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Blank contractor invoice for non-profit organizations

this is the second part to um on our quickbooks um training for ngo in the first part i laid the foundation of setting up quickbooks for an ngo and the first one was how to set up your relevant account heads the chat of account like income expenses assets or liability then i also went ahead to explain how you can add your bank account the naira account your dollar account and for some ngos that are open to international donation like they have foreign donors who are sending funds and look in foreign currencies i was able to activate multiple currencies and then add all the foreign donors and i made mention of the fact that when you're adding a donor in foreign currency ensure you select the currency that it denotes donating that's very important if you're adding a look who don't know also select the currency because whenever you're receiving a fund from a following donor if you don't add the currency of that donor system will assume that is the home currency which is narrow and that will be wrong so it's important for you to set up your foreign currency donor india various currencies and also your local donor and when you receive funds from this foreign donor means they are they actually are wired into your foreign currency accounts so when you're adding your bank account ensure you add all the necessary bank accounts that you manage so that system would help you differentiate the local and foreign currency account that's when you add that means when you're adding these accounts ensure you um separate them by their currency so if i'm going to add a dom account system would then ask me to select the currency type of that account so you can either you can either be in your account narrow dollar or whatever currency you want to select so that's just the foundation of this ngo um there the quickbooks for ngu now we are moving ahead with the transaction parts now the transaction path for an ngo it's not that complex it's quite simple now let me just explain the system the whole workflow the whole workflow start from um receiving funds from a donor the questionnaire is a foreign donor or illegal donor is a foreign donor we receive the funds into our domiciliary account that's a foreign account if the local donor will receive it into our bank account now we receive those funds into our accounts now if it's a foreign donor we need to convert that foreign currency into our local currency so at that point exchange rate comes in so how do you move funds from your foreign currency accounts into your local currency account because you're not going to be spending naira in nigeria you're not going to be spending error here so you need to convert that dollar euro pounds or whatever currency into naira so that automatically requires an exchange rate so depending on the rate you're selling that's foreign currency you are expected to move the money from your foreign currency account to your narrative account then from your narrow accounts you are not expected to spend that money that's why you start incurring expenses and when you're spending that money you need to attach those spending those expenses to the relevant projects so you also recall that when we're adding don't know we're able to set up different projects that this uh donors are helping us to fund so when we're also incurring expenses to we need to be able to attach or categorize those expenses by project so that at the end of the day we can generate a project report like i said earlier when you receive funds from your donor you are not supposed to go back sit down and spend the money the way you like no because by by law you're required to be accountable you're supposed to submit a report back to that donor that report will detail out how those funds were spent with uh proof of those expenses so that in case you need more funds from this donor they would see you as a transparent organization that's why it's important for you to keep track of every spending as far as ngo is concerned so don't think that when you have an ngo and donors are sending money to you you can go back there and start spending money that's not true that's a deceit they can sue you for that so you're expected to fight you're supposed to send the report back to them on how those funds were spent and everything they would then compare the amount that was sent to you and most cases you're expected to spend everything because before you send in those fonts you're supposed to have done so i'm sending your request for donation you're supposed to have done your estimate very well so these are things we're going to be demonstrating in quick book so the first thing we're going to do is how do we receive funds from our donor to receive funds from the donor we're going to be using what i call the receipts section so we're going to be focusing on the receipt you don't use invoice because you're not um going to you're not going to record uh credit transaction here now even if those do not promise to to support your ngo and you want to track those promises you don't track them as invoice you track them with what uh you can probably use this as a pledge so it's like a quote so what this will help you to do is to track all the promises all the donors oh that was a limited promise to give us 50 billionaire we have not received the money but we want to track it so you use this uh quote here so i'm going to explain this later but let's first focus on the one that most ngo um uses that's uh the fact that they received the funds from donors i experienced to have sent a proposal requests so you go to your receipts now when you click on your receipts system will launch a sales receipt format we're not selling so this is not going to be a sales receipt for us so we