USA QuickBooks for Representative Payee Accounting

[Dspeck]

Has anyone used QuickBooks to account for "representative payee" transactions? A "representative payee" is contracted by the Social Security Administration to assist mentally disabled individuals budget and control the expenditure of monthly SSI allotments. The payee controls the disbursements from the clients' checking accounts. At a minimum, the ledger has to carry a bank (checking) account or each payee and an offsetting current liability "custodial" account. When paying a bill for the payee, the entry is a debit to the custodial account and a credit to the payee's checking account. However, I want to be able to track the disbursements by type of expense (utilities, rent, entertainment, etc.) to be able to report to the SSA. I can't see a way to classify the disbursement while having the system debit the custodial account or vice versa. I'd like to talk to anyone who has been able to make this work.

 

[Renee Korb]

Hi I work with an entity that serves 100 Rep Payee individuals. We use QUickBooks and we debit the expense account when a bill i s paid for an individual. We dont operate any custodial accounts. Every individual has their own checking account titled Company name Rep Payee for individual name. SInce the payment is done via check or EFT from that account the vendor being paid is named along with the expense reason. We use a specific account for the indivduals assets and liabilities. We use joint revenue and expense accounts but identify individual specific using the job/name column. You can run P&L specifc reports by job name. The biggest issue is QB is not adequate to handle the volume of 50 individuals let alone a 100. I am looking for bookkeeping specific guidance and best practices and what others are doing or seeing in terms of SSA audits & citations.

 

[eHollycpa]

A good solution given the limitations of QBs.

 

[dwayne1376]

Hi.. We are looking to start our own Organizational payee services here in Denver Colorado. While looking at software, we've noticed that they are rather expensive. And since we are starting from the ground up, may need to wait a bit before we invest in those tools. After posting about using QB, how do you feel about the software now? Is it easy to use? Will it suffice until we are ready to purchase another tool? thank you in advance

 

[Dspeck]

I made it work by treating each client as a separate department. This allowed producing a separate "Profit and Loss" statements showing how much each client received for the reporting and and how they were spent funds were spent. It also allows you to take advantage of QB's ability to generate vendor reports

 

[dwayne1376]

Awesome.. Thank you for the quick response @Dspeck. Question, how many "departments" can you add?

We recently received our 501c3 approval letter. So we are excitedly moving forward in the steps to become a payee.. I really do appreciate your responding to my questions.

 

[Dspeck]

Awesome.. Thank you for the quick response @Dspeck. Question, how many "departments" can you add?

We recently received our 501c3 approval letter. So we are excitedly moving forward in the steps to become a payee.. I really do appreciate your responding to my questions.

Unfortunately, I can't answer the question factually. Since QB is a relational database, I suspect there is an upper limit, but I don't know what it is. I've retired since I used the product back in 2015 so no longer have access to support from Intuit. I would think a call to Intuit would get you the answer, though. If there is limit, you would want to be sure you have a way in place to close out defunct client accounts and "recycle" the ID marker(s). Shouldn't be difficult, but needs to be addressed before you get started. Good luck!

 

[pauldonnelly61]

Our agency has had some considerable frustration with Quickbooks as we have 375 clients and posting everyone individual SSI benefit to 375 individual cash accounts is simply not "doable" We looked at AccuFund as they have a nice Rep payee Platform, but the pricing was 40% of our annual fee for service revenue - Also, their program only worked by having all the accounts in one combined account, which is something we definitely want to steer clear of. So Quickbooks it is, for the time being. Our solution, a few years back, was to setup a Master Rep Payee Banking Account that we cushioned with our own start up funds($50K or so) and attached all of our individual Rep Payee Participant accounts under our Main Account. We set up a GL Expense Code for each participant with subcodes for Reimbursements to our Agency, Rent, Food, Utilities, Other and fee For service. We then would 1- Cut ALL payments on behalf of our Rep Payees out of our Main Operating Account 2 - Run a Quickbooks account for all of our folks for the month 3 - Login in to our Online Banking Platform and transfer funds, per Quickbooks Expense Report, from each Individual Account to our Main Operating account 4 - Post, under "Make Deposits", each payment rec'd via transfer from our RP Participants and credit their individual GL Expense account. 5 - Run a new QBooks report and, if all goes well, the report reflects $0, i.e. all payments we made on their behalf is offset by the transfer back to us. Prior to all this we also book a monthly Fee For service Journal entry for all participants. The downside is that when someone call for a bank balance, you can't look in QBooks as we don't record the SSI deposits. We have to login into the Bank platform and check the individual's Bank Balance and then look at Quickbooks to assure that their expense balance foots to $0, if not, we have to manually deduct the balance due per QBooks before conveying a balance to anyone. I would recommend this to people with smaller client bases, it's pretty seemless if you can live with having to take one extra step to secure what the real cash balance is for a participant. For us, we've outgrown it and pressure from outside sources to give them an electronic report that reflects everything have us once again looking for solutions.

 

[simonekahn]

Which QuickBooks version