Key takeaways
What this article covers, in order:
- "We've got eleven grand in the bank, right?"
- What "restricted" means
- Keeping a restricted funds register
- Recording restricted money in the books
- Donations
- Memberships paid in advance
The trap for small clubs and community groups is treating the bank balance as money you're free to spend. Some of it was given for a specific purpose: a grant for a new kitchen, a donation for the junior program. Good not-for-profit bookkeeping tracks those restricted funds separately, so the committee can see what's actually available and the treasurer can hand over clean books at the AGM.
"We've got eleven grand in the bank, right?"
Picture a footy and netball club in Bendigo. The committee meeting is on, someone wants new goalposts, and the treasurer reads out the bank balance: $11,240. Everyone relaxes.
Except $5,580 of that is what's left of a council grant that can only be spent on the canteen kitchen. Another $1,320 is a donation earmarked for junior coaching. The money the club can spend on goalposts is far less than the bank balance suggests.
This is the most common problem in volunteer-run books, and it has nothing to do with dishonesty. It's just that a single bank account hides the strings attached to the money inside it.
What "restricted" means
A restricted fund is money that comes with conditions on how it can be used. The usual sources:
- Grants from councils, state governments or foundations, usually for a named project, often with a report due at the end.
- Donations for a stated purpose, like a memorial fund or a junior program appeal.
- Sponsorships tied to something specific, such as uniforms.
Unrestricted money is everything else: memberships, canteen profit, general donations, raffle proceeds, fundraising events. The committee can spend that on whatever the club needs.
Some grant agreements require unspent money to be returned. Read each agreement and note the conditions in your register, because they decide how you record it.
Keeping a restricted funds register
You don't need special software to start. A simple register, updated monthly, does most of the work. Here's the Bendigo club's as at 30 Sep 2026:
| Fund | Received | Spent to date | Remaining |
|---|---|---|---|
| Council grant: canteen kitchen | $15,000 | $9,420 | $5,580 |
| Junior coaching donation | $2,500 | $1,180 | $1,320 |
| Uniform sponsorship | $4,000 | $4,000 | $0 |
| Total restricted | $21,500 | $14,600 | $6,900 |
Bank balance: $11,240. Less restricted funds remaining: $6,900. Available for general use: $4,340.
Check: $11,240 − $6,900 = $4,340.
That one line, "available for general use", is the figure the committee should hear first at every meeting.
Recording restricted money in the books
There are a few ways to do this in your accounting records. For a small club, either of these works:
- Separate income and expense accounts per restricted fund. "Grant income: kitchen" and "Kitchen project costs". At any time, income minus costs equals what's left. Easy for volunteers to follow.
- A separate bank account for a large grant. If the grant is significant or the agreement asks for it, a dedicated account makes the money impossible to spend by accident and makes reconciliation obvious.
Some organisations hold unspent grant money as a liability until the conditions are met. Which approach fits depends on the grant terms and any reporting your organisation has to do, so it's worth a quick conversation with an accountant who works with not-for-profits, once, when you set things up.
Donations
For bookkeeping, record each donation with the donor's name (where you have it), the date, the amount and whether it was given for a specific purpose. If it was, it goes into the matching restricted fund.
If your organisation has deductible gift recipient (DGR) status, there are specific rules about what goes on a receipt. If you're not sure whether you have that status or what your receipts need to show, check with your accountant rather than guessing. Never issue a "tax-deductible" receipt unless you know the organisation is entitled to.
Memberships paid in advance
When members pay for next season during this season, you've received money for something you haven't provided yet. Some clubs record it as income when received, which is simpler. Others record it as "memberships received in advance" and move it to income when the new season starts, which gives a truer picture of each season. Pick one approach, write it down for the next treasurer, and stick with it.
Canteen and event cash
Cash is where clubs most often lose track. A few habits that protect volunteers as much as the club:
- Two people count the cash, and both sign the count sheet.
- Bank it intact. Don't pay the ice delivery out of the canteen tin; pay it from the account and keep the invoice.
- Record takings by event or by day, so a Saturday canteen and a trivia night don't blur together.
- Keep the float separate from takings and record it as a float, not income.
Example: Saturday's canteen tin had $1,186.50 at close, including a $200.00 float. Takings banked: $986.50.
A month-end checklist for treasurers
- [ ] Bank account reconciled to the statement
- [ ] Every deposit identified: membership, donation, grant, canteen, event
- [ ] Restricted funds register updated, with remaining balance per fund
- [ ] "Available for general use" figure calculated for the committee
- [ ] Cash count sheets signed by two people and filed
- [ ] Bills approved by a second committee member before payment
- [ ] Grant report due dates checked
If your organisation is registered for GST, code transactions correctly as you go; your BAS agent or accountant handles lodgement.
Handing over at the AGM
Treasurers change. The new one should inherit a reconciled bank account, a current restricted funds register, a list of unpaid bills and a short note on how things are recorded. If your books live in one person's spreadsheet on one person's laptop, that handover is going to hurt. Shared books with proper access make it a 30-minute job.
How HelloBooks helps
HelloBooks Free is A$0 with no card and no expiry, with 2 users, 1 live bank feed and up to 200 transactions a year. That covers plenty of small clubs, and it means the treasurer and a second committee member can both log in. You can connect your bank account (most Australian banks and cards are supported) or import a CSV statement.
The reconcile screen lines your statement up against your books with an AI match suggestion on each line, showing a confidence score and why it picked that match. You work through the leftovers, and the reconciliation report (opening balance, cleared items, outstanding items, closing balance) exports as PDF or CSV, which is handy for committee meetings and your reviewer. Once a month is reconciled and signed off, it can be locked, with any reopening logged.
If you need more users or a second account connected, Pro is A$30 a month with unlimited bank connections and bills and approvals. Your accountant or reviewer can be invited into the same books. Read about bank reconciliation or see pricing.
FAQs
What is a restricted fund?
Money given for a specific purpose, like a grant for a project or a donation for a named program. It can only be spent on that purpose.
Do we need a separate bank account for a grant?
Not always, but for a large grant it makes tracking much easier, and some grant agreements ask for it. Otherwise, separate income and expense accounts per fund work well.
How should we show restricted money to the committee?
Report the bank balance, minus restricted funds remaining, equals money available for general use. That last number is the one that matters for decisions.
Can we issue tax-deductible receipts for donations?
Only if your organisation has DGR status, and the receipts need to meet specific rules. Check with your accountant before issuing any.
What should a new treasurer receive at handover?
A reconciled bank account, the restricted funds register, unpaid bills, signed cash count sheets and a short note explaining how things are recorded.
Keep the register current and the committee will always know what it can really spend.
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