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Cleaning invoice for NPOs

okay awesome um I'm going to go ahead and get started good morning and welcome to maynardson's non-profit education Series today is our session um is QuickBooks best practices for non-profits we're very happy to see you here a few housekeeping items um this session is being recorded everyone will be muted but if you have any questions please type them in the chat and we will have time at the end to answer your questions um due to some unforeseen circumstances our original speaker will not be here today however I would like to welcome Sarah Jennings and Courtney cultureborn to today's session both speakers have different levels of experience with QuickBooks um in regards to nonprofits and will bring a depth of knowledge to you today during your session today if you find that you're not getting what you need out of your QuickBooks product please reach out to us we may have a solution within QuickBooks to help you get what you need or our technology team does have many other solutions that may fit well with your organization and what you're looking to accomplish with that being said Sarah I will turn it over to you to start thank you so much Brandi and yes Courtney and I will um be excited to tag team today's presentation our roles are a little bit different I get into QuickBooks and I know what I want to look for and I know how I want it to function but I'm not usually the one that sets up that functionality so Courtney's on the other end of this of the spectrum and she can kind of do both she knows what it's supposed to do what it can do but she also can help us get everything um set up I um focus on nonprofits Courtney focuses in the for-profit arena so we wanted to make sure that we had both perspectives here um as Madison wasn't able to join us today so thank you for joining and we are excited to get started I will go ahead and share my screen here and you know maybe there we go we're just talking about how that needs to be a little bit smoother so um so QuickBooks best practices what we're going to look at today is we have a lot of clients that are looking at should we be on desktop or should we be online what on QuickBooks Online what's right for us and what are the pros and cons for each so we'll go over some of those things and then we'll get into the best practices through configure configuration and maintenance how we need to make sure everything's set up the right way in order to process it effectively processing best practices within the transactions within report record keeping how we see non-profits in particular doing great jobs reporting what are you reporting how are you doing that in a streamlined fashion and then we certainly want to make sure that we're talking about some third-party applications and how those can integrate in and that as Brandy said earlier we'll we'll definitely have time for questions at the end if you have any um Courtney is going to monitor that chat throughout so if you have any questions put them in there um she'll do a great job if there's anything that we need to say out loud we can do do that but also she can respond as we go so first again we're looking at the pros and cons of QuickBooks um desktop versus online we'll start with with desktop I know I get a lot of questions from clients and they're asking for why why should we go it's so from desktop to QuickBook to online pardon me um there's a lot of concern that there's a lot of change it doesn't have the same functionality so really it's important to look at what are the pros desktop it doesn't require internet connection so if you work frequently with unstable internet desktop might be the way to go you're not going to have that fluctuation and how it's connecting to things there's less frequent billing you can pay a whole year in advance and just pay for your your subscription as opposed to the monthly um the monthly subscription that QuickBooks Online usually is set up to do and quite honestly if you decide not to update your QuickBooks version which we don't recommend but if you decide not to do that um you don't have to do that because you have the static desktop version version we absolutely recommend that you do that at least every three years every single year if you're using any of the payroll applications you need to do that but for just the standard QuickBooks desktop um I would not go beyond three years in your version um and then desktop does have some more complex reporting abilities I think one of the that's probably the single most thing thing that people are looking for in QuickBooks online that they miss from QuickBooks desktop is just some of the reporting capabilities um part of it is just you have to change the way you're looking at things it's going to look a little bit different but um for the most part we can get all of that information out some of the cons you have to do manual updates so if you um if you have QuickBooks desktop again it's not automatically syncing all the time to back to Intuit so those are manual manual backups because it's not connected to the cloud so you have to make sure that you're doing those backups on a regular basis same as you would for any of your server files Bank connectivity is um some sometimes a little bit more difficult in QuickBooks desktop than online and then loss of support this really just really is the reason that we say don't go more than three years if you start to do that you're not going to have support over your product and your licenses when we're looking at QuickBooks Online some of the pros it's cloud-based like we talked about earlier so you can access it from Australia you can access it from the beach you can access it from your cabin up north if you want to you're not tied to you can access it from your phone you're not tagged quite so much to your desktop or your laptop computer that it was loaded onto automatic updates like any software and most more and more software software applications are moving towards the cloud because when they find things that need to be