own part-time job.

The most common issue is restricted and unrestricted money sitting in one undifferentiated bank account with no ledger-level separation, so nobody can say with confidence how much restricted cash is actually available without pulling every grant agreement and reconstructing spending by hand. The second is grant spending tracked in a spreadsheet maintained outside the accounting system, which drifts from the real ledger the moment someone forgets to update it after a transaction posts.

We also regularly find net assets misclassified, temporarily restricted funds shown as unrestricted, or a restriction released on the books before the money was actually spent on its intended purpose. Indirect cost allocation across multiple grants is another frequent gap: administrative and overhead costs need to be allocated to grants on a documented, consistent basis, not absorbed entirely into unrestricted operating expense or charged arbitrarily to whichever grant has budget room left.

Fund accounting runs inside QuickBooks Online, Xero or Sage Intacct, using class, location or project tracking to separate funds without requiring a dedicated fund-accounting platform most smaller organizations cannot justify the cost of. Sage Intacct carries the strongest native multi-dimensional reporting for organizations managing many grants at once, since it can report the same transaction against fund, grant, program and location dimensions simultaneously.

For organizations already running a donor-management or grant-tracking system separately from their accounting software, we reconcile the two so the numbers a development team reports to a board match the numbers on the general ledger, rather than two systems quietly telling different stories.

Grant and fund accounting is scoped by the number of active grants or restricted funds and how many distinct funder report formats need to be produced each period. A single grant on top of standard monthly bookkeeping typically fits inside the Growth tier on the published rate card at /us/pricing; organizations managing several concurrent federal or foundation grants with detailed reporting requirements usually move to a Scale-tier custom quote, confirmed after a scoping call that reviews the actual grant agreements.

Catch-up work to reconstruct fund accounting for grants already active when the engagement starts, or to correct a net asset classification error found on review, is scoped and quoted separately from the ongoing monthly fee.

Different funders require different reports on different schedules, a federal agency's line-item budget report, a foundation's narrative-plus-financials format, a board's summary by program, and we build the class or fund structure to produce all of them from one underlying ledger rather than three parallel systems. This also keeps a Form 990's program-service reporting consistent with what individual funders were told, since both are built from the same source data.

Organizations that expend federal awards above the federal single audit threshold need their books structured to withstand that level of scrutiny well before the audit itself starts: budget-to-actual by grant, documented indirect cost allocation, and a clean audit trail from source document to financial statement. We build to that standard from the start rather than reconstructing it under deadline once a single audit is triggered. The audit itself, and any related opinion, is performed by an independent accounting firm. We prepare the books and the schedules that firm will test.