need to change this sales receipt we can call it that donation pledge or contribution depending on the name so i'm going to i'll go to formatting custom data layouts they already tied to so i can call it um donation or let's just say receipts let's call it receipts or fund receipts let's just call you see depend on the name you want to call it um then this so too okay let's click ok to see what we have done so far okay this is it now this is so to here we're not selling anything so i want to change this so to to do no so i'll go back to custom data layouts and then i would change this to donut or it could be received from then you click ok now if you look at this you'll see screen and prints now screen and prints this tells us the um field you want to appear on screen and the ones you want to appear when you print it so that's what it means if i uncheck this it means that this font receipt will display on my screen but if i want to print it it shouldn't be there so that's what this means so whatever i want to preview on print you can see it here you won't find it so when i click here you can see font receipts okay let me uncheck here again you can see it's not there again font resets so that's what it means so it means that whenever i print this particular document depending on whether i check or i didn't check here this would either appear or not so the the date now the sales drama could be the reference number so i call it the reference number of that font in flow check number if it's check payment method due dates and every information you need i can see this is the project it related to a particular project so we click on ok so on this coulomb sections too we can do our customization i'm verify i'm referring to this column that we have here so i can as well check here on check sum so quantity giant quantity i don't need quantity when i'm receiving money do i need rates i don't need rates when i'm receiving money okay so this is fine fine fine fine okay so i'll click on ok so so i have it now so we are receiving donation let's assume we're receiving now go back to the uh setup we we did earlier in our first video i mentioned that when you're adding dunno these are different you know ensure you select the various currencies and these are the various currencies here now i'm going to demonstrate um two inflows here one will be local don't know second will be foreign donor now i ensure that when you're adding this doughnut you select their currency you can see here so if i had selected naira ngn as imf whenever i received the new show and i select imf system we assume that is a local don't know why because of the currency so ensure you select the relevant currency of that donor now if i select imf system would treat this as a foreign donor you can see this has changed to usd if i go back here and i select central banks committee because it has changed to naira so currency matters when you're setting up your donor except the ngo is limited to nigeria or is limited to that local environment then you can get your mind off currency but as long as you set up foreign local donor or you receive funds from both local and foreign donor you need to activate multiple currencies now we have added this now there's one thing remaining again how do we um raise funds how do we make money that's our source of ink flow as ngu so we need to add that to so you go to list item list why it's important is because whenever you are receiving fonts you need to tell the system the sources of that fund some could be from donation some could be for contribution some could be from grants depending so the type will be service as well we're not saying anything so this is donation and we're mapping it to let's say corporate contribution you click ok so if you want to add more you can add more you can say grants so you can add one called grant so all of this we call it grants now the accounts uh drop down you see there lets you track every inflow that comes from grants so let's see there's an account called grants so we don't have any grants here so can i say click enter grants set up income and then you click on save and close so this is grant you click on okay so let's work with donation and grant there could be other stories of income yeah now the reason we have to do that is when we come to item so what are they sending this money for what is what's what's that donation that we just received what's that font so that fund is a donation you sell because without this you can't save this transaction so description could be coping donation received from bankers committee now this is it then the class which is a location in abuja so if it's an ngo that has different branches or coverage in different regions the class helps you to track that so under the class you select the region which is abuja so we've selected that too now because this is not hello to a particular project so that's what we're living in but you look at it most of the times most of the times every font every donation that comes from a donor they are tailored to a particular project because you can't just receive funds like that without it being channeled to a particular project if you're going to be sending proposals to a donor you have to state the projects and you have to state the importance of that project so that's why we will likely be using a donor with a project so let's go for dangote limited which is children library so let's assume this particular fund is related to children's library so and it's do uh we're sending and we are receiving it from dangote limited when you select and go to limited you would be wrong why because you only selected do not you didn't uh categorize you didn't select the actual projects that font is tailored to so for you to sell for you to do that for you to correct it i mean you need to select