principal reduction fund

[Sandy]

We have set up a principal reduction fund so that members can make a contribution to help pay down our mortgage. This fund is basically a pass thru fund in that we will make a principal only payment at the end of each month with any donations to the fund that come in. This is in addition to our regular budgeted payment each month.

My question is should I treat it as a pass thru or should I set up income, restricted, release and expense accounts for this fund.

[NeilZ]

We have set up a principal reduction fund so that members can make a contribution to help pay down our mortgage. This fund is basically a pass thru fund in that we will make a principal only payment at the end of each month with any donations to the fund that come in. This is in addition to our regular budgeted payment each month.

My question is should I treat it as a pass thru or should I set up income, restricted, release and expense accounts for this fund.

It IS income .. and should be listed as such, but as you noted Temp Restricted Income, it should have its own Fund Balance (3000 series) account so that it would not be included in the normal fund balances accounts. Pass-thru liability accounts do not show up on the Income & Expense reports, and you'll want to show where this 'reduction money' is coming from.

Using the Maintain Donor Restrictions function will lead you through the steps necessary. I would create an unbudgeted expense account as you'll never know how much you'll have collected month to month.