What a Fund Is
Use this when you see a Fund choice in accounting and want to know what it does. A fund is the pot of money a piece of activity belongs to. Tagging activity by fund keeps operating, reserve and trust...
Last updated
Use this when you see a Fund choice in accounting and want to know what it does. A fund is the pot of money a piece of activity belongs to. Tagging activity by fund keeps operating, reserve and trust money separate on your reports without needing a separate GL account for each one.
The four funds
| Fund | What it is |
|---|---|
| Operating | Day-to-day running of the property. The right choice for most activity, and the default everywhere. |
| Reserve | Money set aside for major repairs and replacements, such as a roof or a boiler. |
| Rent trust | Rent you are holding on behalf of an owner. |
| Deposit trust | A deposit you are holding on behalf of a resident, such as a security deposit. |
On reports, the two trust funds are shown together as a single Trust category. Operating and Reserve are always reported separately.
The one thing that makes funds click
A fund is a tag on each posted line, not a property of a GL account.
The same GL account can hold Operating lines and Reserve lines side by side. Nothing about the account itself decides the fund. This is why:
- You never need a second copy of an account just to track a second fund. There is one Accounts Payable, one Repairs and Maintenance, and so on, whatever the fund.
- There is no Fund field when you create a GL account. There is nothing to set there.
- Some standard accounts read like Cash - Operating. That is only the account's name. The split you see on your reports comes from the line tag, not from the name.
Where you choose a fund
- On an expense, as you record it. See Choosing a fund on an expense.
- On each line of a journal entry, and on an invoice payment. See Choosing a fund on a journal entry or a payment.
What the choice actually changes
Operating, Rent trust and Deposit trust all behave the same way in your budget and on your reports. They are reported separately, and that is the whole effect.
Reserve is the one fund that changes behaviour. Reserve activity is kept out of your budget figures, and paying a reserve expense moves the cost off your operating results and charges it against your reserve instead. See How a reserve expense posts and Reserve in budgets and reports.
Related: Setting up reserve spending · FAQ