I am helping a NGO set up its accounting system so that it can produce multi donor reports, in different currencies, with different reporting periods. Some of the activities are funded by more than one donor. The NGO is regional and has offices in 3 countries. This NGO uses QuickBooks. I have set up a new chart of accounts, that is more reflective of the expenses incurred by the NGO. The 6 donors have separate bank accounts, and I have set them up as customers. The activities under each donor I have set up as jobs. I noticed that there is a option for "class". What is class and what potential does it offer? About 6 activities are funded by more than one donor. Can one job be shared by more than one donor/customer? For the jobs, I would like to enter budgets. How do I do that? For those jobs shared by multiple donors, can QuickBooks accept multiple budgets for each job, depending on each donors contribution towards it? I will be reentering all payment vouchers from January -June 2009, coded with the new chart of accounts and jobs. The CEO is considering also reentering 2008 transactions, using the revised chart of accounts/jobs. I would like to have both in the one QuickBooks rather then separate QuickBooks for 2008, and one for 2009. However 2009 will be entered first, should the beginning date for starting QuickBooks then be 01/01/2008? If so, I will just have to reinstall QuickBooks and put in the 01/01/08 date as the current one has 01/01/09. If I reinstall QuickBooks with the start date as 01/01/08, will the system allow me to enter 09 transactions? What would you advise? The CEO would like to be able to make comparisons for 2008 and 2009. Grateful for your assistance. I am not familiar with QuickBooks, thus the above questions.
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Classes are a way of categorizing your Profit & Loss report. I’m not familiar with the tax reporting for NGO’s, but I believe it’s similar to nonprofits which should setup classes like this:
When donors fund a particular program, the funds are restricted until spent on what the donor designated, so they should generally be deposited into a temporarily restricted fund. Once you’ve spent the money and released the restriction, you should transfer the funds from the temporarily restricted fund to the unrestricted fund. The easiest way to accomplish this is to set up an Other Expense account called “Transfer to Unrestricted Fund” and an Other Revenue account called “Transfer from Temporarily Restricted Fund”. Create a journal entry at the end of each month using these two accounts to transfer the funding that’s been released from restrictions.
There’s no problem if you want to use jobs and I definitely recommend using them for grants, but I wouldn’t use this as a substitution for classes.
You don’t need to re-install QuickBooks to add a new file. Just go to File > New Company and answer the questions. However, you might find it easier to just adjust the transactions in your current file. The easiest way to get a list of all your revenue and expense transactions is to open a Profit & Loss Detail report. Just click on each transaction and make the changes you want. However, if you’ve already filed your tax return for 2008 I’d be careful about making any changes. There’s no problem adding classes and jobs, because they won’t change your basic Profit & Loss, but if you change the revenue or expense account it might.
For fiscal year budgets, you can set up budgets by class at Company > Planning & Budgeting. For multi-year budgets, you should use estimates at Customers > Create Estimates. You might need to activate the feature at Edit > Preferences > Jobs & Estimates first.
This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice. For further information, please consult appropriate professional advice from your attorney and certified public accountant.
Written by +Ruth Perryman, CMA, CFE, CFM, MBA
Ruth is the president of The QB Specialists, an Intuit Premier Reseller that offers huge savings and expert advice on QuickBooks POS and QuickBooks Enterprise. She is an Advanced Certified QuickBooks ProAdvisor and a member of Intuit’s Trainer/Writer Network. She is also certified in QuickBooks POS and QuickBooks Enterprise and has provided expert QuickBooks help to thousands of businesses all over the world since 1996.
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