How to Setup QuickBooks NonProfit Chart of Accounts?

The detail list of minor categories under the major categories of asset, liabilities, net assets, revenues and expenses t is known as chart of accounts.

For example: The chart of accounts is like a building which is about to get constructed. The stronger the base, the stronger the building is.

In other way, we can also say that the chart of account act as a filter through which the information from outside world enters in the accounting system. The basis of report is totally dependent on the chart of accounts.

You can use QuickBooks Online for Nonprofit. You can have Chart of accounts as per your QuickBooks account. Also, you can create multiple accounts in QuickBooks Online by purchasing additional subscription.

What are the Types of Accounts?

People thinks that the bank provide us only two types of account that is current account and saving account but no, the bank provide us six types of accounts which financial institution offers. The six types of Accounts are:

• Banking Account at a Glance: The account at a glance is prepared to provide the summarized view of the account.
• Checking Accounts: The procedure of withdrawal and deposit of money in an account on a daily bases at financial institution is known as checking account. It is not a debit card.
• Saving Accounts: It is the basic account which securely deposits your amount in the bank. It ensures that you can withdrawal your money whenever you need.
• Money Market Accounts: The money market account or money market deposit account is the account which pays interest on the money deposit in the account on the basis of current interest rates on money. It is the special type of bank which has some extra features that regular accounts did not have.
• Certificates of Deposit: It is usually issued by the commercial bank. Certificates of deposit accounts means that the bank provides you some rate of interest on the amount deposit in bank for some time period.
• Individual Retirement Arrangements: It is the special type of saving account in which you can save your money for the purpose of creating a retirement corpus.

Advantages of Chart of Accounts for Non Profit:

• Your chart of accounts reflects your unique organization.
• The appearance of the balance sheet and the profit and loss reports are shown by the chart of accounts.
• Chart of Accounts helps in defining the detail of organization’s transaction.
• It is easy to enter the detail of transaction with the help of chart of accounts.
• Your company budget depends on the accounts, so it is easy to recognize it with the help of chart of accounts.

Set up of Chart of Accounts for Non Profit

The chart of account is divided in three columns. So, while creating the chart of accounts first you have to create a blank chart and assign columns in it. Setting of chart of accounts is easy and simple to create. Let’s create it by following the below mentioned steps:

• Create the Name of the Business Accounts: In this you have to give the name to business account for which you are reporting like Bank Fees, Cash, Taxes etc. It helps you identify your account in future when you need it.
• Assign Accounts Numbers to the Business Account: assign account numbers are the numbers which are assigned to the each and every account number. Following are the common account number which are given to the common account names, they are:
  • Assets: Thousand to One thousand nine hundred ninety nine
  • Liabilities: Two Thousand to Two thousand nine hundred ninety nine
  • Income: Four Thousand to Four thousand nine hundred ninety nine
  • Operating Expenses: Six Thousand to Seven thousand nine hundred ninety nine
• Organize the Names of the Account into One Account Category Type: You have to select one from the four account type i.e Assets, Liability, Expenses, Income according to the name and need of your account.

Setting Up QuickBooks for Nonprofit

It is the unique process in which nonprofit plan, record, and report base upon their finances. The primary focus of profit is to earn or gain profit but the nonprofit basically focus on the accountability aspects of a accounting.

• After learning of planning and implementation you can start configuring QuickBooks for Your Nonprofit.
• In order to run reports by finding source or program you need classes utilities and utilize of customer and resource in order to set up QuickBooks.
• For Nonprofit coding and reporting you have to finish configuring QuickBooks.
• Search for the Version of QuickBooks which is available on Techs up.

Basic and Practice of Nonprofit Accounting

There are five basic and practice of nonprofit accounting, they are:

• How the Nonprofit Account is Different: The nonprofit is the type of accounting which is also known as fund accounting. As earlier discuss that nonprofit accounting focus on the accountability of the accounts.
• Non Profit Accounting Statements and Reports: Nonprofit accounting is not free for all. One who should access the nonprofit account must know the GAAP standards. GAAP stands for Generally Accepted Accounting Principles.
• Best Practices of Non Profit Accounting: You nonprofit account is responsible for all the bookkeeping entries like performing account and balance sheet renocillations, preparing of financial statements and reports etc in order you can make best financial decision in order to manage your nonprofit.
• Outsource Non Profit Accounting: In your company there will be one dedicated team with skill and capacity to handle accounting needs. If yes then it good in case if you do not have dedicated team for it then you can also outsource your account in order to handle the accounting needs properly.
• Non Profit Accounting Firm Recommendation: Whenever you outsource your finances to any of the trust worthy team then you will have the access to the professionals who are not only expert in finance but also understand the loop holes of the nonprofit world.

Configuring the Account for Nonprofit Organization

There are two methods of configuring account for nonprofit organization, they are:

Change the Company Type to Nonprofit

• From the Menu Select the Settings.
• From Setting Page Select the Account and Settings Option.
• Then Select the Advance option from the Account and Setting Page.
• Select the Edit Button in the Company Type.
• Now from the Drop Down Menu select the Tax Form and then Select Nonprofit Organization.
• Hit the Save and OK Button.

Change Customers to Donors

• From the Menu Select the Settings.
• From Setting Page Select the Account and Settings Option.
• Then Select the Advance Option from the Account and Setting Page.
• Select the Edit Button in the other Preference Menu.
• Now from the Drop Down Menu Select the Customer Label and then Select Donors.
• Hit the Save and OK Button.

---

Frequently Asked Questions