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Musician invoice template for non-profit organizations

it's Wednesday our favorite day welcome to the chamber show coming soon to a YouTube near you no the chamber Show's already on YouTube I'll share the link today it is it is but within a framework right good afternoon everybody how's everyone doing we're almost done with July is everyone surviving we got quite the quiet audience today but I see them all good afternoon oh thank you good afternoon you guys are looking beautiful today you know from here laughs we'll get started a few minutes after nice to see some of your faces again I love the repeating faces sorry I think we need some elevator music or something right now I know I would Terry I was literally just thinking that we're gonna Implement that next week client feedback elevator music but it's going to be good elevator music not the crap you really hear in the elevators well we're going to start taking music requests too I love that plan yeah it's a little like uh there's no dogs in the background I don't have trucks going by uh it's quite quiet today and we've got quite the quiet group so hopefully we'll wake everybody up with some Finance stuff I guess usually I'm quite the chatterbox too but it's definitely a Wednesday I think we're all feeling this week's Wednesday maybe like the wave station in the background or something I know um I can do I can do uh [Laughter] everyone's gonna leave as soon as I start seeing or maybe let's talk about some wins like I know you posted yeah I like that delicious okay we've got we've got a client that in the past month got awarded Soleil of the community she's not on here today but if y'all check her out soleilofthecommunity.org thank you Nakaya that's a good one ninety thousand dollar Grant and a couple weeks later yesterday just got a 19 000 Grant that's a good win anybody else have some major wins I love that duh of course the wins I have a win on one of my for-profit businesses that are that's employee owned yeah um we've always had a contract with the city um and they use they've used us sparingly uh not really since 2020 and then 21 22 they you know didn't really use us they just sent over a huge project and because we operating so full transparency twenty six thousand dollars and because again that we operate so lean and we weren't expecting this project the minute that invoice is paid I I can split it with my partners so I'm really excited about that because this is like our two-year anniversary for this business and I'm big on either employee ownership or employees being able to have Equity or profit distribution and I don't know I just know what that type of money means to them you know what I mean and so yeah I'm just I just pray the business continues to grow I love that oh that would be a good share on like money Monday yeah that's awesome congratulations Amber thank you it literally just came in that's ooh I like that oh okay this is perfect to kick us off okay y'all welcome to Wednesday lunch and learn with chamber Amber and Sharon I don't know if some of you have read the uh newsletters that come out but Queen Josie on here is killing it with the financial jokes um I did put one of them up here on the power oh maybe I did and I saved it for that so in the newsletters we try and put in some funnies to help make topics that are so what really fun and hilarious so we're coming at you with financial statements today um we want to help you be empowered Financial leaders of your nonprofit organization your business entities not going to function without understanding your financial health so we really want to dive into that today we're going to use a client of ours education is key as an example um she has graciously given us permission to show all her business so we'll dive into her QuickBooks today and go through that and look at some really healthy financial statements and what it's like to clean up your QuickBooks so that you can get financial statements that give you the information that you need to make decisions so we're going to kind of dive into that Amber you already all of you know is the badass Financial Queen so she's really going to take us on the journey through these uh financial statements and through QuickBooks so financial statements these showcase your non-profit and they showcase how your organizational's financial performance is this is really critical for Grant applications for donors for funders for transparency especially your fiscal health I'm going to say that like 20 times because we love redundant communication around here we love redundancy of critical components that are really important so that you guys can have a thriving and sustainable non-profit organization so having good financials clean QuickBooks or whatever software that you guys use even if you're using Excel to sort of manage your finances now really important so before we really dive in do I have any questions for Amber and I uh before we really we're going to dive in pretty hard into the financial statements any quick quick questions before we go everyone's kind of ready to see these financial statements hi rice hey Sharon how are you good how are you doing thanks for joining us today I'm excited to be here I look forward to uh learning we should have taken your financials and used you as an example next time maybe next time okay all right so we're ready to dive in you guys know we keep this informal so if you do have questions that come up during our session today put it in the chat or raise a hand Josie is monitoring the chat box Amber and I are here too so we'll keep an