How to Record Donations Received in QuickBooks Online
Recording donations received in QuickBooks Online is an essential task for any non-profit organization or business that accepts charitable contributions. Properly documenting these transactions ensures accurate financial reporting and maintains transparency with donors and regulatory bodies. In this article, we will guide you through the process of recording donations in QuickBooks Online, ensuring that your financial records are up-to-date and organized.
Step 1: Set Up a Donations Account
Before you can record donations, you need to set up a specific account in QuickBooks Online to track these transactions. To do this, follow these steps:
1. Go to the “Chart of Accounts” section in QuickBooks Online.
2. Click on “New” to create a new account.
3. Select “Income” as the account type.
4. Enter “Donations” as the account name.
5. Choose “Other Income” as the account category.
6. Save the account.
Step 2: Record the Donation
Now that you have a dedicated account for donations, you can record the donation received. Here’s how to do it:
1. Go to the “Vendors” tab and select “Enter Bill” or “Enter Expense.”
2. Choose “Donations” as the vendor name if you have a specific donor account. Otherwise, leave it blank.
3. Select the “Donations” account you created earlier as the account to record the transaction.
4. Enter the donation amount in the “Amount” field.
5. Add any necessary notes or details about the donation.
6. Save the transaction.
Step 3: Record Matching Donations
If your organization receives matching donations from donors, you’ll need to record these transactions separately. Here’s how to do it:
1. Create a new account for matching donations in the Chart of Accounts, similar to the process described in Step 1.
2. Record the matching donation as an expense using the matching donations account.
3. Record the original donation as an income using the donations account.
Step 4: Generate Reports
Once you’ve recorded all donations, you can generate reports to review your organization’s donation activity. QuickBooks Online offers various reports, such as the “Donations Summary” report, which provides a comprehensive overview of all donations received.
By following these steps, you can ensure that your donations are accurately recorded in QuickBooks Online. This will help you maintain organized financial records, provide transparency to donors, and comply with regulatory requirements. Remember to consult with a certified QuickBooks advisor or accountant if you have any questions or need further assistance.
