Running Indirect Cost Calculations

Indirect costs (also called F&A or overhead) are the shared costs of running your organization that support grant-funded programs. GrantLink helps calculate indirect costs and can post journal entries to QuickBooks only when indirect cost writeback is enabled.

What Are Indirect Costs?

Indirect costs are expenses that benefit multiple programs and can't be directly charged to a single grant:

• Rent and utilities
• Administrative salaries
• Accounting and legal fees
• Office supplies
• IT infrastructure

Funders often allow you to recover these costs at an approved rate.

Setting Up Indirect Costs for a Grant

When creating or editing a grant:

1. Go to the grant Details tab
2. Configure indirect cost settings:

Field	Description	Example
IDC Rate	Percentage to apply	15%
IDC Base	What costs the rate applies to	MTDC, TDC, Salaries
IDC Cap	Maximum indirect recovery	$50,000 or unlimited

Common IDC Bases

Base Type	What's Included
MTDC (Modified Total Direct Costs)	Allocated direct costs except equipment, subawards over the threshold, and categories marked Excluded
TDC (Total Direct Costs)	Allocated direct costs except categories marked Excluded
Salaries & Wages	Personnel costs only
Custom	Currently includes allocated costs except categories marked Excluded; no separate custom formula is applied

Running an IDC Calculation

Step 1: Navigate to Indirect Costs

1. Open the grant and go to the Indirect Costs tab
2. Click Calculate

Step 2: Select the Period

Choose the date range for the calculation:

• Monthly (recommended)
• Quarterly
• Custom range

Step 3: Review the Calculation

GrantLink shows a detailed breakdown:

Category	Amount	In Base?
Salaries	$50,000	✓ Yes
Fringe	$15,000	✓ Yes
Travel	$5,000	✓ Yes
Equipment	$10,000	✗ No (MTDC excludes)
Subaward (first $50K)	$50,000	✓ Yes
Subaward (over $50K)	$15,000	✗ No (threshold)
Base Total	$95,000
× Rate (15%)	$14,250

Step 4: Approve and Post

1. Review the draft calculation.
2. Click Approve to approve the calculation; approval alone does not change QBO.
3. Explicitly click Post to QuickBooks when posting is intended.
4. GrantLink validates the organization mode, indirect-cost posting permission, and account mappings. Posting can fail, so review the result and any returned QBO reference.

For a nonzero run with supported grant coding, a successful QBO post creates a journal entry. A zero-dollar run or a Project without the required parent Customer can be marked posted without creating a QBO journal entry.

Account	Debit	Credit	Grant coding
Indirect Expense	$14,250		Configured Class, Customer, Department, or Project parent Customer
Indirect Cost Recovery		$14,250	Configured Class, Customer, Department, or Project parent Customer

Understanding the IDC Journal Entry

The IDC journal entry does two things:

1. Attributes overhead to the grant — Shows the grant "cost" including indirect
2. Records recovery revenue — Credits your indirect cost recovery account

Important: This JE allocates overhead to the grant. It does not automatically create the "Net Assets Released from Restrictions" entry—that's a separate GAAP requirement handled by your accountant.

Account Mapping

Work with your accountant to map accounts:

GrantLink Concept	Typical Account Type
Indirect Expense	Expense account (program overhead)
Indirect Cost Recovery	Revenue (cost-reimbursable) OR Contra-expense (internal)

Subaward Threshold Tracking

For MTDC calculations, GrantLink automatically tracks subaward thresholds:

• Threshold selection: GrantLink currently uses the grant's stored Awarded status timestamp: before October 1, 2024 uses $25,000, while later or missing timestamps use $50,000. Confirm that this timestamp supports the threshold required by the award
• Amounts over threshold: Excluded from base calculation
• Vendor accumulation: For categories marked Subaward, usage accumulates by QBO vendor across the grant's history. Verify vendor coding because uncoded rows share one bucket

IDC History and Audit Trail

View all IDC calculations for a grant:

1. Open the grant and go to the Indirect Costs tab
2. See the history of all runs
3. Click any run to see the full calculation breakdown

Each run records:

• Date calculated
• Period covered
• Base amount
• Rate applied
• Indirect amount
• QBO JE reference when an actual journal entry was created; no-JE runs may still be marked posted

Best Practices

1. Calculate monthly — Run IDC at month-end for accurate financials
2. Review before posting — Verify the calculation looks correct
3. Coordinate with claims — Ensure IDC is included when submitting reimbursement requests
4. Avoid double-counting — If claiming IDC on invoices, don't also post IDC JEs that credit revenue

Troubleshooting

IDC Amount Seems Wrong

• Verify the IDC base type is correct
• Check that expenses are allocated to the grant
• Review subaward threshold calculations

Cap Reached

• GrantLink automatically limits IDC to the cap
• Review if budget modification is needed

How GrantLink supports this today

QuickBooks writeback is controlled separately from sync. Start in Read-only reporting mode unless your team intentionally enables selected writes such as transaction tag updates, journal entries, custom-field updates, or claim invoices.