How to Record Donations Your Business Receives in Quickbooks
Has your business received a donation? It’s not uncommon for businesses to receive donations. Even if your business isn’t classified as a nonprofit organization (NPO), it can still receive donations. Because this money isn’t generated from your business’s normal operations, however, it’s important that you record them properly in your financial records. Using Quickbooks, you can easily record donations that your business receives.
To record a donation, log in to your Quickbooks Online account — the cloud-based version of Intuit’s accounting software — and click the gear icon at the top of the screen, followed by “Custom Form Styles.” From here, click “New style” to create a new form, followed by “Content.” Next, click the pencil icon at the top of the menu, followed by “Form names.” You can then modify the name of the form, whether it’s an invoice estimate or receipt.
It’s important to note that the aforementioned steps only apply to donations that your business receives. If your business donates money to another company or entity, you’ll need to record that transaction differently. To record donations made by your business, log in to Quickbooks and click the gear icon at the top of the screen, followed by “Chart of Accounts.” Next, click New > Category Type > Expenses > Detail Type > Charitable Contributions. You will then be asked to enter a name for the donation, such as “donation to company A.” When finished, click “Save and close” to complete the process.
You’ll also need to create a product item for this donation. This is done by clicking the gear icon, followed by “Products and Services.” Next, click “New” and choose the type of product. You can then enter a name for the donation. Most importantly, make sure the “I sell this product or service” field contains a check mark. If it doesn’t click the box next to this field so that it places a check mark inside it. In the “Income account” field, choose the “Charitable Constructions” account that you recently created. When finished, click “Save and close.”
Recording donations is essential to keeping your business’s financial records in working order. Whether you make a donation to another business or receive a donation from a customer or client, you should record those transactions in your accounting software. You can refer to this blog post for more insight on how to record donations using Quickbooks.
Did this tutorial work for you? Let us know in the comments section below!