eye on that but ask away we like to keep the dialogue going Amber the floor is yours thank you so we really dove into the budget template last week and we even did a real life scenario um with one of the attendees where we plugged in her numbers so just real quick to give us um an idea how many of you were not here last week okay let me scroll through all right very good and the other thing too is remember some of this stuff you know we don't know where you're at with your overall understanding of financials um but as Sharon said the magic is really in the basics so the fact that we are going to take another look at this again and re-explain and continue to introduce these Concepts I think it just makes us all better um even Sharon and I when we work together prepping these things we continuously learn um and are also reminded of things that then allow us to be better you know in the businesses that we run in our consulting services so it's kind of like dance you know ballet beginning um making sure that you know you continue to build upon that technique if you will so with that said Sharon and I created this budget template and for those of you who are not here last year you will be getting the download this week after the meeting and we set it up in a way that is quite inviting um by the eye is somewhat understandable and you will quickly see that it ties directly into the behind the scenes of QuickBooks and will take you successfully all the way to the end for your 990 filing for your non-profit organization the budget template is actually for those of you in the profit world what we call a profit and loss statement and in the non-profit world we call it uh the statement of activities but at the end of the day anybody who is running a non-profit we know that truthfully behind the scenes though they're not paying taxes on the profit if you will any type of profit that a non-profit retains and of course it's a different word being used right gives them the ability to have a larger impact for their mission so you'll notice that this budget template is color coordinated and that's intentional because not only does it tie in with the basics for Gap accounting practices again taking you all the way through to the more formal documents that your non-profit will have to be filing but it also sets you up for success and keeps your spending percentages top of mind so when it comes time to report all of these figures to either guide star or charity Navigator you understand exactly where you're at and how potentially you will be graded and or viewed not only by formal organizations but also by the communities that you serve so I use some examples last week um you know that are very that we can all relate to quite relatable right that at the end of the day you know I used weddings and family reunions for example that you are doing these types of events right to honor your community so they're not meant to be for-profit so I like to use that example for people to wrap their heads around how special events or fundraisers or non-profits operate as a whole and so obviously you're bringing people into your community into your mission but of course there are costs whether it be simple things like chairs tablecloths um centerpieces even just simple advertising uh thank you Awards if you're honoring somebody or what have you all of that has costs and they add up quickly so when you're doing say a fundraiser A Gala or a special event it is very easy to burn through those funds and of course if you're not creative if you're not getting in-kind donations if you're not able to secure additional support from supporters then of course that money is an expense against the program or the special event so not only is it your job as the founder of your non-profit to run the non-profit responsibly and adhere to all of the you know fiscal guidelines but you also have to put on your creative relationship building think outside the box hat because it's your job to protect these Monies you know in every way that you can the colors the two colors that are under most scrutiny and so let's just get them out of the way it are the red and the orange why because when your non-profit becomes successful and you're dealing with lots of money these are the areas that can get abused if you will okay and if you've ever in the middle of the night gone on guidestar charity Navigator and looked up some of your absolute favorite or largest non-profits and you take a look at the compensation of officers directors or other salaries or wages or advertising budgets or Consulting budgets or production budgets your mind will be blown because all of this is reported and transparent on the 990 IRS form and so it's all sectioned off we'll do that on one lunch and learn because it is incredibly fascinating and recently I was showing Sharon an example that I ran across huge they're dealing with 9 million a year you know and we get down to the bottom and when it gets to the individual amounts that they've given to individuals for their cause or Mission it was you know it was like 52 times 2500 distribution and I'm like only 52 people like this is a national thing you know and we're talking about millions of dollars now again I'm not the operator of this organization I don't know how creative or you know all of the levers that they've pulled to be great we understand that cost of business is expensive and frankly pasta business is expensive just to run our households so we're sensitive to that but what we did Define last week too is that non-profits are expected to operate at a 70 percent profit margin okay that's crazy your your your