QuickBooks is a profitable option for the nonprofit sector. It has been observed that the non-profit sectors initiated more investments in software in the last few years. The primary purpose of this is to increase efficiency.
Even though many non-profit organizations use QuickBooks to do some financial tasks, setting QuickBooks for nonprofit companies is not an easy task. Setting up a non-profit company plays a vital role since a wrong setup can create a huge problem later on. For incorrect use of funds, you can also be charged penalties.
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Let’s learn more about why QuickBooks is best for Non-profit accounting.
Why is QuickBooks Best For Nonprofit Accounting Purposes?
A non-profit company requires tracking of the expenses of different programs and funds. QuickBooks has appropriate qualities and features that allow the automation of non-profit accounting. It permits making individual expenses and accounts to monitor the budget. You can conveniently use the finance report as per your requirement and save ample time.
A non-profit company needs to document funds offered by donors and track pledges to make sure the right distribution of the restricted as well as the non-restricted funds.
How to Set up QuickBooks for Nonprofit?
You must update the QuickBooks account for a non-profit to include the requirements of the organization more precisely. By applying small changes, you can make sure the account uses forms, terms, and reports that are used in nonprofit organizations.
Solution 1: Set Up a Nonprofit Business Using Express Start
Step 1: Open your QuickBooks account.
Step 2: Press on the icon that says “New Company“. You can also navigate to the “File” option and then press “New Company“. This commences the setup wizard.
Step 3: Type the name of the company along with the company tax ID in the concerning boxes. Choose “Non-Profit” from the given drop-down list for the “Company Industry” along with “Non-profit” from the particular drop-down of “Company Type“.
Step 4: Add the contact details, ZIP code, city, phone, state, and email, along with website details on the contact information screen. Press “Continue“.
Step 5: Press “Preview Your Settings” to check the default features, file location details, and Chart of Accounts. Press “OK” to get back to the dialog and then press “Create Company File” in order to continue.
Step 6: Press the “Add” button if you want to set up the vendor’s and customer’s link to products, etc. Or else, press the “Start Working” button and start adding transactions.
Solution 2: Set Up a New Nonprofit Business Using the Easy Interview
Step 1: Click QuickBooks and open it.
Step 2: Press on the “File” option and then click “New Company” in QuickBooks. When the wizard starts, choose “Advanced Setup“.
Step 3: Add the company address, name, and contact details, along with the Tax ID in the right boxes, and press “Next” when it is complete. The only details needed is the name of the company but finish the remaining fields so that the particular fields may show up on the forms you want to print.
Step 4: Choose “NonProfit” from the “Company Industry” and the “How your company is organized?” screen and then press “Next” to carry on the particular interview.
Step 5: Choose a month for the box named “My Fiscal Year Starts” in. Choose it from the drop-down list and press “NEXT“.
Step 6: Add an Administrative password to save the company file and press “Next“. The password you added is case-sensitive. Press “Next” again in order to save the particular company file. The particular file is then saved as the given company name. If you wish to edit the default location along with the name, make the given changes in the box named “Save” and press “Next“.
Step 7: Press “Yes” or “No” to all the questions that asked whether you want to sell the products or services or do both. Press “Next“.
Step 8: Check the “No” option in the dialog box that asks you whether you will charge a particular Sales Tax. Press “Next” to Continue. The default for a particular non-profit setup is usually “No“.
Step 9: Check the “No” option to make estimates and press “Next“. No is the default value for the particular non-profit company type.
Step 10: Press “Yes” to the particular customer order tracking dialog screen and press “Next“. You can utilize these sales orders to monitor contributions accepted from donors.
Step 11: Press “Yes” and use the billing statements. Now press “Next“.
Step 12: Press “Yes” for utilizing progress invoicing and press “Next“. Invoicing can be utilized to track the contribution amount that was confirmed but not received from the source of the funds or the donors.
Step 13: Press “Yes” to monitor and manage bills that are owed to vendors and press “Next“.
Step 14: Press either “Yes” or you can press “No” in the dialog box that analyzes whether your company takes part in project planning, inventory monitoring, or pays the salary to the employees. Analyze whether you wish to pay the employee as wage employees or contractors. Now press “Next“.
Step 15: Make your Chart of Accounts. Press the date to begin tracking your transactions and press on “Next“. You can get back and change your Chart of Accounts anytime you wish by navigating to the “List” menu and choosing “Chart of Accounts“.
Step 16: Choose the date you want to start tracking transactions or choose the start of the year. Check the list of income and expense accounts prepared from the interview. Press any additional items you wish to add and then press on “Next” to continue.
Step 17: Press “Go to Setup” and then go to “Start Working“, in case you want to start entering the transactions but without setting up products, vendors, or bank accounts. Or else, press the “Add” button for every category to add the particular items.
Step 18: Navigate to the “Edit” menu and choose “Preferences“. Choose “Accounting” displayed on the navigation pane and press Enter. Now go to the “Company preferences” tab and check the boxes that say “Use Account Numbers” and then click “Use Class Tracking“.
Step 19: Navigate to “Reports and Graphs” and then click “My Preferences” and check the particular “Refresh automatically” button.
Step 20: Press “Tax 1099” and “Company Preferences” tab. Press “Yes” to complete the “Do you file 1099-MISC forms“.
In this article, we have talked in detail about how to set up QuickBooks for non-profit organizations.
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Why it is Crucial to Set up a Budget in QuickBooks for Non-profits?
Generally, non-profit organizations need yearly budgets. Inside QuickBooks, they are quite easy to set up displaying the projected revenue and expenses at the early start of the year. When a budget enters QuickBooks, it means that the budget can be analyzed anytime of the year to see how the company is performing.
How to View Donors instead of Customers on Reports and Forms in QuickBooks?
Step 1: Discover the Settings option and press on Account and Settings button.
Step 2: Select the Advanced tab.
Step 3: Find the Edit button and select the dropdown that has the customer label and click on Donors.
Step 4: Press on Save and Close.