#Free financial software for nonprofits how to
#Free financial software for nonprofits series

#Free financial software for nonprofits how to

The file is completely customizable, and comes with tips on how to tailor it for your organization. In addition to a framework for expenses, QuickBooks to Go!В® includes product/service items and documentation of common nonprofit bookkeeping procedures. The collapsed (summary level) reports are great for your board, and help management get that 30,000 foot view. QuickBooksВ®В to Go!ДЄn even easier way to get the expense accounts you need in a format that streamlines reporting for Form 990, audit, and management purposes is QuickBooks to Go!В® The organization of the expense accounts allows for collapsed and expanded reporting. Now relate that information to the chart of accounts used in your accounting system. Also refer to the Form 990 instructions for those lines which provide greater detail about the nature of the expenses to be reported. Figuring out how to do this is not hard вЂ“ on Form 990, look at the Part IX Statement of Functional Expense categories.

ItвЂ™s helpful to design your organizationвЂ™s chart of accounts so expense categories will flow easily into the IRS forms. Nonprofits required to file Form 990-EZ or Form 990 must report expenses using the format provided by the IRS. ItвЂ™s helpful to have an expense account for Program Supplies, or perhaps accounts for major categories of program supplies, as distinguished from the account for general office supplies. For example, a food pantry will have significant expense for grocery items, both purchased and in-kind. Nonprofits often incur expenses for supplies related to their programs. Grants and assistance are expenses to the nonprofits that provide them. Many nonprofits give grants, scholarship and other assistance to individuals and other nonprofit organizations. See our post Nonprofit Income Accounts Part 3: In-Kind Donations for more about in-kind donations. Common sources of in-kind income and expense include: In-kind expenses are always associated with a like amount of in-kind income.

#Free financial software for nonprofits series

For more information on functional expenses, see our post Demystifying Nonprofit Overhead and our series of posts on Nonprofit Overhead. Natural classification uses the chart of accounts and includes categories likeДЇunctional classification means breaking down expenses by the three main functional areas:Д®xpenses can be assigned to a functional area using a Class in QuickBooks. For example, a company that does landscaping and pool maintenance could use Classes in QuickBooks to assign expenses to the appropriate department. Actually functional classification is not so different from for-profit companies that track expenses by department. One unique aspect of nonprofit expenses is the requirement on Form 990 and in Generally Accepted Accounting Principles (GAAP) to report expenses by natural and functional classification. In the last two posts ( Part I and Part II) we covered accounting for special events. Noticing the account type can help you select the right account for recording a transaction.Д®xpenses of fundraising events are one of those expenses that are netted against event revenue, though they are still recorded to a separate account. Income (or revenue) type accounts are listed just before the expense accounts. Notice in QuickBooks (Online or Desktop) the expense accounts (also referred to as expenditure type accounts) are located at the end of the chart of the accounts. While there are some situations in which income and expenses are netted against each other for presentation purposes, for bookkeeping purposes you should record income and expenses to separate accounts. It would be better to record the luncheon income to a program service income account and record the expenses to expense accounts. ItвЂ™s surprising to us how often people record expenses into income accounts and vice versa.ДЇor example, income received for a program luncheon is recorded directly to the expense account used to record catering expenses. This post will give an overview of the nonprofit expense landscape, starting withвЂ¦ Distinguishing Expense Accounts from Income Accounts Payroll, office supplies, rent, and other expenses are commonly found in nonprofit organizations. Nonprofit expenses are in many ways similar to those of a regular for-profit company. Our Chart of Accounts Grand Tour now winds its way into nonprofit expenses.