Lisa London's Blog, page 4

Techsoup.org now offers QuickBooks donations to religious organizations!

Great news! Techsoup.org, a phenomenal resource for nonprofit organizations, announced today that eligible religious organizations can receive donations of QuickBooks accounting programs.  This is a substantial money-saver for churches!  And, remember, QuickBooks for Churches & Other Religious Organizations is THE resource for making QuickBooks work in a religious environment.

Church Accounting: The How-To Guide for Small & Growing Churches

I am so excited to announce the release of my latest book, Church Accounting: The How-To Guide for Small & Growing Churches! It is a collaboration with Vickey Boatright of FreeChurchAccounting.com and is designed to help churches with their church accounting needs.

FreeChurchAccounting.com has been the go-to website for all things related to church accounting since Vickey started it in 2008.

For Church Accounting: The How-To Guide for Small & Growing Churches, I took the topics that her readers found the most important (and asked the most questions about), and wrote a resource covering the most essential and useful information for church accounting in step-by-step detail. In it we cover how to:

calculate payroll & file payroll reportsdesign & implement a compensation package for your ministerunderstand the housing allowanceestablish & administer a benevolence fundestablish & administer an accountable reimbursement planset proper internal controls & procedures& so much more.

Vickey & I realize the staff & volunteers in churches could also use help designing and setting up the systems and processes we recommend in the book. So we offer downloads for:

Policy & Procedures Manual Handbook--to help design your own manual

Example Package--includes all the examples in the book as spreadsheets and documents you can change for your specific church

Spreadsheet Package--this includes an automatic accounting workbook for up to 5 funds, a contribution tracking workbook, a travel reimbursement workbook, and more.

These are also available in money-saving bundles.

And as an introductory offer, through the end of November, receive the Example Package free with the purchase of the E-Book or Paperback.

Using Classes when Inputting Beginning Balances

With many churches and nonprofits starting a new fiscal year on July 1, I often get questions regarding entering the beginning balances for a new accounting system.  If you are using QuickBooks, it is important to get the classes correct with these beginning balances. Earlier this year, I wrote up the following for Vickey Boatright of Freechurchaccounting.com to help her readers. I'm posting it here in hopes it will be helpful to anyone setting up their system in July.

Using the
Class function is necessary in QuickBooks to track funds and programs.You should set up each the programs you wish
to track as a class.QuickBooks does not
number them, so I like to put numbers in front of the name to keep the
unrestricted grouped together and the restricted grouped together (i.e. 100
Admin, 200 Worship, 920 Temp Restricted, etc.)

Funds you
need to specifically track should also be given a class.If someone donates money which the income is
to keep the cemetery maintained, you will need to set this up as a restricted
fund, by assigning it a restricted class.Use the subclasses below the restricted class to identify each fund
(i.e. 920 Temp Restricted:922 Cemetery Fund).

When
entering your beginning balances, most of the items will probably be assigned
to the general fund or unrestricted fund.You don't need to worry about program funds here, as they are used on
the expense side, not the balance sheet.Any assets (money market accounts, buildings, etc.) that are related to
a restricted fund would have the specific restricted class on the line
item.

Here is an
example from my book, QuickBooks for
Churches and Other Religious Organizations.

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In the
example, the building was purchased with a money donated as a permanently
restricted fund.The building cost
$100,000 so it was recorded in account 1520 Building with a class of
Permanently Restricted Fund.The related
mortgage and accumulated depreciation were also recorded to the Permanently
Restricted Fund.This leaves $10,000
($100,000-$70,000 mortgage -$20,000 depreciation) to be credited to the 3300
Perm. Restricted Net Asset Account with the 930 Permanently Restricted Fund.

This example is for a church, but the same concepts are used for other nonprofits.

Tips to Get your Nonprofit Financials Ready for an Audit

For many nonprofits, it is time to close the books for the year
and humor the auditors. Don't you hate those adjusting entries for things you
knew you should have caught before the
auditors arrived. One of the easiest ways to catch these items is to print out
your Statement of Financial Position (Balance Sheet) and look at the support
for each of the items on it.

For each cash account,
look at the bank reconciliation and tie it to the balance on the Balance Sheet. While you have them out, take the time to look
for checks that haven't cleared in months.
Do you need to make some calls and reissue the checks? And don't forget
to reconcile your petty cash and/or gift cards.

Investment account
statements should be compared to balance sheet. If the ending balance does not
match, you probably need to record interest earned and any investment income or
loss.

Print an aging schedule for each of your receivable accounts. Any old receivables should be reviewed to see
if follow up is needed or if they should be written off. Also think about any
recent grants awarded for which you have not received the money. Are they
reflected as a receivable as required by accounting principles?

