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How to Enter Donations in QuickBooks for Nonprofits

I am contacting you after reading a "QuickBooks Tips & Tricks" posting made by you found from a Google seach.  I have been trying for weeks (months?) to get QuickBooks Online Edition (QBOE) setup for our nonprofit. Admittedly, I know nothing of accounting or bookkeeping and have been going through a huge learning curve in the process.  We hired a CPA to help us with the process about a year ago, but unfortunately he either did not know how to set things up for our nonprofit, or did not take the time to do it correctly. Either way, we have been under the gun trying to get things in order, and I am at my wits end. I have tried to set up a Chart of Accounts in QBOE according to UCOA Version 3, and set up Classes based on the same. The challenge is now entering the data, or to be more correct, reassigning existing entries from QuickBooks into the correct accounts and classes.

With that in mind, I don't know if I need to enter Sales Receipts or Invoices. I have no idea how to deposit donations into our physical bank account, and then enter into QuickBooks.  I have been studying and trying to learn so much in such a short amount of time, I am thoroughly confused. Furthermore, trying to "bend" QBOE to work for nonprofits is a challenge in and of itself. Intuit sold us the monthly service package, and said that it will work with nonprofits just fine. What they didn't tell us is that we need someone who really knows what they are doing.

Hopefully this email won't scare you away from wanting to help us. Our books aren't that complicated, meaning we do not have a ton of entries. But, I’m afraid the one's we do have are completely wrong in terms of accounts/classes. Especially after I adapted the Chart of Accounts over to UCOA.

Your classes really shouldn’t be the same as your chart of accounts, that’d be a bit redundant.  Most nonprofits use UCOA for their chart of accounts and something like this for their classes:

Unrestricted
   G&A
   Fundraising
   Programs
      Program 1
      Program 2

Temporarily restricted
   Designated donations
   Grants
      Grant 1
      Grant 2
  
Permanently restricted
   Endowments
      Endowment 1
      Endowment 2

You use sales receipts for donations and invoices for pledges.  Make sure to use undeposited funds and go to Banking > Make Deposit to group your payments so they match the actual bank deposit you’re making.  The steps for pledges are Customers > Create Invoices, Customers > Receive Payments, Banking > Make Deposits.  The steps for donations are Customers > Enter Sales Receipts, Banking > Make Deposits.

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Ruth Perryman - QuickBooks Specialist Written by +Ruth Perryman, CMA, CFE, CFM, MBA

Ruth is the president of The QB Specialists, Inc. and has provided QuickBooks help to thousands of businesses around the world since 1996. She is an Intuit Solutions Provider, an Advanced Certified QuickBooks ProAdvisor, and a member of the Intuit Trainer/Writer Network. She is also certified in QuickBooks Point of Sale and QuickBooks Enterprise Solutions.

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