What is in-kind donations:
In-kind donations include physical property services, rent-loose space. If suppose a person can donate objects or stocks with their expert expertise, these terms were said to be in-kind donations. The accepted physical accounting method is to create a separate income account, but the cost of the transactions must be recorded in your functional expense account. In this article, we can see a brief overview of in-kind donations in QuickBooks.
How to record in-kind donations in QuickBooks:
These are the two steps to record the in-kind donations in QuickBooks.
- Create a New income account.
- To create the Journal entries to record the donations.
Create an New Income Account:
To create an new income account, follow the below steps, you can able to create the income account:
- Select the List menu option and click the “Gear icon “and “chart of Account”.
- Select the “New” option .
- Then after selecting that “Setup” the in-kind account under the “Income Account”.
- Income Account will be available under the “Type “ drop down menu.
- Then customized the “services donated” to an “Expense “ account.
- Customized the “Items donated” to an “Asset” account.
- In the description field ,Enter descriptions.
- Select the tax from the tax line field.
- Then click Ok.
To create the Journal entries to record the donations:
To create the journal entries to record the donations follow the below steps, then you can record it.
- Make the Journal Entries under the “company file” drop-down list.
- Then Enter the date of donations and entry number in that relevant options available.
- To credit the donation amount ,select the account.
- In the credit column,enter the price of total sales of the post.
- To add any extra information about the donations ,enter that information in the “Memo field”.
- In the” Name field”,enter the donated persons details.
- Select the Account type according to your preference that you are going to record .
- Then finally save and close it.
- Donations will be recorded successfully in your QuickBooks.
Records in-kind donations for non-profit organization:
To record the in-kind donations for non-profit organizations follow the below steps:
Create an income account:
- Click the List menu ,select the “Gear icon” and “chart of Account”.
- Select the “New”.
- Select the Income under the Account type section.
- Select the Non-profit income under the Information type.
- Then ,enter the name as in-kind donations.
- Finally, save it.
Create a cleaning account:
To create the cleaning account follow the below steps:
- Select the List menu and chart of accounts.
- Click “New”.
- Customized cash and cash equivalent to an Account type.
- Customized cash and cash equivalents to a Detail type.
- Enter a name.
- Finally, click save.
Create a new service for the product:
To create new services for the product follow the below steps:
- Click the Gear icon ,select the product and services.
- Click the “New”.
- Enter the name and suitable description for the donation
- For in-kind donation ,select the income account, from the drop-down list.
- Finally, save it.
Receiving the donations:
Follow the below steps during the receiving of the donations:
- First select the New (+).
- Choose proof of purchase.
- Then enter the name of the contributor.
- Enter the date of contribution .
- Select the appropriate services.
- Add any extra information if you need it.
- Assign the class if you need it.
- In the amount field enter the fair market value of contribution.
- Select the in-kind cleaning account under the deposit drop-down menu, that you have been created already.
After receiving the services donated:
Follow the below steps after receiving the services donated:
- Select the New option (+)
- Then select the Bill.
- Enter the information with the same services you used in the order.
- Change the name of the provider in order to the system to accept it.
- Then assign the class,if you need it.
- Select the New option.
- Select the bill to pay the cleaning fee from your bank account.
More about in-kind donation non-profit:
Most non-profit organizations rely on gifts from other companies and from the public to achieve their targets. These come in the form of material goods and personal products, these terms are referred to as in-kind donations in non-profit. A non-profit organization that details the type and cost of donations it will receive to support its goals. Although handwritten donations are an important source of support for many non-profit organizations, correct registration and report handwriting can present some special challenges.
Types of in-kind Donations:
- Property Generations
- Donating services.
Assets or property that can be considered as an in-kind donation may include software, hardware, furniture, groceries, medical needs. All products will come under these terms assets.It also includes actions to raise the money for the funds to provide for people.
Services that must meet the requirements for in-kind donations like consulting, video film services, social media assistance, and legal consulting. are the terms available in services.
Social helpers create or increase the value of an asset , it is regarded as a donation to non-profit organizations such as a group of social helpers that help the people according to their needs. They provide all the requirements they need.
Donations that meet the standards of charitable activities include free or preferential use of copying or printing and other administrative services and for office, other related examples like discount meal and discounts for every other purpose or its services.
To conclude it:
We hope the above article provides the overall information about how to record the donations in QuickBooks.