Transfers

"Transfer" means two completely different things in a nonprofit's books, and mixing them up is the most common way fund accounting goes wrong.

• Moving cash between your own bank accounts — checking to savings. The money is in a different place. Who it belongs to hasn't changed.
• Moving money between funds — general money to a building fund. The cash may not move at all. What changed is who it's earmarked for.

A third thing looks like a transfer and isn't: moving money into or out of a donor-restricted fund. That's a release of restriction, and it has its own action. More on that below.

Work out which one you're doing first. The rest is easy.

Moving money between two bank accounts

Neither income nor expense — you didn't earn or spend anything, so no fund balance should change.

If the transfer came in through a bank feed or import, both sides usually show up on their own:

1. Go to Transactions and find the To categorize queue.
2. Where NP Ledger can see both halves, it offers them as a matched pair under "Ready to record — money moved between your own accounts."
3. Tick the pairs and click Record selected internal transfers. One balanced entry per pair, and both bank lines are cleared.

If a pair isn't offered, the queue tells you why in plain words. Code that line individually and pick Transfer (between accounts) on the booking form.

One thing to watch. A transfer shows up twice — money leaving one account and arriving in the other. Recording each half separately as income and expense double-counts your activity and overstates both. Always record the pair as a transfer.

Moving money between two funds

Use this when your board designates general money for a purpose — say, setting aside $10,000 of unrestricted money for a new roof. (A fund is a separate bucket of money within your organization, tracked on its own.)

1. Go to Funds and choose Interfund transfer.
2. Pick Transfer from and Transfer to.
3. Enter the Amount and Date. Add a Description if it helps you remember why — a board minute reference is ideal.
4. Save.

NP Ledger builds the balanced entry for you, including the Due To / Due From Other Funds lines that keep each fund's books balanced on its own. You don't have to work those out.

You need Admin permission for this one, since it changes what money is earmarked for.

Moving money in or out of a restricted fund — this is not a transfer

If a donor gave money for a specific purpose, you can't move it somewhere else by deciding to. The money becomes generally available when you've done the thing the donor asked for — that's a release of restriction, and it belongs on the record as one.

So donor-restricted funds don't appear in the Interfund transfer picker at all. Open the fund and use its release restriction action instead. Same money, different meaning, and your Statement of Activities reports the two differently.

If you can't find a fund in the transfer list, that's almost always why.

• After a bank transfer, both accounts changed and your total cash didn't.
• No fund balance moved because of a bank-to-bank transfer.
• After an interfund transfer, both funds changed and the total across all funds didn't.
• A restricted fund's balance only ever went down because the purpose was met — not because money was needed elsewhere.

Recording each half of a bank transfer separately. Your income and expenses both go up by the transfer amount, and neither one happened. If your revenue looks too good this month, look here first.

Using an interfund transfer to spend restricted money on something else. The picker won't let you, and that's the point. If you genuinely spent restricted money on its intended purpose, release the restriction. If it was spent on something else, that's a conversation to have with the donor, not an entry to make.

Transferring instead of correcting. If money landed in the wrong fund because it was coded wrong, fix the original entry. A transfer leaves the mistake on the record and adds a second entry on top of it.

Forgetting the reason. Six months on, a $10,000 move with no description is a question nobody can answer. One line about the board decision costs nothing now and saves an afternoon later.

• Funds and Programs — what funds are and how to set them up
• Categorize Transactions — where bank transfer pairs show up
• Restrictions and Releases — what a release of restriction means
• Fund Transactions Report — check a fund's activity after a transfer