best businesses in the U.S don't operate at 70 profit margins so the expectation for a non-profit to do so really means that the operator of the non-profit needs to be excellent so when we when we share this with you when we teach it conceptually we teach it with that level of expectation knowing that this is five-star expectation okay also we understand that what is in yellow is basically operations fixed expenses headquarters okay so I just want you to think of yellow as headquarters it's what keeps the machine running whether there's a Gala or not whether there's a fundraising event or not whether there's a special program you're executing or not so yellow is day-to-day operations headquarters green are your special programs and services the green area is the area that they want they the powers that be they want to be at 70 percent because that is your mission so when you start your non-profit with Sharon in the non-profit plug and you define your mission at that point you will be planning in your head the green area and the goal is for that green area to be 70 of the money that you bring in so I hope that kind of simplifies this as far as how we're prioritizing the different categories um Sharon do you want me to go any deeper than that or can we tie stuff in with the chart of accounts and stuff on the other side I think that was perfect that was a great recap of last week's um budget overview which you guys if you're in our private Facebook group there is a recording of last week's budget training and the this template that we created you guys can download in Excel is in our private Facebook group so if you're not in our private Facebook group be sure to reach out to us find my name on Facebook you can join our private Facebook group that way um so that way you have this as a template to start with but Amber that was perfect before I really move us to the next section and we dive into the financial statements and QuickBooks do we have any questions from anybody I'm going to implement the music for the um whole time so we're waiting for people to Terry with the win on the recommendation for the music I promise next week Terry you better be on next week so I can show you I did it okay okay guys so next is a chart of accounts right and so this is when we start to get technical please note that I am self-taught in this area and obviously over the years I've gotten more formal credentials but I want you to know that the magic happens and the understanding of chart of accounts and adhering to the chart of accounts and obviously there are multiple layers but I want you to understand that this is what is important okay and at the very least you have to start wrapping your head around for sure income and expenses that's key and then depending on how complex your organization gets assets liability and then again depending on what you're managing Equity okay the two main financial statements that everybody should be aware of not just for non-profits but that literally govern our everyday lives okay is going to be your income statement and your balance sheet or in the non-profit of world statement of activities and your balance sheet okay and again the reason that you should adopt and love this is because these two financial statements govern our entire lives whether we know it or not whether we're applying for college grants whether we're applying for mortgages Etc when you're on those websites and you're entering that information on the back and it's literally going to an income statement and a balance sheet that that governing body and this is for child support alimony and all types of stuff so you know I'm well versed in the on the court side as well and you would be shocked that when you sit and look at said documents how they literally line up with the fabulous color-coded budget that we gave you the chart of accounts that we're about to have a deep conversation in and then when we hop into QuickBooks how you can see what happens from a cookie cutter standpoint how you customize it and then the fabulous options at QuickBooks now offers us that kind of guide us to be able to tie it in to tax returns so that's something new that didn't exist many years ago I mean literally you are set up for Success if you want it but you have to want it and as you can see I come at it from an educator and from a practitioner I'm still very hands on with what I do because another fun tip is that we rely so heavily on the accounting professionals right we think that they are going to be the Saving Grace for our entities that is not a true statement you can check out my LinkedIn post today because if you've ever taken the time to read your tax return you clearly sign stating that you agree that everything on the return is true and correct and that the paid preparer is just that a paid preparer who was given information from you the responsible party who operated this entity you the responsible party are responsible at the end of the day to operate your entity it is your responsibility to understand best practices it is your responsibility to understand the Internal Revenue code it is your responsibility to understand commingling it is your responsibility to understand abuse of power if you have profit and non-profit and what that looks like it is your responsibility they don't care how much you're paying your accounting team your controller your CPA whatever it clearly states on that last document annual document you are signing that you are the responsible party so I teach in a way that implores that um responsibility okay and so that's why I'm so passionate about this because you're the one left