Do you carry any inventory?
Books or tee-shirts? Now is the time to do a physical inventory and see the
number of items you actually have ties to the value on your balance sheet.

Prepaid expenses
often need investigated. Tie the balance of prepaid postage to the postage
meter. Did part of the insurance bill get coded to prepaid last year? Is it time to record the expense? Look at anything in the prepaid accounts and
determine if they should stay on the balance sheet or be moved to the statement
of activities (income statement).

Do you have a list of furniture
and equipment? Does it match the value on your balance sheet? Even if your accountant records depreciation
for you, it is a good idea to walk around and see if the assets are still here.
Notate any that have been lost or sold. Add
any new computers or other assets that are not on the list (if they are above
your capitalization level). If the total dollars on your list do not equal
your balance sheet account, some items may have been recorded to the expenses.

Print out the accounts
payable aging. Are bills incurred in the last fiscal year missing? If so,
you may need to record those charges.
Are your credit cards current? If you have charges since the last
statement, you may need to accrue these in an accrued liability account.

Payroll tax
liabilities should tie to your payroll reports. Any other accrued liabilities should be
documented.

After making any corrections/adjustments, reprint your
balance sheet and place all of the documentation you have compiled behind
it. If you put it in the order they are
listed on the balance sheet, your auditor will be impressed with your
organization. Who knows, maybe the audit
will be so clean you can negotiate a lower rate next year!

And, if you are using QuickBooks, look for Using QuickBooks for Nonprofit Organizations, Associations, & Clubs by Lisa London at www.accountantbesideyou.com to help with your nonprofit accounting.

How to Track Donations Received for Other Organizations

Wondering how to handle donations received for other organizations in QuickBooks?

Many churches and other nonprofits collect
money for other organizations like a food bank or Habitat for Humanity.
Tracking these donations and assuring the payments are made to the receiving
organization takes a few extra steps.

First, you will want to set up an Item with Service as the type called Pass
Through Donations (or something similar). It should be linked to an Income Account in the revenue area (Outreach or Pass Through Funding, perhaps). If you are receiving the donations
through a fundraiser or cash not from a particular donor, set up a Customer named for the other
organization (i.e. Food Bank). If the money is received from a donor, use their name instead.

Enter the donations as you normally would, but
set the item to the Pass Through Donation.
If you are collecting for several different organizations, set up sub-items to track by organizations. After
all of the donations for are entered, run a Sales by Item report for the time period of the donations to see
the total dollars owed to the receiving organization.

You
will now set up an Item with Service as the type called Pass Through Payments linked to an Expense Account-Payments of Donations to Others or Pass Through Donation.
Set up any sub-items for any multiple organization to match the ones you set up above.

Next, go to the Vendor Center and set up the
receiving organization as a Vendor.It
cannot be the same as the Customer name, so simply add a "v" after
the organization's name. Enter a bill for the amount of the donations (from the
Sales by Item report) and charge it to the Pass
Through Payments item or related sub-item. The check can then be printed as
usual.

Update:

I originally wrote this thinking of churches wanting to track their outreach donations for management purposes.  But be aware that if you are a nonprofit with reporting requirements, accounting principles may require you to treat this as a liability, not a contribution.  If so, you will set up the Pass Through Donation item linked to an Accrued Liability account instead of an income account. When you pay the receiving organization, use the same Pass Through Donation item on the write checks screen. This will bring the liability account to zero once the organization is paid.  Check with your accountant to see which way you should record the pass through donations.

Using QuickBooks for Nonprofit Organizations, Associations & Clubs is now available!

My latest book, Using QuickBooks for Nonprofit Organizations, Associations & Clubs has just been released. As the Accountant Beside
You, I walk you through QuickBooks in a nonprofit organization from start to
finish. Using a  friendly easy-to-understand style, and step-by-step
instructions and screenshots, I'll guide new QuickBooks users every step of
the way, while offering tips for how to make QuickBooks work better for even the experienced bookkeeper.

I also cover what you need to know to implement
controls and procedures to ensure that your money is always protected.

The step-by-step instructions and hundreds of screen shots
explain how to:

Manage member dues, fundraisers, and
trips Track grants and contracts Allocate overhead to programs &
grants Set up internal accounting controls to
protect the money
Automate Donor Acknowledgements Customize forms Track volunteer hours and much more.Using QuickBook for Nonprofit
Organizations, Associations, & Clubs includes sample charts of accounts for
associations, PTAs, private schools, scouting troops, and civic groups.

Available in paperback and ebook formats at www.accountantbesideyou.com and amazon.com.