Carry forward from prior years

There are times when an activity that was budgeted this year did not use all of its allocated budget. Sometimes your group will consider that unused money as something that is to be carried over and used next year.

For example, you may have budgeted $1,000 for a special art project and only $600 was spent and you want the $400 to be available for next year. You may also decide to budget another $1,000 for the art project next year. If you spend that $400 in the new year and put it against the new art project budget, it will look like you only have $600 left, and that is not at all what you intend.

The key here is to recognize the unused $400 as part of your budget for the new year. A good way to do this (and make it obvious to the membership what happened) is to set up a Heading called something like Expenses from Prior Year. Then set up a Category called “Art Projects from Last Year”. This would have a Budgeted Expense of $400.

Make sure that you put the $400 in the Budgeted Expenses column. It means that you have that money available to spend.

Now when you have $400 worth of expenses for the Art Project you can allocate them to that “Art Projects from Last Year” category. Anything more would go against this year’s budget.

Sometimes people ask why MoneyMinder doesn’t just carry over those amounts. Two reasons: 

  1. First of all, MoneyMinder is not a mind reader. It doesn’t have any way of knowing that you want the $400 for the art project carried over, but not the $25.46 that you didn’t spend on Hospitality or the $210 you didn’t spend on office supplies.
  2. Second, unless your group has specifically voted to Restrict Funds for a particular project, the $400 really needs to be approved again as part of the budget for the new year. And that is up to you to decide.
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5 responses to “Carry forward from prior years”

  1. Just getting started. How do I get the total bank balance at beginning of financial year to be something other than 0?

    • Hi David,

      To make changes to your starting bank balnces, you’ll just click on the Banking icon in the toolbar. Then click the Edit button to the right of the account you want to make changes to.

      Cyndi

  2. How can I carry over funds held in trust for a project and still maintain a balanced budget? When using the above example, it increases my overall expenses, but there is no actual new year income intended to balance it.

    • Hello Mrs. C., Yes, you would have a budget category line for restricted carry over funds and by putting those dollars in budgeted expense you are saying those are funds that you have in the bank to spend. These funds are a carryover and are reflected in the Funds Available at beginning of financial year when you carry your banking over. If these are restricted funds that are for only one purpose, you might like the option of showing those funds separately (even though they are part of your bank account). I will give you a knowledge base link to show you how this is easily done. Please let us know if you have any further questions, we are happy to help! Warm regards, Julie

      https://moneyminder.com/knowledgebase/handling-restricted-funds/

  3. I face the same challenge as Mrs. C and expect to carry these restricted/trust funds forward for many years spending only a portion in any particular year. While the total “carryover/trust” funds are present in the beginning balance for the year and will appear at the top of the budget report, there is no accounting for how these funds are allocated between projects. Julie’s suggest to add a budget line for each of these projects is great, but entering the full carryover amount as the expense amount distorts budgeted expenses for the year unless you expect to spend the full amount in the year, which I do not.

    To account for the availability of carryover/trust funds in the new year’s budget I add a line(s) to the budget with the name “Restricted Funds – Project A (YYYY Starting Balance $$$$)” and enter an expense value corresponding ONLY to the amount we expect to spend in the budget year. In this way, I show my audience both the total amount of funds available for the project and the portion we expect to spend this year.

    At year end, the Treasurer’s Report shows me the actual amount spend for each these projects and I can see the corresponding starting balance (annotated in the name for each project), permitting me to determine the carry over amounts for next year’s budget.

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