what children library now children library is already a project under language so it doesn't matter if you don't select dangote because this is already so every transaction that passes through this children library is already taken as integrity projects or a project on that that go to limited so that's why you need to select children library so we said to the library receive from so you can then come here and say receive from download information you need so how much do we receive from them we received 4 million for 4.5 million naira so this is what you post so we just received 4.5 million naira now if there is a document if there is a receipt if there is a backup it source document to backup this claim or this posting you can as well you go to home you select attach file this attach file helps you to attach a document now assuming you have a physical uh document like um let's assume you run a normal business like you have a six receipt you have invoice you have check and all that so quickbook lets you attach a document to validate every posting and the other advantage is that it helps you keep your physical document in a format so if anything happens you can't find it again you can always refer back to this to download or print out so that's what this attach file is so you can attach document to backup this posting so we've done this posting with recorded you click save and close hold on now that we have click save and close the next thing is for us to receive history called deposits so we have saved and closed the next things you record deposit so you go to record deposits you select the bank so assuming okay this is the money you always check this when you want to record deposits you click ok so you select the bank deposit to let's say the money was paid into access back you select access bank you click on save and close now in most cases it doesn't make sense for you to say i have received payments and you are still going to record deposit again so it makes sense for you to select the bank where the money was paid into at one so i'm going to combine this record deposit and sales receipts together because when we receive the money the money goes into a default account called on the wizard font why because at the point of receiving this payment here we didn't select the bank here so we have to move the money from undeposited funds into the bank so let's correct that you go to edit preferences payments company preferences you can see use on the wizard fund as a default deposit to account no you uncheck then click on ok so let's allow this to be updated okay so if i go to my sales receipt now you will notice that on this phone's receipt i can you can see that was it so so which means i can as well select the bank where the money was paid into so that's it's easier for me so after this i don't have to go to deposit a record deposit again because this record deposit feature has not been activated or sales receipt so this is the first um demonstration of funds received from you don't know that's the local donor now let's go back to the same receipts this time we receive the money from a foreign donor so what i'm going to do you go to your donor unlike your customer so if it's coming from eu child education program you select this the currency automatically changes to euro you come here grants so you can say bing grants received from european union how much did you receive from europe you know 4 000 u.s 4000 euro and then let's assume this was in lagos i want to separate them because i won't get to report you appreciate the uh reports very well now the class 2 is in lagos now where was the money paid into you can't pay euro into a narrow account you can't pay your own dollar account you can only pay euro into your euro account so select first bank euro now this is the euro 4000 euro at what rates because i don't received the money let's say euro is 400 naira so you select 400 naira you then click on save and close so we received the euro into a euro account now to be sure what we have just posted i will go to my reports companies and financials balance sheets so you can see the euro account has been converted to naira you can see here means of 400 exchange rates and then you can also see what we have here so all your foreign currency account automatically converted to your home currency based on their exchange rates so we've received funds from donor the next thing now is how do we convert the funds from foreign currency accounts to a local account to convert the funds from foreign currency account to a local account you go to banking under banking you select transfer funds this transfer fund transfer fund from first bank euro to access bank naira now when you're doing this i assume that you've already sold the currency to appeal to change on cbs depending on the uh seller or the person that is buying the currency so if this is at 405 oh how much are we transferring we want to transfer 4 000 euros so you select your currency to be euro 4 000 euro into what the transparent one thousand sorry we're selling 4000 euro and then we want to deposit the money into our assets bank now this would be sold at the rate of 405. on this window again you have an option to click attach file which means that you can as well attached that document maybe you saw this in the bank or you showed it to cba and there was a document that was signed at the point of making at the point of concluding that transaction you can as well attach here so here you click save and close now if i go to banking use register let's check our first bank hero you can see here this is the money that looks this was the initial phone receipts from you eu uh europa you know and this is where we transfer the money to access bank and if i go to my assets bank to on that bank register you then see an error equivalent