holding the bag good or bad so I want you to be prepared so there you are you have your non-profit you have signed up for QuickBooks you're about to make magic happen you've done your budget either on the spreadsheet or on a yellow piece of paper okay you have an idea you're ready and then you're in the back end of the software and you're going okay what's next let me get this QuickBooks open and just for those of you who don't have QuickBooks and you do have your 501c3 status you can get QuickBooks for 75 from techsoup.org I'll put that in the chat techsoup.org you can get QuickBooks for 75 you get a whole ton of cool stuff from techsoup but that's one of them is that the online one yes that is QuickBooks Online okay all right I'm pulling up education is key I got kicked out of QuickBooks okay and so yeah like Sharon said um one of her clients is kind enough to share their back end with us it is reasonable um for most you know brand not brand new but beginning non-profits and so the first thing I want to take you to is like I stated there are two important financial statements that govern Our Lives actually there are three but we need to get a handle on the first two and the first one that we will show you and we're just going to go right to reports because I want you to see visually how it aligns with the budget okay so I want you to see that there's consistency and there's a method to The Madness of the way we're presenting this information um so go ahead back to QuickBook Sharon and then go to reports and then remember I said it's called statement of activity on the non-profit side if you were in a QuickBooks for-profit version it would say profit and loss statement or income statement okay so go ahead and scroll down so we can see the top so this is your statement of activity report AKA your profit and loss statement it's for this year to date but obviously all of these drop downs will give you different views okay when you scroll down just a smidge more oh it is best practices for non-profits to use the accrual method okay and I won't go too much into Cash versus accrual but because it's non-profit uh standard is to use the accrual so you will see Revenue so Revenue AKA income means money coming in so this year so far they've had some money coming in and I want to say too so Amber and I are diving into education is key but two weeks ago before we got into the books of education is key and I wish I had left it but I didn't know we were going to use them as an example today this used to be a mess it would say sales and some other things that are very for profity so we had to go in and edit this to be appropriate revenues specifically for operations of a non-profit organization exactly and and and when we design it and we designed that budget template for you keeping this in mind we literally because the the language you know is open for interpretation we can call things what we want to call them as long as we know what bucket to put them in we'll illustrate that to you in a second but it's my recommendation that The Closer you can get from beginning document to end document using the same categories and words you're going to set yourself up for success so what we've designed for you takes again it again all the way through to the way um grants are going to require information and IRS filings are going to require information so basically took the most formal documents and reversed engineered it for your start document so you start that formal okay and that's usually not done but because again you're getting this from us who deal with it on the more formal end we think it's best to teach in this fashion so simple statement of activity this is the way I would look at it just quick snapshot right from January to present they brought in 23 Grand go ahead and scroll down a little bit Sharon they've spent x amount in advertising x amount and accounting fees X amounted fundraising fees x amount you know and you can see all of the expenses types of expenses and as you can see in this scenario these expenses are what are in the yellow category okay these are operational these are HQ these are what we would call fixed expenses because they exist whether a Gala happened or not whether a fundraiser happened or not okay now the one thing that I did see was payroll expenses salaries and wages okay I want everybody to understand this concept payroll the these three words payroll salaries wages equal W-2 employee say that one more time for the folks Amber payroll salaries wages equal W2 employee period and trust me this is important for a for-profit and non-profits okay especially in a world where there's been so much separation between W employees and gig work or contractors in 1099s there's legal implications there's all kinds of things so make sure you know what your relationship is with contractor gig worker or W-2 employee and have those formalities in place I assumed that whatever is under two the 280 salaries and wages is not salaries and wages why because I it's just not so I said Sharon please click into that so Sharon please click into that I just love how you can click on these these drill Downs are the best yes and so I think as we all know if it were in fact salaries and wages it would somewhat mirror what if you're a W-2 employee what your paycheck stub looks like it would be net pay it would be state taxes it would be futa it would be unemployment taxes and it would be several line items okay so this particular eighty dollars go ahead and click into it and I'll tell you how we know what this eighty dollars is because we this is a client of ours so we also manage specific transactions