Collaborate on Quickbooks Invoice Example for Nonprofit with Ease Using airSlate SignNow

Quickbooks invoice example for Nonprofit

hello everyone and happy New Year happy happy New Year happy 2024 today we are going to be talking about how to set up your QuickBooks online account in [Music] 2024 it is a new year I am proud of you uh for taking the step to want to either set up a new account right if you're new here or if you are looking to clean up an existing account right there is space in room for you here if you're looking for how to set up your QuickBooks online account specifically for nonprofits then you're in the right place QuickBooks tends to or I should say into it they tend to make changes very consistently over the course of the year to QuickBooks Online they are very big on listening to feedback and so things change here and there but I will be quite honest not a lot has changed it really is about knowing what it is your organization needs to track and manage and then how you need to do that in QuickBooks online and so we're going to jump into a bit of that today so keep watching now the first thing you want to do is get your QuickBooks Online subscription from Tech soup if you are not familiar I've talked about tech soup on here a few times but Tech soup is also a nonprofit but they sell various different softwares at a discounted rate to other nonprofit organizations and so that is where you want to start you want to purchase your subscription through them so that you can start off with a discounted rate you're not paying full price right you might as well take advantage of being a nonprofit so that's the first thing get your QuickBooks Online subscription through teex now when you first get into your QuickBooks online account what you're probably going to notice is that there are a lot of things that are kind of set up for you what you want to be mindful of is a lot of these settings are really for for profit businesses not really for nonprofits and so there so there are some things that we need to do to make sure that one we let the system know that we're a nonprofit but also this helps because when we start to run reports and Export things we don't want it looking weird especially if um you know we're giving this to you know external users there's a certain way that it's expected your your financials are going to look if you are a nonprofit versus a for-profit business and so let's walk through a few of those so the first thing you want to do is select your company type you want to let QuickBooks Online know that you are you are a nonprofit organization I believe it asks you what is like your industry you want to be clear that you are a nonprofit you want to choose your appropriate tax form right so you are filing a 990 hence being a nonprofit right you also want to make sure you indicate whether you are operating on a calendar or fiscal year that matters and then you also want to include in settings whether you are operating on an acrel versus versus a cash basis whichever one it is make sure that you select the right one typically in QuickBooks Online those who give money right to to the business to the organization as it stands it might say customers we want to change that to donors or you can change it to funders um the um typically we change it to to donors because that is the overall right highlevel name that tends to tends to be used we also want to make sure turn on class and location tracking which I'll get into a little bit later but you want to make sure at least that it's on because we will be using that for a certain function as it relates to um being able to report on certain things and the last thing to mention here is updating your reports when you go into the report section you'll see your p&l your balance sheet right but we know that in the nonprofit space that really should be like your statement of activities or your statement of financial position we'll talk a little bit about how you get your statement of functional expenses but you want to make sure that when you're exporting this data these reports that the naming conventions are correct because it just speaks to little details about whether or not you guys are paying attention to those sort of things right if I'm an external User it's just something I'm expecting to see if an organization is a nonprofit that is like the settings right those are the settings so typically when you're setting up your nonprofit QuickBooks online account it's all about what do I need to track right and this is going to be different from for each organization but there are six different ways that you can track something so that's going to be tags that's going to be classes right that's going to be a project location product or service or a category right so we have these six different ways to track data now when to use what I'd say actually isn't really that subjective right there are some ways that we're going to talk about that are best just just due to how we need to see things when they're reported and then you have some wiggle room with other things but the first thing um we're going to get into is the category which is your chart of account and if you've been here any amount of time you know that I'm all about chart of accounts equal natural categories I do not want to see different programs in your child of accounts all each program's expenses in your chart of accounts like I don't want to see three pages right of accounts in your chart of accounts like we should only be using the chart of accounts for natural categories and I'm going to give you guys an example now this is not a comprehensive chart of accounts I stuck to just income and expenses here revenue and expenses what I want to point out though is the level of the high level of natural categories that we use here versus putting in every single detail in your chart of accounts so you'll see here we start with contributed income this is where a lot of your income is going to fall right there's income that's given by individuals you have your corporate and Foundation grants your government grants and then other and remember this could be different for your organization this is just a highlevel example we have some special events here and we show it net right we have other income in the event that that's something right for you guys we have that net assets released from restriction the we get to some expenses we have Awards and grants to others we have payroll expenses high levels salaries and wages I don't need to see though here salar you know sub account for salaries and wages and I'm seeing what each one of your team members on payroll made and that's ending up on the the statement of activities that would be something that's considered a little too detail borderline you might be some privacy issues there but just a little too much detail and not needed on your Main Financial statements and we even get down to contrac and professional fees right keeping it high level who are the main contractors that you're paying right and then what falls into that other piece and you can kind of see for yourself occupancy advertising and promotion and then like your office expenses but again the key here is what are the natural categories because for example you might advertise for multiple programs does that mean you're going to have advertising and promotion program one uh program two program three no we don't need to see that on your chart of accounts but what you will have is that you have your advertising and promotion account that sits in your chart of account but when you have those expenses come up for different programs you can tag it to the specific program by using classes so it's important to know how you're setting up and the features that you're using because you can do some of those things on the back end and then actually report on it but we don't need to see it see it in your main financials your main financials you want to keep clean you want it to be clear and you want it to be as simple as possible to where you are not inviting so many questions to the point where your user just really doesn't understand what it is that you're giving them and what it is that you're