of that 4000 euro which is this so this is quite straightforward so i think um ngo it's one of the very one of the simple organizations you can set up people from but what i've demonstrated here i don't think there's any complex thing in ngo that we should find difficult to understand now we have moved from flawless phones in flow now the other part of phones influence like i said is what if there's a pledge you can use this to track all your pledge so you don't need invoice for ngo you don't need an invoice except the ngo runs a business except the ngo has another type of business entirely it may be a profit making business that they use to generate funds and then sometimes they sell to customers then that's what you use so which means you have to refer to the video on quickbooks for retail and manufacturing so if the ngo owns a profit making business maybe they buy a resale then you have to refer to that video to learn more on how to use invoice so but there's a number ngo that rely on donor for funding whatever whatever i'm explaining here it's enough for you to use then the experience side of this quickbooks how do you post expenses now that depends on whether it is cash or credit expenses for ngu you need to also know that expense is a major part of that of the operation because everything they do is all about spending spending spending spending they might receive money once in a year although it might be huge but the rest of the year would just be spending spending on different projects so when you're recording expenses for an ngo you need to know whether it's an expenses that's been incurred and not uh paid for or a cash expenses now experts have incurred our credit expenses okay let's use an example we have a project called um children library now we're building junior library we just hired a contractor to provide textbooks university press limited here um so as you want to track all the textbooks you can add them as an item you can add a textbook as an item so that will help you track how those textbooks are being used so let's try that you go to item add new no so you're going to use inventory parts so let me activate inventory pack exits preference item and inventory okay so you click on this so let's close this so okay so let me go back to the b so assuming we received a supply of um mcmillan facebook for instance from university in university express for our credits we didn't pay them i want to track that too so you go to item we're using using or using b is because it's a credit transaction any expenses that is yet to be paid for you use bill for that because you're not paying but you've incurred you've supplied is on credit so you need to track that on your system you go to item you click on new inventory parts so here this is mac minion that is books now do we have any store now why are we using sale we're not using sale because we want to sell we're only using sale because we want to save that inventory so that's why so we're not selling the inventory so we're not going to use this account so quantity on hand we don't have any in stock so this if the ngo has inventories that they manage so this is what you use to manage your inventory so you click on okay so assuming we ordered android million facebook at same 5000 each now the question now is this mcmillian that we are ordering in respect of what projects you can see customer which is a donor you can then select children library this is where that particular job comes in again so from the inflow we'll be able to map the inflow to children library now the ad flow which is expenses we are incurring you also need to mark tutorial library please for the system we then use to generate a project report that means if you want to generate a report for nuclear library looking at the inflow and the payments we can see whether we have access or deficits now the class which location is that abuja so this will help you to track all the inflows sorry all the expenses that you have been killed that's why you have amount due so it's an amount you have not paid it so just like saying that you run a business and you receive your goods income credit and you have to pay you need to record that credit transaction and this is what you would use beyond just credit what if the services render now for the supply of this uh hundred mark million we also paid a courier for delivery or we also incurred costs for career delivery or assuming they even helped us pay for the korea delivery we need to factor that in here you now come to expenses so let's say travel okay let me just say delivery costs which is on expenses now they're also charging us for delivery costs are the rates of 12 000 naira which will also be mapped to that children library location abuja this is it here now you will notice that i'm on checking billable now the reason i'm checking billable it's that you are not going to invoice i don't know for this now for a profit making business you might actually incur expenses that you need to invoice to a client a typical example you're on a shipping company you run a career company and you've incurred costs that need to be involved that means you need to invoice that expenses back to the clients that you're incurring that cost for if you've been traveling shipping shipping company might help their clients to pay custom charges tax and all that yeah and every day they're supposed to invoice that client for that expenses that's what we have believe so if i click unbelievable it means that whatever i cure i include here whatever expenses i include here whatever i paid i'm supposed to i'm supposed to generate invoice on this and then send back to the client so that's why i need to do this but for ngo we don't need that so here you can see total amount the 12 000 plus 500 will give you 500 so this is the amount payable