updated within the application they're able to do that automatically and you don't they don't have to send it out and then you shut down your office so that you can do do the updates it's automatic and streamlined transaction downloading is really really streamlined there's a lot more um things that collaborate with QuickBooks Online than they do the desktop version again because of the open API in the cloud access and collaboration again a lot of that is because you can be anywhere anytime I don't know if that's a pro or a con but you can be on vacation on the on the beach and still access your QuickBooks file but um we should probably should have put that in the con con column also um and then monthly subscription so you don't have that one big hit of of your annual subscription fee um it's a monthly smaller subscription that you can put in there the cons it requires internet access so um if you are very very remote and you don't have a consistent internet connection it it struggles clearly it's not going to be ideal it'll slow down the system just like any of your other online applications it's not as industry specific so there aren't as many options with the QuickBooks Online as there are in desktop getting it for construction or things like that there are some things that we'll look at in the configure configuration to make sure that you're getting the non-profit industry specific verbiage at least and some of the custom in some of the fields it lacks some job costing abilities I don't know if that applies to most of our non-profits um and then again it does have some limitations on the on the reporting a lot of that though we are there are applications that you can utilize that we'll talk about in a moment um to make the reporting a little bit more robust so that you can get what you want out of the out of the system so when you're considering this transition again you you definitely need to as a team not just the accounting team but the leadership team the department heads or program directors make sure that you're looking at all of those those pros and cons so that everything is considered once you decide we're going to go to QuickBooks Online you prepare the desktop file for conversion it's really really a simple process you export the files to QuickBooks online and then you access it it it's three steps very very um short process uh probably under an hour in most cases there are some things that we recommend that you do prior to um that conversion just to make sure that it does go smoothly um we definitely recommend that you go through all of your customers your vendors your chart of accounts make them inactive just clean things up a little bit before you do that you don't the data will all come over to QuickBooks online so that's not a concern at all it's just how quickly it does it so we want to make sure that it's as clean as possible when you do that conversion so you're starting with a clean slate so what comes in there active data comes in inactive items again when you're looking through your vendor and your customer list you're not getting rid of them you're just inactivating them so that it comes over a bit more streamlined employees will come over the chart of a council come over sales tax payroll status all of your memorized transactions will come over automatically when you do that conversion QuickBooks isn't is um it isn't stupid clearly they're going to make it easy for that for you to go to one of their products to another one of their products um so we haven't seen too many and I think Courtney would agree too many issues um certainly on that previous slide we said one of the big things to do at the end is just compare the data make sure that there isn't it isn't any data loss in that conversion but I haven't seen where that has been an issue all right all right so we went through the pros and the cons most of what we'll talk about today is focused in QuickBooks Online um with all of our client base I think that's predominantly where we're seeing people move to if they're not there already throughout the pandemic it really showed people the importance of um having access all the time anywhere the flexibility that team members are requesting and requiring really um is is moving people to the to Cloud versions of all accounting softwares but uh most of the things that we'll talk about apply to QuickBooks desktop as well so if you have any questions specifically about a desktop version please don't hesitate to put that in the chat and we will address it so first when you um go in here there's a couple different things that we want to make sure again earlier we said the through the pros and the cons there are some things that you can't do with QuickBooks online that you can um customize or modify with QuickBooks desktop or have different industry specific things but not all there are some things that we see a lot of organizations they don't pay attention to a lot of nonprofits so it still comes up that it's your balance sheet for example that's a kind of a silly one we all know the balance sheet is the statement of financial position and and vice versa but when you're reporting to your board and we when you're reporting to your leadership team or your funders you want to make sure that you're using the right verbiage it just streamlines things so if you go to that little gear icon in your QuickBooks online version and go to this account settings when you come in here there's a couple different areas so if you come up to this company you'll be able to see what type of company you are in this is important to fill out because all of these this company type and the tax form it starts to feed some of the verbiage throughout the rest of the um application so you want to make sure that you're putting that information in here the other thing that's important to um to look at is the addresses that you have in here so you have addresses that can be your company address often or your organization address oftentimes that's the same across the board but sometimes you may have a different address that's donor facing