trying to show them so I hope this example helps now the key here is to be able to keep as much data in the file and for things not to need massive reconstruction when you get a request or report is needed you know there have been many times in the past where when using other systems we'd have to like export things via Excel then manipulate and then create a report or some kind of you know graphs and uh tables in cell but outside of the accounting software which is also very time consuming and so the key here is to not to have to do that and so I hope by one seeing what you should be using the chart of accounts for I hope that helps kind of set the stage for the other things that we're going to go over but based off of what I've shown what I showed you it's natural things it's the highlevel categories right that we're grouping because all details do not need to be included in your main financial statements however you should be able to get to those details by pulling other reports which is why we set things up in a certain way so after you set up your chart of accounts you're going to set up your functional expenses in that we use classes so at the very least you need to have three classes and that's going to be um General admin fundraising and programs now here's where you have some finagling some organizations like to indicate the individual programs by using a sub class they like to indicate individual fundraisers or um you know you might have different event like fundraising events or gas or things like that and you want to track those individually so you might want to have sub classes under fundraising but at the very least when you file your 990 you are to include in your 990 the breakdown of your functional expenses which is why you should be managing your functional expenses on a monthly anyway one because you just should be reviewing it to see where things lie but then also because it's going to be necessary when it comes time to file your 990 the third thing you want to set up are your locations in which we have two and that's going to be how we set up our funds and that is going to be one location is going to be with donor restrictions the other location is going to be without donor restrictions every single income item should have a location that says whether it is with donor restrictions or without this is very big especially for those of you who are managing different levels of funding different types of Grants you need to know what's restricted and what's not and you need to be tracking that in QuickBooks online and the start of doing that is by putting it to the right location and if you see me hesitating I keep wanting to say tag but tag is another feature in QuickBooks and I don't want to confuse you so you put it to the right location next is restri restricted grants right so we now have you know whether you know the funding that has come in is whether it's restricted or not but the second piece to that is if you are managing restricted grants those should be added to QuickBooks Online as projects and this is so we can track these individual grants so that we can report on them and so that it's easy for us to pull and see how we're spending against what's been given easier so that if we need to pull a report and just to see like are we even spending in the right categories you know are we spending in in ance to whatever um the Restriction is are you required as an organization to report to the fun or to your board about different restricted grants it's easier to do when you set it up in your system and so one of those things is by using projects because you can you can use projects to indicate the income to indicate the expense and then QuickBooks has real really evolved in its ability to report and track on projects and so for those of us who have those restricted funds that level of reporting actually usually is needed and so that's another thing that you want to have to you don't want to have to do manually so if you set it up correctly in QuickBooks Online you'll be able to pull the report on that and lastly you want to think about budgeting right so every year you should organization should be creating a budget it should be approved by the board and that budget should then be put into your accounting software so that you can run the budget to actuals and review where you stand on a monthly basis um in relation to what's actually moving in and out of the organization the deeper part of that is that you know you need to determine are there any other things that you need to run budgets to actuals on whether it's a certain program whether it's a certain Grant because that also will determine how you set it up in QuickBooks not only can you set up budget of course by category but you can also set it up by class and so depending on what it is that we're looking to track we would' be able to set that up in QuickBooks online but we have to be using the correct feature and so this is why it's nice to have these conversations at the beginning you know if you're already using QuickBooks online and it's kind of a little bit messy now is a really good time to do cleanup right and to determine okay moving forward this is what we're going to be doing and so don't get discouraged there are ways to to do clean up you just have to set what's going to be your clean slate so that you know what needs clean up and you know at what point you're going to be moving forward and the last thing we'll talk about here is that you need to be thinking about reporting it's not just what reports do we need but really who also needs them because what the Board needs to see is going to be different than what your Banker may want to see versus what your funer or your auditor may want to see and I'm just throwing out different users of the financial statements but it's important to know who are the users so that you know what type of reporting you need right so we know at the very least you're going to do your main financial statements and that's your statement of activities your statement of financial position your statement of functional expenses and your statement of cash flows right if you set up QuickBooks Online properly you can pull that that information you know fairly easily remember you're using classes to track functional expenses and so you'd run your your um p&l by a class if you wanted to get your statement of functional expenses that's like the main set right the second part rather to that is getting into the nitty-gritty being able to report on individual programs being able to report on specific grants being able to see where your restricted funds lie these are things that you want to go in knowing because setup should support what you need to operate your organization and so you need to think about whether or not you're managing any of these things and whether you need to see reporting at that level of detail now I kept it kind of basic uh because we're talking setup right we're talking about how do you set it up to at least track and see what you need to see on a consistent basis now we can of course get very deeper you know we have an organization now who uses tags but they use tags because they are a fiscal sponsor and they manage multiple organizations under that fiscal sponsorship and so they use tags to tag all of the different transactions that are applicable to the organizations under their fiscal sponsorship right and so depending on your organization it can get a little bit more complex if you have any questions about something you want me to go over deeper or more specifically please drop it in the comments in the next video I am going to be talking about the tools that I recommend because let's face it one of the beauty beautiful things about using QuickBooks Online is the fact that it does have Integrations by using Integrations you can actually enhance your use of the tool and so I'm going to be talking about some of the tools that I use right to not only support what we're doing um in QuickBooks online but to enhance it and so you'll want to stay tuned for that video I hope this was helpful if you have any questions drop it in the comments below and I will see you guys in the next [Music] video