report to distribute income across multiyear grant?

In QB, start with an Estimate. Grant = customer, or grantor = customer and Grant = job name.

Then, you invoice from the estimate for each period of income.

Is your grant money restricted?  Most grants have to be accounted for as the money is spent for the purpose or program the grant supports.  If your finance committee is telling you recognize in the year it was received (which may or may not be correct depending on the terms of the grant and I'm not going to address that issue further), record the grant money in the year received to a restricted income account.  Create another income account called funds released from restriction.  Use this account for your budget.  You will need to make a journal entry as the grant funds are used, debiting the original restricted income account and crediting the funds released from restriction account. And yes, the original account will show a negative amount and the released account will how a positive. 

To learn about rebalancing Restricted Vs Unrestricted and even temporarily restricted funds, the best resource is the book by Kathy Ivens: Running QB for not-for-profits. She explains how to rebalance Equity, not Income, when releasing restricted funds to show you met your requirement.

Typically, income that is received is classed when received and not rebalanced between income. The use of the funds relieves the restriction on your Net Assets (equity) and not on the Income.

I agree with qbteachmt with regards to net assets treatment for GAAP, but the question was asked about a work-around for budget purposes in QBs for income recognized in another year.  And typically with grants, I see them recorded as a liability when received and recognized as income as the funds are spent for the purpose of the grant. 

The only way to create a budget is to have income to budget expenses against.  If one is not getting new income, you have to have a contra account to balance income.  The QBs budget would exclude the the contra account only for budget vs. actual reports provided to the Finance Committee.

That is why I recommend using Estimates, when income spans year ends. Budgets are restricted to fiscal year periods, but Estimates are not. Estimates are used to compare against, the same as Budgets, while not being constrained by the date limitation of Budget. Estimate Vs Actuals is similar to P&L Budget Vs Actual, but it spans any timeframe, up to as long as you have data activities.

I see where you are coming from with regard to the estimate technique, however, on your post of 3/31 you recommend creating invoices from the estimate. Invoicing from estimates creates new income.  The income was already booked when received.  Also setting up estimates requires setting up items to fill out the estimate. 

I agree to disagree on the approach if you can provide the off set to the entry created when the invoices were created from the estimates.  I think my approach is fairly straight forward and causes no under/over reporting of income.

Here is how to use Estimates for grant tracking and reporting.

I get approved for a three-year grant, so I create an Estimate showing this is Income. I can class track the item(s) on the esimate as usual.

I invoice from the estimate, each time, for the date of the payment. Progress invoicing can be done by $, % or Qty.

For example, this might be 7/1 for each of the three years. Some people like to do these all in advance, and some people like to do them as the actual date approaches, and some of my clients do this when the payment arrives.

Let's look at year 2: Estimate Vs Actual report is going to allow you to see income received Vs income expected.

Okay qbteachmt.  But the question posed by the original post CLEARLY states that the finance team her to record the receipt in the year that that grant money was received.  She's all ready recorded the entire grant as revenue.

This is not a GAAP question or even a policies question.  The question is now that that revenue has been recorded in a different year, how can she create budget reports. 

gaml,

Read the streams below, but if you already recorded the multi-year grant in full, you do not want to record the income again without an off-setting income account in the current year.

"We get multi-yr grants. Finance team says must be included as income in the year received"

We need to be separating "awarded" from "received." The grant is awarded. The funds are received later.

This is done by documenting the actual receipt of the payment, not by documenting the whole amount of the grant as income. It isn't income until you start getting money. Or, for accrual basis, that is why you generate the progress invoices in advance.

That is why I start with an Estimate, as soon as the grant is applied for. Change the status to Awarded when you get notified you were awarded the grant.

Invoice from the grant as the funds come due.

For a reimbursment grant, you would not do the progress invoice part of this method. You would enter actual cost transactions with job tracking. Then you invoice for direct time and costs. You present the invoice for reimbursement.

But you still use Estimate. With either method, you can report Estimates Vs Actuals.

For a specific project funded by multiple grants, you use Customer:job, with the project as Customer and each granting source is a Job. Now the Project is easily reported on, with the Job reports. If your organization is incurring some of the costs, for Matching Grants, you also set up your ogranization as a Job. This allows you to split and allocate everything related to this one project across the various funding sources.

"Thanks for all of the respones. To help clarify, in several cases we are awarded a multi-year (unrestricted in two cases) grant and receieve ALL of the funding up front. "

This is Income when received.

"So the income all gets recieved in year one but isn't all spent in year one. I want a budget projection that spreads out the income over the course of the grant for planning purposes"

Well, it really seems you need to budget the Expenditures, not the income. The income already is received. A budget is to compare the plan to the actual. In your case, the Actual is Expenses. Budget by Job is expenditures to manage the plan for using the funds.

You only budget income and budget expense to compare them to Actual and not to each other. To compare them to each other, this would be P&L by Job, Estimate Vs Actuals (shows your income and shows your expenses), etc. These are operational reporting and not financial reporting. Operating reports are performance perspectives.

Budget is fiscal year perspective.

Estimates and job reports are performance perspectives. You can even run P&L by Job to span the three years.

You have everything you need but you are looking in the wrong place and/or for the wrong tools.

I am not describing how to strictly comply with GAAP. I am not reviewing how the accounting should be done.

I am describing the tools that are available in QB: class and Job (job or customer = grant) and budget functionality all meet different goals.

Since there is no further income to be received, there is no reason to budget for Income. Since the plan is to spend, the budget is done for the expenditures.

But if you want to compare income and expense, for a grant and/or a class and/or a program, that is not Budget. That is all I am trying to explain. The tools for comparing income and expense related to this grant are done not at the Budget tool.