QuickBooks Online is not custom-tailored for nonprofit accounting, but it has many useful features that help nonprofits manage their accounting and non-profit-specific management tasks. For instance, QuickBooks Online allows you to automatically track expenses by programs and funds, helping you stay on the right track and on budget.
In this article, we’ll discuss how nonprofit organizations can benefit from QuickBooks Online Advanced.
Customize Chart of Accounts
Nonprofits can configure their chart of accounts based on their organization’s needs. By making a few changes, you can set up your account to use the proper forms, reports, and terms used by your team. For instance, in your sales tax form, you can change “customers” to “donors” and “invoice” to pledge.
When properly set up, your nonprofit chart of accounts accurately categorizes your financial transactions into different accounts and subaccounts, such as revenue from donations or sales, program expenses, utilities, bank accounts, and more. QuickBooks Online also incorporates the Unified Chart of Accounts (UCOA), the standard chart of accounts for nonprofits, allowing you to easily transfer information directly into IRS forms.
Manage and Track Grants
QuickBooks Online can be configured to track receipts and expenses of grant funds through the State of Activity by Donor reports. These reports allow you to instantly see what grants you have received from your donors and how the funds were spent. You can record and keep track of a donation as a deposit, sales receipt, or pledge. If you accept in-kind donations and wish to track them in QuickBooks, then you first need to create a clearing account for such contributions and set up a product or service item for the donations. For accurate accounting, we recommend that you always check with your accountant whether a donation should be entered as an in-kind donation in QuickBooks Online.
Add Multiple Users with Defined Roles and Permissions
QuickBooks Online Advanced allows you to add up to 25 users, each with customized user permissions based on their role in your organization. This means you can easily set up individual user permissions to view, edit, or delete specific donors or data. This ensures security and transparency in your organization, as your data is only viewed by those who need it.
Use Location and Class Tracking
If your organization operates in multiple locations and you’re conducting different programs to raise money, then you can use QuickBooks Online’s class and location tracking. This feature allows you to track which among your locations makes the most money and which activity by fund and program is the most effective.
Keep Track of Inventory
Keeping track of your inventory is essential for insurance and funding purposes (e.g. government grants). If your organization sells goods, then you can use QuickBooks Online to track all your assets and inventory and calculate your cost of goods sold (COGS).
Tip: If you have inventory and assets that are spread out across multiple cities or states, then you may consider QuickBooks Enterprise for nonprofits for its multi-location inventory tracking feature. For instance, if your nonprofit sets up hundreds of computer labs in different offices, you may have over 10,000 laptops and computer accessories. QuickBooks Enterprise allows you to easily see all of your inventory.
If you have employees, then you can purchase a full-service payroll (QuickBooks Payroll). It enables you to pay your employees by checks or direct deposits, handle tax payments and filings for federal and state taxes, manage worker’s compensation, and more. When you subscribe to Premium or Elite, you’ll get access to QuickBooks Time, an integrated time-tracking tool that lets you track employees’ work hours and paid time off (PTO).
Gain Meaningful Insights through Customized reports
QuickBooks Online Advanced provides you with meaningful insights into your organization using customizable, presentation-ready reports. You can create custom fields to easily search, categorize, and filter import data, as well as set up customized dashboards based to track important KPIs, such as donors and grants summaries. With QuickBooks Online, you can categorize your nonprofit revenue and expenditures by fund or program and then create custom reports that will instantly show up in your QuickBooks Online dashboard.
Also, Advanced integrates with Excel (Spreadsheet Sync), which allows you to easily send data back and forth between QuickBooks and Excel. This allows you to edit and creatively customize your reports in Excel and sync them back to QuickBooks for more flexible reporting.