you maybe have a management company or somebody that's taking your deposits or somebody that a board member that is the company address kind of the holder but that's not what you want your donors to see so that's just something to consider when you're going through things the other thing that is important to take a look at is all of the access that you have within the usage limits so that is going to be down on the third bullet point in the left left hand side of your screen is the uses usage limit part of me so it goes through your billable users your chart of accounts your classes and locations there's all sorts of accessibility and things that you have access to oftentimes when we see people have frustrations or they think that there's limitations it's just because they don't know so definitely explore that little gear icon before you get too frustrated with the reporting and the capabilities of things absolutely um on the usage limits I know so many people um get kind of nervous when they see that their package might have a limit of 250 accounts in the chart of accounts I did just want to note if you come from desktop 2 online any accounts you have set up in desktop before the transcript don't count towards that 250 account limits so if you currently have 300 accounts when you go to online it'll say you have zero accounts towards that limit so I just wanted to throw that out there in case that's a concern that is a really great point so just new accounts created once you're already in the online version that is a really great Point thank you the next thing to look at is the the again these are configuration settings that we consider best practices so that you're communicating the right thing so when you're looking at this form you always go to this customize tab customize the look and feel of how your invoices how your donor requests your statements and things look to your to your um donor facing your member facing folks make sure that you're going through and customizing these things the other thing that um we want to make sure that you look at within the account settings is is the advanced options again make sure that you've got the right the appropriate fiscal year you've got your accounting method whether your cash or accrual whether or not you're closing the books we definitely recommend it's a good practice to close the books at least at your end so that you don't have a lot of changes in previous years this is where you'll go through the tax form all of those things the other thing that's important on this Advanced tab that we see people Miss occasionally is this automation area so there's some defaults that are going to come over for you but make sure you take a look at this because you do generally want um into it to in insert previously entered content again this is where we start talking about artificial intelligence and trying to streamline automate things we want to make sure that the system's working for us not against us automatically applied credits any of these things can be overridden if you decide for this vendor this customer or member or donor that you don't want it to apply a credit or something you can always um reverse that or you can always override that but we want it to automatically prompt you automatically apply bill payments things like that again just some settings that you want to make sure that you're taking a look at the other preferences just to make sure again you're looking at that our best practices we like it to see that you're being warned if a duplicate check number is issued we don't recommend re-doing check numbers it's not something any of your Auditors are going to like um warn me if you enter or need the user if you enter a bill number that's already been used for a vendor this is a good thing to actually turn on that way it helps you know if if you're doing getting a duplicate vendor from our invoice pardon me from a vendor so if Joe's um catering send you an invoice and you didn't pay it but they sent it again because it was just some timing difference of when they actually received that payment you want the system to tell you hey I think we have that bill in here already um Warren if a duplicate Journal number is used again all of these things we recommend these are on not off all of them we want to be on the next thing we want to make sure that you take a look at is your chart of accounts again when you're converting over to QuickBooks Online we want to make sure that you're cleaning things up as much as possible this in this chart of accounts area which you can get to a couple different ways you can either get to it from this accounting on the left hand side there's this accounting button that you can go to to see the chart of accounts or you can actually get to it through lists and that gear icon again but this is where you want to make sure that you're taking a look at the at your accounts that you're going through and you're making sure that you um know that they are in the right bucket that they are active so you're using all of the things that you that you want once you're in this chart of accounts you can just go over to the right hand side and make it inactive if you hadn't done that in the past or you can edit that chart that account number if you're editing it things that you're looking for are making sure again it's in the right bucket this information on this screen is what drives your financial report so it's really critical to make sure in that configuration and how you're setting things up that it's in the right buckets that's that's how you make your reports come out how you want to see them and how your um how your leadership wants to seem and how your board ultimately wants to see them foreign again if you um the name records must oh when you're merging records I'm sorry about the title sky so the other thing that we want to make sure we talked about cleaning up vendor records and customer records prior to converting if you've already converted or if you've been in QuickBooks Online for quite some time it's really important to maintain a clean