Time for action – allocating funds for projects
Non-profit scenario 2 – Keeping funds for projects separately: SOS is planning to add a new wing to the building for community healthcare. You are receiving donations specific to the building project and you want to keep the funds separately, even though you don't want to open a separate bank account for that purpose.
Create a new account Funds for building new wing of the type Bank and with Current Assets as the Parent Account. This will show up as a sibling to Checking Account. Now, when you reconcile the Bank balance, you have to reconcile with the total of Checking Account and Funds for building new wing, as shown in the following screenshot.
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Ideally, you might want to create a separate bank account for such projects. In this case, you were able to achieve the same results without going through the extra cost and effort of opening another bank account.
