Is QuickBooks the Right Choice for Your Nonprofit?
Should nonprofits use QuickBooks for bookkeeping? Let’s dive in! I love working with nonprofits because I love how mission based they are. So many business owners have nonprofits that you’ve started on the side. If that’s not you, you probably know someone starting a nonprofit. So, I thought this would be a great topic to talk about.
We’re going to go over some key points. Like if it’s affordable, the features, different alternatives, and if QuickBooks is right for the bookkeeping.
First of all, we need to even talk about how a nonprofit has some unique financial needs.
Bookkeeping for non-profits differs slightly. They’re actually governed by a different set of rules. A lot of people don’t know that. There are different rules for nonprofit accounting and bookkeeping than there are for businesses.
Sometimes I see even more pressure from those of you running non-profits trying to get the money right because you’re tracking donations from individuals and you want to be able to present that to your board of directors or to the donors. You want to be able to show the money that they are donating and how you are spending it.
There’s a lot more pressure to be transparent and really have your bookkeeping together and have it cleaned up so that at any time those donors and those board of directors could come and see how the organization is doing. You also have some differences like managing grants and that type of funding. Also, donations which is a little bit different than sales.
Sometimes we have to track things a little bit differently to account for that. Then we also categorize things differently. So for nonprofits, we have to focus on whether something is restricted or unrestricted. So whether a donor specifies, I want this to be used for X, Y, Z purpose, that would be something that is a restricted donation. An unrestricted donation has no barriers to it and can be used for any operations or programming. It can also be used or any fundraising or any other part of the nonprofit.
There’s a little bit more pressure to get the money right because of all of these different factors.
Several of the nonprofits I’ve worked with love what they do but don’t love the bookkeeping stuff. They don’t feel good at it but want to be ale to track the donations and get it right and be transparent. It can be really a really stressful part of running the nonprofit if you don’t have a good system and routine in place.
Should a nonprofit use QuickBooks for their bookkeeping?
Yes. I think QuickBooks is still a great tool to use for bookkeeping. I especially love to pair it with a donor management system. Personally, I think it is much simpler if you track all of the donations from individuals and corporations through a separate system. There are several that will link and sync with QuickBooks, which can be nice, but you don’t even need that feature. As long as you’re linking the bank account for the organization, that is all of the information that we need.
It’s nice to have a separate system that tracks who individually donated and how often for the year. Then you can run your giving statements and reports all through that donor management software and keep QuickBooks straight for your donations coming into the organization. For the expenses or the things that you are spending money for your cause and for your mission, QuickBooks lets you customize the whole software so you are able to switch terminology. For example, you don’t have to call it customers, you can call it donors. It will actually allow you to switch the reporting so that you run the proper reports.
For a nonprofit, they don’t have a profit and loss report because it is a not for profit organization. Instead, we call it a statement of activity. A statement of all of your donations and all of your expenses to show what the net is. Then they have, instead of a balance sheet, a statement of financial position so that you can see how the organization is doing and where it is. So, it switches the terminology and those kinds of things to be customized to a nonprofit.
QuickBooks also allows you to make categories for the different donation types.
So grant revenue, or that restricted and unrestricted donations that like we talked about, and you can even customize it. Some of my nonprofit clients like to show the donations or the revenue based on individual versus corporate. So how many individuals are giving versus how many corporations give to the organization or they can do it by type. If it’s for a specific event or fundraiser, you can categorize things and make it custom to your mission.
That is another reason I think that is a perk of using QuickBooks for your bookkeeping. It also will collaborate easily with donor management systems, as well as help automate things. If you need a way to get paid for a speaking engagement, you can send invoices through QuickBooks and that’s a simple way to get paid for that. You can also track auctions or giveaways and those types of things, as well as recurring donations or for your specific event. You can really customize it to be how your organization is set up based on the types of things that you do to raise money and then use that money.
A big money saving tip for nonprofits using QuickBooks
Sign up with Tech Soup. This is an organization that supports nonprofits. They can give you incredible discounts for types of softwares in your non-profit. They have a deal with QuickBooks where you can get the highest level subscription for a fraction of the price. To get this, set up your subscription through Tech Soup, not directly from QuickBooks. Don’t sign up until you have your tech soup subscription and you get it through there. You do have to be a 501C3 in order to apply to be an organization with tech soup. That is something you have to have first. I definitely recommend going through them to get your subscription because it will save you a ton of money.
Once you have it set up, you want to be able to use it. And if QuickBooks feels overwhelming, you are not alone. There are multiple nonprofit owners that I have worked with and they have been able to use the tool. It’s a tool and all tools can be learned. My course Get Comfy with QuickBooks is still perfect for you.
We can customize just a few things in there so that you can have all of the information that you need to run your nonprofit and use QuickBooks for it all through the course. So go check that out. It is a very user friendly and fairly easy to use. And like we said, customizable so that it makes sense for your organization. You might not need all of the features that something like a QuickBooks tool will have, but I will tell you, it does look professional and because of that tech soup discount, you really can’t beat it.
The price is definitely worth it way better than trying to just use a spreadsheet. It really gives you something easy to present to your board of directors and your donors when you have the nice reports to be able to show them how you are managing the money. I definitely recommend it even early on in the beginning, even if you don’t think that you’re big enough, because it’s totally worth the professionalism that it gives your organization.
Is QuickBooks right for your organization?
If you’re not sure if QuickBooks is really right for you or your organization, book a call and let’s chat about it. I would love to help you think through what is necessary and needed in your organization. You can always sign up for a free trial. That is another way that you can see if the platform is right for you, just play around with it and see if it makes sense.
So to answer the question, yes, QuickBooks is still a great tool for non-profits. It doesn’t do everything. Most systems are not one size fits all, unfortunately, but it does play well with the other players. It is still great for nonprofits, no matter what your size or your goals or your resources. Especially with that tech soup discount.
Managing your nonprofit finances does not have to be overwhelming. It can be so simple and easy once you get that routine set up and flowing.
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