7 Tips for Non-Profit Bookkeeping in QuickBooks

Using QuickBooks in your nonprofit can provide you great information. The key is understanding how to best utilize it to meet your specific and detailed needs. Here are 7 tips for using QuickBooks in a nonprofit environment:

1. Set your Preferences - There are two types "My Preferences" & "Company Preferences"

My Preferences - Are for each individual user. It is designed to make QuickBooks customized to your personality and the shortcuts you like to use within QuickBooks.

Company Preferences - Are what the Administrator sets. It is designed for the company/organization's needs and ease of use and oversees the overall company file.

2. Use Classes & Subclasses to Track Programs - Take time to consider the names of each class. The key reason you would want to use the class feature is that you want to be able to see the income and expense as it relates to each of your "classes" or programs. This is also great for budgeting as you can budget by class. Even though you are a nonprofit, your programs should be selfsustaining to ensure you are utilizing your funds in the best possible way.

Example:

100 Seniors Program

101 Meals on Wheels (subclass)

102 Entertainment (subclass)

103 Exercise (subclass)

200 Children's Education

201 Preschool (subclass)

202 Elementary School (subclass)

3. Do not overload your customer list with all the small incidental donations. You can create a generic customer name, such as "Donor", or leave the name field blank, and post all appropriate donations. By "appropriate donations" I mean donations that arrive without the need to create an invoice/pledge. Normally nonprofits have a third party program that tracks all their donor information (name, address, history of giving, etc) along with inkind donations; therefore, there is not a need to duplicate that in detail in QuickBooks. Ideally your third party donor tracking system interfaces directly with QuickBooks for ease of information transfer.

4. Use Jobs to Track your Grants - If you receive grants and are needing to do grant tracking, the funders will be set up as a Customer. I normally set up a Customer of "Grant" and then set up a job under that customer for each of the grants. This enables you to track inflows and expenses to that customer/grant and provide a Profit & Loss by Grant. Then you can create reports for all your grants (customer) or a specific grant (job).

5. Make sure you code your bills and payroll correctly using job and classes so that you can get accurate reporting. This is extremely important when providing reports back to your grant funders and at year end to assess what you have earned and what is still unearned from a revenue perspective. QuickBooks has these features, embrace them so you have good information at your fingertips when you need it.

6. Use the time saving features built into QuickBooks such as:

*Memorize Bills - It saves your time for the recurring monthly bills that are the same each month. For example, your rent and other professional contract services that are consistently the same each month.

*Bank Transfers - When transferring money from one bank account to another - use the "Transfer Funds" function in QuickBooks instead of using "writing a check" or any another way. Only time I would not recommend this is if you are utilizing the Balance Sheet by Class feature within QuickBooks, the transfer function does not allow you to select a class.

*Memorize Reports - When you have customized reports exactly how you want them, you the memorize feature so you can easily retrieve them for future use.

7. Keep your bank and credit cards reconciliations up to date. Do reconciliations as soon as you get your statement. This is part of cash management. Make sure you have separation of duties as your auditor will be watching for good controls.

Any accounting or bookkeeping system will take some time to understand the various functions available, QuickBooks is used by many nonprofits and can create specific reports to meet your needs, if you utilize the functionality to its fullest potential.

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