database this helps for all of the usage requirements but it also helps just for clean accounting I mean best practices are you don't have multiple different vendors or customers with the same name unless there's a logical like a necessary reason for that I'll tell you from a internal control a fraud examination practice if there's multiple duplicate vendors for example that's always a red flag we always look at those areas because there's there there are some reasons that that makes sense but there's not tons of reasons that that makes sense so things that you do when you're trying to clean them up you look at those duplicate vendors or customers it works the same either way and you can merge the records together so you don't you don't lose all of that history the names must match exactly so if you need to modify one of those name prior to this merging you can do that again it retains all of the transactions so you don't lose any of that history you can also go through and inactivate customers and vendors we definitely recommend you do that probably every year at least to make sure that you're maintaining a clean database it just makes things run smoother it reduces errors if you have vendors in there that you haven't used in five years there's always a risk that somebody's accidentally going to pick that vendor or some customers inadvertently going to get selected if it's inactive you always have the option to activate that again that vendor again and you'll get prompted for that if you start to enter in a new vendor that you had in the past QuickBooks will prompt you to say hey this was in here do you want to reactivate that vendor or customer so again you can also delete things but that'll delete the transaction history that's not something we want to do so just make sure that we're using the inactive and keeping our database clean so now that we have looked at the best practices for configuration and for maintaining a clean database and a clean clean accounting system we'll look at some of the processing best practices so first we'll look at receiving payment so when we are getting payments from our donors or our members we always recommend that you're you're receiving payment if sales receipts aren't used the payment should be tied to an invoice or a pledge or something like that um that's outstanding the best practice is when this is received you're putting it into the undeposited funds account this is an area that I think importantly if you see anything different let me know but I see a lot of organizations just deposit it right to cash and it makes the bank bank reconciliation process a bit more difficult it's just more cumbersome because you usually will have some side schedule that you're trying to highlight your bank statement and figure out how which checks or which deposits um I'll go to one deposit on the bank statement looking at QuickBooks and it it really becomes a very very some funky and a bit messy so this allows you to lump together the pain the deposits like all of the checks all of the cash all of the donate Nations or member payments into one so that your cash account in what your bank reconciliation says is exactly what the bank's statement says it really just cleans it up if you've got some board members a Treasurer perhaps or leadership that's reviewing your bank bank reconciliation which frequently is an audit recommendation it really helps them as well in that review process there's less questions again it's just making sure that we're maintaining a clean um a clean accounting system the next thing on the disbursement side that we wanted to look at is paying bills so there's two different ways and I think we see often that people get confused on what is a bill what is a check I'm writing a check but do I have to have a bill all of those things so a bill it was what you enter when you get an invoice from one of your vendors so there's they're giving you an invoice they have an invoice date on it it allows you to keep track of what you owe oftentimes we see people have a file folder with all of their bills in it and they don't actually enter it until they're writing that check that really really causes a lot of extra work because I've seen clients and they literally will go through their file folder on a weekly or bi-weekly basis to see okay what's due instead of just put them in the system and it spits out a report for you that says this is what to do this week it really streamlines that process it allows you to report to leadership report to your board this is what we we owe everything that we owe and it's not a separate schedule once you have it in as a bill then you're making a bill payment instead of just issuing a check it allows you to have better accrual accounting so things are recorded in the appropriate period you've got things if you haven't expense that it that's attributable to an event that you held last month it's going to the expense because the bill date will be last month the expense is going to be last month so it all aligns a bit better it really helps for more accurate financial reporting a check on the other hand if you are a completely Cash basis you don't have a ton of activity you can use checks for sure or if it's just something that you you have to pay the caterer a check today and you're just writing it they didn't even give you an invoice which is not best practice and we wouldn't recommend but if that happens then you just write the check it pay um you pay it now there's less entry because it's one time that you're touching that transaction again best practices we would absolutely recommend that you stick with bill payments so that you can have that accurate financial reporting accrual accounting and it really helps reflect the financial activities a bit better the next thing that we see oftentimes people not take advantage of is the bank feeds QuickBooks Online it connects to the bank's website so you don't have all of the extra data entry for deposits or for checks written or for transfers made or if you're getting in a bunch of credit credit card payments from