Working with Journal Entries

Journal entries are a fundamental accounting tool in QuickBooks Online. This guide explains how they work with GrantLink.

What Are Journal Entries?

A journal entry is a direct debit and credit entry to your general ledger. Unlike bills or expenses, journal entries give you complete control over which accounts are affected.

Common uses include:

• Adjusting entries - End-of-period corrections
• Reclassifications - Moving expenses between accounts
• Accruals - Recording expenses before payment
• Allocations - Distributing shared costs

Journal Entries and Grants

When to Use Journal Entries

1. Correcting QuickBooks Online classifications - Reclassifying an expense in the books when the original accounting or QuickBooks Online grant tag was wrong
2. Recording indirect costs - Applying overhead rates to grants
3. Allocating shared costs - Splitting costs across multiple grants
4. Period-end adjustments - Recording grant adjustments reviewed and approved by your CPA

Do not post a QuickBooks Online journal entry solely to change a GrantLink allocation. If the books are correct but the GrantLink assignment is wrong, correct the allocation in GrantLink. If the source amount, account, or QuickBooks Online tag is wrong, correct QuickBooks Online and sync again.

Creating Grant-Related Journal Entries

In QuickBooks Online:

1. Go to + New > Journal Entry
2. Enter the date and memo
3. For each line:
   • Select the account
   • Enter debit or credit amount
   • Assign a Class only when class tracking is enabled and that row or transaction belongs to the Class under your accounting policy
   • Add a description
4. Verify debits equal credits
5. Save

Example: Reallocating an Expense

Moving $500 from Grant A to Grant B:

Account	Debit	Credit	Class
Office Supplies	$500		Grant B
Office Supplies		$500	Grant A

How GrantLink Handles Journal Entries

GrantLink syncs journal entries like other transactions:

1. Syncs automatically - Journal entries appear in GrantLink after sync
2. Evaluates supported rows - Eligible expense-account JE lines that match a grant's Expenses links can sync and auto-allocate
3. Preserves accounting distinctions - A balancing asset, liability, equity, or revenue line is not automatically grant expense, and both sides do not uniformly count as actuals

Revenue-recognition entries must also be distinguished from reclassifications that release donor restrictions. A restriction release moves amounts between net-asset presentation categories under the organization's accounting policy; it is not new revenue. Have your CPA approve the accounts, timing, and presentation.

Viewing Journal Entries

In GrantLink:

1. Open the grant's Allocations, or the organization's Ledger
2. Filter or inspect the synced journal-entry detail
3. Confirm eligible expense lines, allocation status, and any exceptions line by line

Best Practices

1. Always add memos - Explain why the entry was made
2. Use Classes appropriately - Under the QuickBooks Online company setting, tag supported rows or transactions according to your documented policy rather than applying a grant Class to every balancing line
3. Date appropriately - Use the correct period date
4. Keep documentation - Store support in QuickBooks or the grant's Documents; GrantLink does not create an attachment relationship to an individual JE line

Common Scenarios

Indirect Cost Application

Before recording indirect or shared costs, confirm the award's approved rate, allocation base, and method. An allocation entry may only distribute actual costs already recorded in the ledger; it must not create a second expense or unsupported revenue. Have your CPA approve the accounts and credit treatment, such as an appropriate indirect-cost pool or contra-expense account. Analyze any receivable or revenue recognition separately under the applicable accounting guidance.

Cost Sharing Allocation

Likewise, use a documented, consistently applied, award-compliant allocation method and CPA-approved credit treatment. A conceptual split of a $3,000 expense 40/40/20 across three grants might look like:

Account	Debit	Credit	Class
Program Expense	$1,200		Grant A
Program Expense	$1,200		Grant B
Program Expense	$600		Grant C
Program Expense		$3,000	(original class)

Troubleshooting

Journal Entry Not Appearing

• Check the entry date is within sync range
• Verify the entry was saved (not voided)
• Trigger a manual sync

Incorrect Grant Assignment

• Edit the journal entry in QuickBooks
• Update the Class on the appropriate line
• Wait for sync or trigger manually

How GrantLink supports this today

QuickBooks remains the accounting source of truth. Syncing and ordinary allocation or budget-line coding in GrantLink remain local and do not edit QuickBooks. GrantLink does not rewrite QuickBooks Online automatically, and shared account mappings are restricted-account mappings only. Use professional review for journal entries and accounting-policy decisions.

Sources

• Intuit: Create journal entries in QuickBooks Online — current journal-entry workflow and balancing requirement.
• FASB: ASU 2016-14 — releases from donor restrictions are presentation reclassifications, not new revenue.