to university press limited and a breakdown is that 100 um supply of material and textbook and 12 thousand error for career delivery then i'll click on save and close if they also send the document to us like an invoice we're gonna swear attach the file here always note that so you click on save and close so this explains that if we want to pay off all the expenses that we have incurred how do we do that go to pay views and go to pay b maybe we list out all the bills that are outstanding you can see we are only owing university price you check here five one two is it composed i will pay everything no 450 or to pay part of that money then you select the bank account from which the payments is made bank accounts the field may not be blank what field is system referred different okay so let it's me so check here 450 if you have multiple vendors you will display all the vendors here so we are paying for our assets bank then then click pay selected deals to every selected bills click on done and go back to pay bills again it will display the balance which is 62 000 naira so that's how to pay now what if the cash expenses that we're paying you go to write check this is not a credit transaction we want to pay cash at the point where the service is running that so the first thing you select is about your bank account pay to the order off so assuming we're paying you lose better for instance for maybe whatever service they are rendering or renovation expenses so if you come here so let's say it's office um let's say equipment renter are maintainers and we're paying their 50 000 naira now this is in respect of child education program and this especially it was incurred in legal so i'm trying to separate this from that so let's say this is start now the difference between this and entire bill is that entire bill is a credit transaction there is no actual cash movement we have not paid but our service has been rendered but on this we want to pay while after the service that means immediately after the result is rendered we are making that payment under that one you're not paying immediately maybe your payment could be after like a month two or there about so you can see the difference between the first one and the second one the first one is interview for credit transaction the second one is cash transaction which is what you have here so then you click on save and so i hope you understand how to post expenses now and also track um credits and cash expenses as far as ngo is concerned now the other part of uh use of this quickbooks for ngo basically is the banking site now because we activated multiple currency so you need to be able to understand uh phone transfer and i've demonstrated how to transfer fund between your local to foreign accounts now the same thing also applies if you want to fund your foreign accounts which are local bank accounts so all you need to do is go to banking select um fund transfer sorry this is a let's find transfer banking fund transfer so if you're going to fund your foreign account with the local bank all you need to do is select the local bank and then select the foreign so if i'm finding a usd account here so all i need to do is enter the currency so this this probably applies if you're buying um currency from um one of the beauty chains so don't always don't forget to that you need to also attach the documents here so if i'm gonna so i'll click on 50 000 naira so you can phone this with 5000 i'll enter five thousand dollars yeah so exchange rates 460. so what happened is that system would automatically notify the another equivalent of this five thousand dollars at 460 from your account and then increase this usd account by 5 000 us dollars so if i go to my banking use register first bank usd she considers the five thousand dollars here so that's a transfer fund outside of your banking then general part of your banking it's um let's look at a report called unrealized gain or loss now because you have a foreign bank account system will help you to generate a report called realized or unrealized gain so this realizes on realized game helps you check the effects of exchange frontation on your bank accounts now if you open an account let's assume that you put an account with gtb and deposited one thousand dollars in that account and that 100 was you paid 416 per dollar which is like 460 000 naira now if exchange rate increases to 500 it becomes unrealized gain because if you have to sell that particular dollar at 500 you you're going to realize that 500 000 which is higher than the 460 earlier paid for that same currency now why is it on real life because it's still subject to the rates because you have not withdraw the money from the account extremely could still go up or you could still come down so but the moment you sell or you withdraw your money from that account it moves to realize gain so on your last gain or loss helps you track the effect of extremely gain or loss why the realized gain helps you track the attract gain or loss on those accounts so that's what your lives are organized gain is so you need to know that so if i go to on your last game now still will ask me to update my exchange rate so if dollar let's let's uh go to um 20th of june and then and dollar euro 13th of june is 420 and dollar certainly is 520 for instance and i click on continue you can see here now so that is how the system checks so gain or loss so that's what you see here so what is the adjusted balance 152 was the current balance one five six what is adjustable on 28 what's the current balance so this is the effect so this tells you what the exchange rate gain or loss is on your account adjusted balance is 142 the current balance is so if this is higher than this then i have your gain if this is lower than this that's how you have your loss so that's what