and because we're new with managing the finances of this client I've asked her to keep a spreadsheet of what every transaction is because I don't know what people do when they spend their money sometimes you know when you do a debit so I you don't always know what it's for and Amber and I can't assume so I've asked uh your girl Nico she's the founder of education is key to keep track of every dollar amount so I sorted it eighty dollars was spent to a DJ for her we outside event so that's how I know what this eighty dollars is for and that's also because it that's how we know it's not payroll and expenses and also because it just doesn't make sense to have an 80 payroll and also too you see that spreadsheet that exists okay this goes back to the responsibility of the founder so the founder even though she has support on the accounting side she keeps a spreadsheet for best practices of what's going on because remember your accountant is not a mind reader okay yeah swipe it Chevron we assume it's gas but was it gas for a company vehicle was it gas for a special event was it even gas you get me like lead the horse to water please so we know for a fact that this is not a salary or wage so we are going to place it in a different category boom and it we created that cost of goods sold um where is it what did it go away yeah so going across the console give you more of you or give us more view Sharon okay yeah go ahead um that drop down isn't it may not have saved when we did so what Amber and I did is we went into QuickBooks and created a category for cost of goods sold for services so that we could associate this specifically to this program and social event that Nico had so go ahead and close it go ahead and close out on that and then let's take them to the chart of accounts okay so this illustration okay because remember QuickBooks is online it's automated you sync it to your bank account it's smart but not so smart but too smart okay so just because QuickBooks makes a recommendation of what bucket to put something in just because um there may be a rule that QuickBooks kind of like AI has started to learn and start to shove things in Please be aware that it can import duplicate transactions it can categorize incorrectly and again this is a whole other class if you want me to teach you QuickBooks okay but I just want you to be mindful if you're wondering why maybe your general ledger is sloppy or why your accountant is asking so many questions it's because again it has to be a team effort you please don't rely on your accountant to figure it out you have to be an intricate part in setting it up and having the all the accountant is going to do is tell you about Gap about accounting best practices that's it they are not running your organization they do not know your efficiencies your profitability they they don't know that you're not paying them for that they're not a CFO okay they're not a VP of Finance within your organization they're a certified public accountant you know and obviously we rely on them heavily right to prepare our formal documents but they are not working in your business with you so unless you're calling them before you do any type of activity or transaction they are not working with you on the offense they're working with you after a transaction or activity has occurred and many of you only talk to your account or CPA once a month quarterly or annually depending and you're making daily decisions so that's why it's important to educate yourself through mediums like this to have these open and honest conversations with your accounting professionals and don't be intimidated and listen they want people to ask questions and be part of the process I promise you they do they don't want to fly blind put them in a position to protect you okay they will do their best if you are a participating part and the way you can be a participating part is to really learn from what we're talking about here so bam QuickBooks you go education is key you type in your EIN you type in your address you type in what type of non-profit are you you say are you a service are you a product well most of the time nonprofits are service based if you're a product base that's a whole different list of categories so remember how we were kind of talking about on when we had that view of the chart of accounts where I said you need to know about your income you need to know about your expenses but when you get a little more advanced we need to talk about assets and liability you see under account type here you seek things such as assets what are fixed assets what are current assets other assets keep going here's your liabilities sometimes you recognize this stuff sometimes you don't Equity remember I told you that was an advanced one okay Revenue the other word for revenue is income those can be used interchangeably and then when you keep going down you get to your expenditures AKA your expenses the other thing I wanted to show you is scroll all the way to the bottom forum QuickBooks and we've cleaned this up a smidge QuickBooks gave you 75 categories remember when we ran the profit and loss or the statement of activities how many were there like under 20 yeah so this organization is only using 20 of the 75 categories and that's that's standard so what can you do well you can go in and you can and so Sharon if you want to go like to the right because this is how QuickBooks has gotten very smart and very supportive so I want you to use this tool so for instance Printing and photocopy you know and I love that it's broken out like that because to be honest with you some of us would just put that under