3.8 Working with multiple funds and accounts

There are situations when the accounts you’re tracking are different between your clients and the financial institutions where money is kept. An example of this is working as the treasurer for a religious institution. From the secular point of view, you might be working with three different accounts:

• Checking
• Savings
• Credit Card

From a religious point of view, the community expects to divide its resources into multiple “funds”, from which it makes purchases or reserves resources for later:

• School fund
• Building fund
• Community fund

The problem with this kind of setup is that, when you spend money, it comes from two or more places at once: the account and the fund. And yet, the correlation of amounts between funds and accounts is rarely one-to-one. What if the school fund has ‘ $500.00 ’, but ‘ $400.00 ’ of that comes from Checking, and ‘ $100.00 ’ from Savings?

Traditional finance packages require that the money reside in only one place. But there are really two “views” of the data: from the account point of view and from the fund point of view—yet both sets should reflect the same overall expenses and cash flow. It’s simply where the money resides that differs.

This situation can be handled in one of two ways. The first is using virtual postings to represent the fact that money is moving to and from two kind of accounts at the same time:

2004/03/20 Contributions Assets:Checking $500.00 Income:Donations 2004/03/25 Distribution of donations [Funds:School] $300.00 [Funds:Building] $200.00 [Assets:Checking] $-500.00

The use of square brackets in the second transaction ensures that the virtual postings balance to zero. Now money can be spent directly from a fund at the same time as money is drawn from a physical account:

2004/03/25 Payment for books (paid from Checking) Expenses:Books $100.00 Assets:Checking $-100.00 (Funds:School) $-100.00

The use of round brackets creates a virtual posting without ensuring a balance to zero. When reports are generated, by default they’ll appear in terms of the funds. In this case, you will likely want to mask out your ‘ Assets ’ account, because otherwise the balance won’t make much sense:

$ ledger --no-total bal not ^Assets

 $100.00 Expenses:Books $400.00 Funds $200.00 Building $200.00 School $-500.00 Income:Donations

If the --real option is used, the report will be in terms of the real accounts:

$ ledger --real --no-total bal

 $400.00 Assets:Checking $100.00 Expenses:Books $-500.00 Income:Donations

If more asset accounts are needed as the source of a posting, just list them as you would normally, for example:

2004/03/25 Payment for books (paid from Checking) Expenses:Books $100.00 Assets:Checking $-50.00 Liabilities:Credit Card $-50.00 (Funds:School) $-100.00

The second way of tracking funds is to use transaction codes. In this respect the codes become like virtual accounts that embrace the entire set of postings. Basically, we are associating a transaction with a fund by setting its code. Here are two transactions that deposit money into, and spend money from, the ‘ Funds:School ’ fund:

2004/03/25 (Funds:School) Donations Assets:Checking $100.00 Income:Donations 2004/03/25 (Funds:Building) Donations Assets:Checking $20.00 Income:Donations 2004/04/25 (Funds:School) Payment for books Expenses:Books $50.00 Assets:Checking

Note how the accounts now relate only to the real accounts, and any balance or register reports will reflect this. That the transactions relate to a particular fund is kept only in the code.

How does this become a fund report? By using the --payee=code option, you can generate a register report where the payee for each posting shows the code. Alone, this is not terribly interesting; but when combined with the --by-payee (-P) option, you will now see account subtotals for any postings related to a specific fund. So, to see the current monetary balances of all funds, the command would be:

$ ledger --payee=code -P reg ^Assets

04-Mar-25 Funds:Building Assets:Checking $20.00 $20.00
04-Mar-25 Funds:School Assets:Checking $50.00 $70.00

Or to see a particular fund’s expenses, the ‘ School ’ fund in this case:

$ ledger --payee=code -P reg ^Expenses and code School

04-Apr-25 Funds:School Expenses:Books $50.00 $50.00

Both approaches yield different kinds of flexibility, depending on how you prefer to think of your funds: as virtual accounts, or as tags associated with particular transactions. Your own tastes will decide which is best for your situation.