What are in-kind Donations
In-kind donations include physical property services and rent-loose space. 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, you will 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.
- Create the Journal entries to record the donations.
Create a New Income Account
To create a new income account, follow the below steps, you will be able to create the income account:
- Select the List menu option and click the “Gear icon “and “chart of Account”.
- Now, select the “New” option.
- Then after selecting that “Setup”, select the “in-kind account” under the Income Account.
- Income Account will be available under the “Type“ drop-down menu.
- Then customize the “services donated” to an “Expense “ account.
- Customize the “Items donated” to an “Asset” account.
- In the description field, enter descriptions.
- Select the tax from the tax line field.
- Then click Ok.
Create the Journal Entries to Record the Donations
To create the journal entries to record the donations follow the below steps:
- First, make the Journal Entries under the “company file” drop-down list.
- Then enter the date of donation and entry number in the relevant options available.
- Now, to credit the donation amount, select the account.
- In the credit column, enter the price of the 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 person’s 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 Organizations
To record the in-kind donations for non-profit organizations follow the below steps:
Create an income account:
- First, click the List menu, select the “Gear icon” and “chart of Account”.
- Now, Select “New”.
- Then, 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“.
- Customize 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, and select the product and services.
- Click the “New” option.
- Now, 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 (+) option.
- 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 the 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 for 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 comes in the form of material goods and personal products, these terms are referred to as in-kind donations in non-profits.
A non-profit organization that details the type and cost of donations, 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, and medical needs. All products will come under these terms as assets. It also includes actions to raise the money for funds to provide for people.
Services must meet the requirements for in-kind donations like consulting, video film services, social media assistance, and legal consulting, these 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 including free or preferential use of copying or printing and other administrative services and for office, other related examples like discount meals and discounts for every other purpose or its services.
We hope the above article provides the overall information about how to record donations in QuickBooks. If you need any further help or if you’ve any queries regarding it, feel free to call us on our toll-free number +1-844-405-0904. We’re here 24*7 to provide you with the best support.