office supplies so whoever is doing this wants to track Printing and photocopying at more of a cellular or granular level right because maybe they do a lot of printing and photocopying so they want to manage and look at their costs associated with that activity so it's not just like how we would do it for office supplies maybe a couple copies here or there so maybe that's why they're wanting to track it at that granular lever it's level excuse me and again I mentioned this because you can you can segment to your little heart's desire you know my one of my businesses relies heavily on travel and by segmenting it out not just travel but airfare Rent A Car even checking bags one year I discovered that we were spending x amount on checking bags because we weren't leveraging like our status so by me getting like my directors um and you know Platinum Amex the 250 allowed them to check the 250 annual fee allow them to check so many bags and I ended up saving six thousand dollars that year because I was tracking the baggage you get me so this can be a powerful tool for you so do the um the drop down sharing the arrow and go to edit let me get zoom out of the way okay so again back to how smart this is and how supportive this is it's it's a godsend these days okay so expenses office expenses but there's an asterisk there on the first two they've account under asterisks and then get out of that real quick Sharon so we can just see the one underneath it and then tax form section asterisks you see QuickBooks is setting it up the way we send our set our budget template up they want you to choose from an approved drop down menu that is going to tie directly into your tax return so it's it's almost just like you know another set of eyes that's covering your ass right on your site that you can play with and you can figure out and I gotta be honest with you you know I don't have a lot of experience in equity you know my none of my businesses manage that and my CPA does the end of year journal entries regarding you know anything to do with equity but I have clicked in there and learned a lot and familiarized myself with some of it so I'll look at what my CPA did and I'll look at it against my books and then I'll try to figure it out myself so I have a better understanding so I can speak more intelligently about the matter and so now that you guys have this at your fingertips you know you don't have to change anything you don't but you can click in there and really play around with some things and you're gonna have some aha moments over time you're going to really start to tie all of this together and it's going to make a whole lot of sense to you and before you know it you're going to walk around very confidently in this area so you can go ahead and close out of that so assuming that step one you did your budget and you have everything aligned in that and and you feel confident about what that looks like print it out have it to your left and when you go into your chart of accounts make it match the verbiage match anything you don't need that QuickBooks gave you take it out anything that you do want to add put it in and regarding your special programs we segment that out in an area called Tags or classes so again the level of segmentation it can get very cellular so when it's time to answer to hey how did this Gala perform no problem you go to your reports you go to your statement of activity but you do it by class and you sort it by class and it'll tell you how that event performed not how the organization is performing how that event performed right and so you know again I just it's I I really encourage you to get in here and get your hands dirty with it and you know if if you do in fact align yourself with an accounting firm see if they have some type of a package that allows you to go behind the scenes with them for the first few months do me a favor Sharon go up to um overview on the left side all the way up our dashboard is fine uh go to business overview yeah the other thing too that and scroll down a little bit so anytime somebody comes to me and they're like hey like can you take a look at my books I'll do this quickly because I just want to see a snapshot of the Integrity of the data and that that's enough and don't get me wrong the snapshot doesn't always tell everything okay but in this regard um because I wanted to see the accounts and last time they've been reconciled and what have you they have not correct filed okay but there's a in go to banking um yeah so go to Banking and then let me show you how important this is so remember when I told you that sometimes QuickBooks will double import scroll down a little bit when you sync your bank accounts to QuickBooks nothing goes into your general ledger okay and oh hold on I have a visual well okay you guys remember when we used to have to keep track of our checking accounts in the old school General ledgers yes no okay that's what this is so go to your ClickBank register Sharon all right I got it the visual hold on a second because this is honest to God how I teach my clients and my son and anybody else who will listen to me for more than five minutes okay do you see how it's the same time right okay so look check this out I don't know if you guys were like this but so we would write everything down and then I would call in every morning because it was before internet and I would have my trusty highlighter and I would listen to what checks had cleared and then I would highlight them okay highlighting in here is the exact same thing as reconciling in here did I demystify that for you or what so when you reconcile your account you literally