emergent service for dues transactions whatever that might be what it does is it automatically presents you with these transactions to be coded part of the automation process within QuickBooks is it it guesses because you train it over time to guess appropriately and correctly but it guesses how to code those transactions as well and then the reconciliation process is more matching than doing data entry throughout the month or at month end it really really saves a lot of time and it allows for more accurate reconciliation as well within the bank feed another question we often get is can I only attach One bank account or can I do multiple you can have multiple different accounts um you can always you can see up here on the screen there's a checking a savings and then it also even has a MasterCard you can you can connect the bank feeds to your credit card system so you're also not manually entering in all of the credit card transactions which is definitely a headache for many people so these are three things best practices absolutely we would say you should look into take advantage of us if possible and as it shows on the screen there's always Four review categorized and excluded so every time you're presented with these transactions occasionally it you will have already entered the transaction so you don't want it duplicated you can exclude the bank feed one and it shows you what you've already categorized what you've already reviewed um and again it it really I'm gonna call it a robot but it's really that automation that presenting you with transactions to review is opposed to your team having to do any data entry in that it really saves a lot of time when you're looking at the transactions for review you're again you're confirming them so QuickBooks tries to match it up for you and again it isn't always right but you train it just like any robot any pet any anything um it learns over time what is supposed to be matched together so it's really really helpful um to look for the match it you have these options that you can confirm if it's the right or you can look for other matches again it it's more and more streamlined the more you use it so please just don't get frustrated after the first month we've certainly seen people because it's just a different process make sure that you give it a couple months to get used to when you're looking at it you have the option if it doesn't come over in the bank feed with the vendor you can fill all of this information in right there and then match it up you can see down here you can create the rules so that you can make sure that it isn't um a one and done sort of a thing you can say everything single time we get something from in this transaction is Hicks Hardware we're always going to categorize it here it's always going to go to this class this is how we want to do it and it'll do it that way forevermore very very helpful to streamline things and save some time in the accounting team when you're looking at um the transactions as well you can always undo anything that you've done you can exclude or put things here you can always move back again as we said but this is where if it's something that was already recorded you just exclude it and then it's not included on your bank reconciliation process the bank rules we talked about a little bit already you can get to the screen from from the um that screen I just showed a little bit ago that had the matching options so when you go in here you can say every single time money comes into this bank account it does X if it's a transfer or whatever it might be this is something again it takes a little bit of time to do the setup early on and we see a lot of people not take time because we're all trying to get through the day we're all trying to get all of our tasks done for the day it's really going to save you time in the long run if you look at this functionality the receipts is another thing that I personally actually haven't haven't used much of but I know Courtney has and it's really really helpful for those who are um getting receipts from employees a great example is credit card receipts so you have a credit card that you're trying to I'm sure this doesn't happen in any of your organizations but you're trying to herd cats get receipts for all of the credit card transactions so the auditor doesn't have any questions everything's aligned um oftentimes I see it in a separate file there's a file folder with a bunch of crinkled up receipts in there this allows you to upload it from a computer the scanned images it allows you to upload it from Google Drive or you can email it directly to um directly to the account it's very very easy it's very user friendly I'm not sure how old this is I think it's one of the newer features um to QuickBooks online but it really really saves a lot of time when you're trying to match up those expenditures is there anything Hangouts Courtney that you had on that one since I haven't used it too much no but all right bank reconciliations one thing that we see frequently is people do them outside of the system we talked a lot early on about why it's important or how we can streamline things once you get to this step always do it in the system it reduces the external reconciliation and you can also view your history as well goes through a little bit on how to do it QuickBooks tries to be as user friendly as possible and tells you hey you're not really reconciled we're not going to let you hit that button so make sure that you're paying attention to the system the other thing we want to make sure nonprofits utilize is budgets within QuickBooks so oftentimes there's a budget spreadsheet put it right into QuickBooks QuickBooks Online as well as desktop has the functionality you can put it into the system by program by Department by whatever you might have you can put in the fiscal year or you can have different budgeteds we really really recommend that you use this it allows you to have streamline reporting at the end of the month or the end of the um Grant period whatever you might have you can go in we just have a