This helps you better budget your nonprofit’s technology dollars. You can also customize your nonprofit’s accounting and fundraising functions using the various add-on applications available. As with other QuickBooks products, QuickBooks for Nonprofits requires users to enter transactions using familiar-looking forms (invoices, bills, checks, etc.). It makes it easier for employees and volunteers who are not accountants to assist your nonprofit with some bookkeeping.
The easiest way to set this up is to create one budget in QBO per grant. This approach makes the most sense as most grants will have different start and stop dates. Sometimes, multiple grants are interrelated – say two grantors are syndicating to fund a nonprofit. In this case, having all of the grants on one budget may make more sense. Depending on the size of the grant and the organization, non profits can either track grants manually in a spreadsheet or in QuickBooks Online using Customer Projects.
Today’s leading accounting platforms offer standard security features, such as data encryption, secure credential tokenization and more. While human error will always play some role in security breaches, you can be confident comparing deferred expenses vs prepaid expenses in your accounting platform when it comes to keeping your information safe. Read our first in the series on functional expenses or third in the series on chart of accounts. The last step is to setup reports in QBO for the budget versus actual comparison of the grant. QuickBooks Online delivers a “Budget vs Actuals” report under “Business Overview” in the reports section.
Grant Budgeting with QuickBooks Online
We just transitioned over to QBO and I am still trying to figure out an easy way to record deposits that need to be allocated to separate funds. I have seen several recommendations to setup bank sub-accounts for each fund. So if I make one deposit for $3,000 (donor wrote one check) that needs to have $1,000 going to three separate funds in QB I have to record three different deposit? How does that $3,000 deposit show up on my bank reconciliation?
Second is to track the grant revenue and expenses in QuickBooks Online using projects. The key to making this method work is to ensure that every types of business transactions cash credit internal external expense that is tied to a grant is both in QuickBooks and the grant budgeting spreadsheet. At each month end, the accountant should verify that no expenses were missed in either. Finally, to account for restricted assets at the end of the year, the accountant can review the grant budgeting spreadsheet to make entries for restricted funds.
Fund Accounting for non-profits in QuickBooks Online
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. Here is a list of our partners and here’s how we make money. The funds are used to measure the revenues and expenditures arising from particular activities. Each organization is responsible for the proper collection, disbursement and control of all money relative to the funds the organization receives. Example, monthly donations of $10k with $1k designated Building Fund, $1k should be moved out of operating funds book value of debt into the building reserve.
QBO fund accounting
- Donors use the application to figure out what organizations they want to fund.
- You’ll then be taken to a screen where you can enter in the budget values for each account.
- QuickBooks Online delivers a “Budget vs Actuals” report under “Business Overview” in the reports section.
- It should also offer nonprofit-specific accounting functionality, such as the ability to receive donations, manage restricted funds and file Form 990.
Consider whether your organization can afford any of them. Narrow your list down of considered software to the ones you can afford. In QBO’s project setup, each project is tied to a customer. To flip this to the nonprofit world, each grant is tied to a grantor. Tracking a grant for a small nonprofit or a small grant can be done offline from QuickBooks Online or other accounting package. In this approach, a budget for the grant is created in a spreadsheet such as Microsoft Excel.
You can use this feature if the accounts or funds on the transaction belongs to the same group. However, we use Class tracking and Banking Sub-accounts to track individual funds. If the funds on grants are considered restricted and some will remain at year end, running the Actual vs Budget for each grant will then provide the necessary values for the restricted analysis.