What’s the number one accounting question on everyone’s mind about a special event? “How much did we make?” of course! We are talking about events that are primarily fundraisers, not events held to further the organization’s exempt purpose. It gets complicated when you have events for both program and fundraising purposes, but we’ll tackle that…
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Recently we received a question about how to handle deposits that come into the bank account net of fees. Since we are in the midst of covering income accounts on our Chart of Accounts Grand Tour, now seems like a great time to cover this topic. Here is an example: A donation of $100 is…
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In the last few posts we have been talking about contribution income and the kinds of income accounts you need. Our Chart of Accounts Grand Tour travels through in-kind donation income accounts today. In-kind donations are one of the more confusing and difficult areas for nonprofits. And that’s unfortunate because in-kind donations are so common.…
Read MoreDo you know the biggest secret to keeping good books? Well, we’re going to let you in on it. It’s managing the balance sheet. Many of the problems we’ve seen with bookkeeping can be traced back to not keeping an accurate balance sheet. We see many people focus only on the profit and loss report, and…
Read MoreMany clients that come to us with messy books reconcile their operating bank accounts every month. Yep, the bookkeeper checks off the cleared items, gets to zero difference in the QuickBooks reconciliation window and happily clicks to Finish the reconciliation. If you are reconciling each month, why can you still have so many problems? The…
Read MoreIs the credit card liability on your organization’s balance sheet accurate? Credit card accounts should be reconciled each month just like your bank account. Options for Reconcile Date You can reconcile to the credit card statement, or you can reconcile to the balance at month end per the history in online banking. If you use…
Read MoreRarely do we find credit card activity entered properly in QuickBooks. Usually we see credit card purchases entered into QuickBooks when the card is paid. The credit card payment is painstakingly split out and manually entered line-by-line following the purchase detail on the credit card statement. Problems with This Approach This approach creates several problems:…
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Have you ever put banana chunks in the freezer so you could use them later for smoothies? It’s a great way to preserve bananas since they ripen so fast. Plus they make delicious smoothies. Depreciation is like a banana that you chop up into sections and save in the freezer. Then periodically you take out…
Read MoreSo you bought a laptop computer. That’s great! Quick question: Is it an asset or is it an expense? Answer: It depends. Don’t you hate that? For one organization the laptop is an asset. For another organization, it’s an expense. It all depends on the organization’s capitalization threshold. The what? Capitalization Threshold Let’s define capitalization…
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What if your board of directors looks at your profit and loss report each month and things generally look good. Then one month they see a big loss. “That’s because I paid $1,200 to renew the officers’ and directors’ insurance policy,” you explain. One board member comments, “I was going to ask if we had…
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