take the bank statement and you have that to your left or on your left screen and you go in and you check mark cleared cleared cleared cleared cleared please note if you're ever audited which I don't even know do nonprofits get audited well yeah they do actually because they have the third party audit right okay so it's not like like the crazy examiner from the IRS for the for-profits but let's get over to 250 000 uh in gross receipts but yeah okay well then I will tell you this the first thing they ask is your QuickBooks reconciled if the answer is no they don't even start the conversation until it's reconciled because the first thing that you do when they decide the scope of the audit you actually hand over your statements because the way they figure out the first the first layer of an audit in any funny business they look at your beginning and ending balances and what's cleared and then they just do the math on that and see if it lines up with your reports from your general ledger and then oh this is a good example go back to reports Sharon because there was some in non um non-reconciled under the statement of activity um do you see uncategorized expense oh yeah well it's not breaking solid but all of this has to be put in somewhere too and so again that's why we need your participation and oftentimes it's within an Excel document where you're giving us details okay and there's that 220 right there looks like she paid oh and that had to do with that a same special event same special event boom so now you can see the behind the scenes of how the reporting happens so again and let me tell you again why this is so freaking important you would be shocked because I've sat on so many boards how board members are making decisions about your business or about the business you know the businesses and publicly traded stocks Etc that don't read financial statements and they're raising their hand with opinions don't be that person understand the financial statement and drill down that's I mean that's literally my recommendation if you can be that non-profit founder who understands financial statements and drill down and be able to explain it at a cellular level to your board you are going to be a one percenter and you are going to be incredibly deserving of everything that you're asking for so when you get this under wraps the sky's the limit for you any questions so far while we're in here with QuickBooks and looking at the statement of activity AKA p l and clearly there's some cleanup so as you can see like when you guys do pull up your statement of activity this is the first thing that I do when I go into client accounts and I'm looking at their non-profit records I immediately go to the statement activity and then I just kind of look at some of the stuff and I'm like does that make sense and if it doesn't make sense I click on it just like how we were telling you with the the payroll expenses like 280 dollars under salaries like that just doesn't make sense so that's why I clicked on it and then I was like oh went and checked Nico's Excel to match them so that we can code appropriately um but a lot of this a lot of this is coding right and the reason why we break it down so specific corporate and Foundation grants donations from direct like specific individuals grants from other non-profits the reason we break it down is because when you do a Grant application the Grant application is going to ask you who are your top five funders you can go to your statement activity and pull that information without having to go back through and look at your notes because you did your chart of accounts appropriately very important very important and also Sharon can you explain to them about restricted and unrestricted funds yep so in here too uh we haven't approached that yet with this client but on you're going to have a line item for restricted and unrestricted grants or funds that come into your organization because we want to know what funds do we need to track we want to know if there are specific requirements unrestricted could go towards programs overhead anything your organization needs is it if it comes in restricted then it's for a specific program or a specific purpose and cannot be used for anything else so we like to track that detail here in our contributed income yeah and and that's really key because and so again back to fiscal responsibility you as the founder you know you have to have your Perpetual data room set up where you have and when you're working with your accountant because we come in as third parties and we work with accountants and CPAs on the cleanup of stuff and once we get through the expenses and and get all that tidy we go back to the revenue right because that's what is feeding the organization and then when we start drilling down into the grants we're like where is the grant oh I don't know I have to get a copy of it no if money comes in from a grant immediately if you're not uploading that Grant so and let me and let me show you even if you don't want a separate database for example click that ten thousand Sharon we'll just assume um yeah classic view and then click into um scroll to the right for me and just go ahead and click that ten thousand so it'll take us to the general ledger okay so let's just assume this was a grant and let's just assume or that it was restricted okay so there are specific rules around how this money is to be spent scroll down a bit the way you can communicate this to your accountant is you can attach paperclip bottom the copy of the grant and the rules governing the money okay so that way it's in one place it's directly attached