unrealized gain or loss does for you so always check on the last gain or loss to see the effects of the rates you're updating also as you update your exchange rate under managed currency here it also updates that on a lice gain or loss account so take note of that now the final part is reconciliation at the end of the month you are better to do your reconciliation it is very important because an ngo you take decision with what you have in your bank account so if what you have in your bank account doesn't correspond it's not corresponding with what you have in quickbooks you need to ensure that that account is reconciled or else it might affect decision making so to look inside your account you go to income side now before you reconcile ensure you have your bank statement with you your local bank statement and you're foreign currency bank statement so let's assume we want to reconcile our local bank statement the same strategy the same step also applies to all the bank so i'll use my assets bank so the question is how much do you have in that bank and set the close so let's see we're reconciling um at the end of may so how much do you have your bank account 31st of may you let's say we have 3 million now in that account then that same account add all the charges together in that month it goes to what called a bank service charge account so there's any bank service charge account here there's none so you type in bank service charge which is an expenses then the class that says abuja interest end one five every interest and on that account if there is any it goes to an interest income account so let's just say interest on short term abuja so what have we done here the actual amount in our bank statement in our bank account that's our entire not quick books we added all the dota fees that the bank is charging us sms atm and all the relevant fee it's an expenses we also added all the income in that account if there is any we we entered here then you click on continue so you begin to do your check now before you do your check this is first thing you look at our bank is telling us that we have 30 million on dots quickbook is saying that we have 6.9 million although so here's the difference now before we begin to look for this difference let's first take into account all the transactions we have in quickbooks on the bank now this is the paid checks and payments all the payments you have made these are deposit all the inflows in the account so you check this particular amount is in the bank's expense yes you tick you tick you tick this amount is in the bank statement yes you take yes you tick now you look at it that the actual balance we're looking for the actual difference you're looking for is seven million three one five thousand now quickbook is saying that we have ten point three bank is saying we have seven million so you have to let me know so let's assume at least seven million we actually use it to construct a classroom let's for instance so we've paid zeros budget seven million one thirty five thousand nine hundred so you come to banking rights check you want to write check of seven million three one five nine hundred so seven million three one five nine hundred our paying this morning to jules vega and let's see for the construction okay classroom you click enter set up this is going to be fixed assets and then we'll map it to a project called children that's a child education project then you click on save and close so what we're doing now is that particular expenses assuming the difference is z715 and it's in a bank statement or not in quickbooks so we've actually posted this in quickbooks but then you check this you then see that our bank balance is now 3 million which is same thing as quickbook balance so when you get to this stage where the difference is zero you can then click on the consign now so we've been able to reconcile our bank balance with quickbooks balance so generate your report you click on this so we have this so you can see here so this is a reconciliation reports missiles with what we have in the bank so this is how to reconcile your bank statement with quickbooks ensure you track all the transaction first check for bank balance check for bank service charge and interest income second begin to take all the influence into the bank like in quickbooks take all the outflows in the bank as also in quickbooks look at what you have in quickbooks and then begin to tick you there in the bank but then you're true with that you then check for the difference whatever the difference is post it in quickbooks and that reconcile the account the question is what if the difference is an unpresented check you've posted it in quickbooks and the bank is that you're listening to presentation something there's nothing you can do about it all you need to do is the idea of reconciliation isn't to always bring the difference between your quickbook balance and your bank balance to zero but ensure that you're able to treat the difference and know why they both accounts are not reconciling there is a major difference you reconcile it with something that you you you are you can you don't have control over just like this unprecedented check you can't go to the vendor to collect the check because you're concerned just make sure that your report is stated there and the difference between your bank balance and critical balance is an unprecedented check off and state today amounts so i think this um answers all our questions and then it's enlighten us to and then help us understand how to use quickbooks in an ngo so i think you need to watch this video over and over again to understand how this work but everything that ngo needs to manage the account as far as people is concerned are all this video and and i think you shouldn't have any challenge using quickbooks for an ng