little bit of information and all these slides will be available to you about how to edit your budget once you get it in there sometimes instead of editing we would recommend if it's a formal Amendment to the budget you can just increase create a new budget to put in there so you have that historical record but if there's just some tweaks to the budget as you're going through the initial process you certainly can come in here and do it within the system so the reporting that you have after that we'll talk about a little bit in the financial report but budget overview report and budget to actual report these are canned reports directly out of QuickBooks Online desktop has the same thing the other thing that we recommend I have said a couple times is classes in order to organize process and Report things we want to make sure that if there is anything that you want to look at a statement of activities for whether it's a grant or a program or an event that you might host you're utilizing the classes not just expanding your chart of accounts I'm happy to answer questions that honestly could be a whole hour conversation with any client because there's just a lot of options that you've got there reporting best practices and we're getting towards the end reporting best practices we want to make sure that you're looking at the standard reports there's standard custom and management reports so you can always put a little star on things it brings it up to your favorites it just saves some time so that you don't have to go looking for it all the time when you look at the custom reports you can go to the customize button within each of the standard reports and you can tell it you always want it to be month to date or you always want it to be this transaction you always want it to include certain columns if you will all of those things will save once you customize or it gives you the option rather to save that once you customize those reports that'll be under this tab management reports are packages so that at the end of every month if you have the same exact reports that you are giving to your leadership team or your board which you should have the same exact reports every single month or quarter um you can have that package already set in there so when you tell it to run it'll run and pull those exact reports that you've customized Again part of this is just best practices how do we streamline things to make sure that you're saving time your team saving time and your leadership and Board gets consistent reporting the last thing that we've got here is third party applications and this I think people really are um starting to we're starting to gain some traction so if you go on the left hand side within QuickBooks online and again this is one of the differences between online and desktop there's more functionality I think with these applications and online than there is in desktop that doesn't mean that it doesn't exist in desktop there sometimes is just a couple more steps because it's not automatically connected to the internet necessarily so on online you just go to this apps and I don't have a screen of all of the different apps that are there but they are abundant I I would recommend if there's anything that you are looking at that you are doing data entry or you're looking for a workflow a good one is the accounts payable process if you have invoices that you're routing through your office or you're scanning in over here and you're sending emails for approvals there's an app for that right I mean there are things that connect directly to your quick your current QuickBooks account so they talk to each other you're not duplicating your data entry another thing to think about when you're looking at these third-party applications is membership databases and crms if you've got AMS systems and things like that that are recording all of your revenue or your your receipts when your members pay or your credit card transactions make them talk to each other it's incredibly important because nobody has time this day and age any day and age to enter a transaction twice we want to make sure that we're minimizing how many touches they have if you don't find what you need within that system within the apps that are already there and I know we just have a couple minutes left I see Brandy popped on but if there is that then there is another application that you can utilize it's called transaction Pro we've started using this more in the last couple years just because again QuickBooks all the apps that they have built out they have an abundance so they do have quite the variety but it's not everything so there are some times that we have to import something to for payroll for example if we've got extensive payroll allocations transaction Pro allows us some additional import capability that QuickBooks Online just doesn't have um so if there's anything that your team or your accounting your accounting team looks at and they feel like they're doing multiple duplicate data entry please let us know we'd love to have a conversation and see if there's either an application or potentially this transaction Pro can help all right are there any questions it looks like I think I'll stop screen share so that you can see us all and we can take some questions here um actually yeah Courtney did a great job of answering most of the questions right through the chat um today so thank you Courtney for doing that um live throughout the throughout the webinar um so for the sake of time um I want to thank Sarah and Courtney for presenting today and thank everybody for joining us um tomorrow we will email out a recording of this presentation and contact information will also be in that email if you have any additional questions you can feel free to reach out next month uh pretty excited we have a guest speaker helping us navigate the rules of charitable gaming and Raffles and all the rules that revolve around holding these types of activities and events so we're hoping that you will register for that event next month in May and I hope you all have a great rest of your day