to that 10 grand then of course you know you go perfect example the headache we had yesterday we have a client that has not been doing this and not been tracking their grants and they are getting grants over one million dollar grants and they're coming in at 200 000 here and there 300 000 here and there one of them I believe was like 19 836.80 are not in the same calendar year right and not in the same calendar year and Amber and I would have been able to clean that up in seconds had the attachment for the grant requirements been a part of the financial uh input we would have been able to pull that read it got ah okay this is what it needs to do this is what it's for then give the client the information so that they can produce that Grant report appropriately yep so this goes back to like record keeping you know Integrity of documents uh transparency and then over communicate everything if if your main takeaway here is nothing it is please remember you are responsible please don't dump it in your accounting professionals lap and walk away from it any questions well before I leave QuickBooks does anybody have questions while we're here in the QuickBooks if you have a question just go ahead and go off mute uh because I can't see the whole screen or just jump into the chat and ask a question we've got five minutes left here so we'll leave this for open q a on anything financial statements anything on budgets a beautiful statement of activity will be produced once a couple of these line items are cleaned up and then we will be able to prevent a great statement of activity for this client and then guys before you leave if you want to just put in the chat anything else you want us to teach you expand upon um anything you want to deeper dive into you know we know this is heavy info yeah but you know it's it excites us it doesn't excite everybody but what you know whatever you want on your radar to be top of mind to set you up for Success what was the red on the excitement of the activity chart um on our budget go back to that yeah maybe go back to the budget yeah I know we've got a hand up with a question too go ahead and ask your question while we and I'll pull this up Michelle I think you had a question didn't you I see you okay go ahead hi um my question is so when you put the restricted Grant into the QuickBooks is there like a Pacific area where you have to download like everything that you did with that grant money or is it going to calculate it based on what you input if that makes any sense it does so you know what let's do that for the next lunch and learn Sharon and so that's when we'll teach them about classes and then so but just to give you an example so the way it is is so when you're in this in QuickBooks right and let's say for instance for that Grant um you were it was it was a fellowship I'll use it real example and you sent um some people to Costa Rica so obviously their airfare was part of that restricted Grant because it was a program also their um their travel insurance so when you go in to enter travel insurance you're not going to put it under your regular Insurance category you're going to put it under programs you're going to put it specifically under the name of your program okay and then and then insurance but it's gonna it's gonna go into the bucket of that specific program but when we're in the general ledger we'll show you how to create those segmentations and then fly it back over to your activity statement so you'll kind of see it separated out with your organization profit and loss and then your special program profit and loss so it's possible to have an insurance up here for headquarters and travel insurance for a special program okay or event Insurance let's say you were doing a concert and you had to get a COI right it would go under that special event versus insurance for the non-profit as a whole and we can teach you that but I'd like to teach you like in real life to show you exactly how to enter it and then bam what it looks like on the report so I think that would be good to do a demonstration of restricted and non-restricted and setting up programs within the chart of accounts thank you so much no problem and then so for the red um the red is basically salaries and wages I.E uh W-2 employees or also contractor fees for professional management so I've also seen on some of larger non-profits that they really do pay big money for and this kind of tripped me out I don't know why lobbying so some of these non-profits are using a lot of their revenue is that the right way we say it Sharon to pay for lobbying to pay for which is okay if you're classified as a non-profit that was given the approval by the IRS to Lobby isn't but isn't that crazy that I'm not you know I was like whoa that's crazy I mean it's all within the guidelines but it's it's a line item foreign y'all that brings us to the end of the hour today thank you so much for joining us for our lunch and learn on financial statements not a fun topic but as you get to feel a little bit more empowered with it it can become really fun and it's kind of also like instant gratification when you get a chart of accounts cleaned up and you get a reconcile it's totally instant gratification I know that I had uh I definitely thrived off of that and enjoyed it so reach out to us we are recording today we'll put this in the private Facebook group um you can find us on Instagram it's on the screen all our information we really appreciate your guys's support and joining us we will be back next week at the same time on another lunch and learn with another fun topic thank you guys thanks so much bye everyone