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Set up and record in-kind donations in QuickBooks Online

SOLVEDby QuickBooksQuickBooks Online11Updated March 04, 2022

Find out how to set up and record in-kind donations in QuickBooks Online.

A service or asset, other than cash, is an in-kind donation. It can be printing services, office supplies, furniture, leased space, or professional services.

Note: Check with your accountant to find out whether a donation should be recorded in your books as an in-kind donation, and if you are unsure of what the Fair Market Value of a donation is.

Set up in-kind donations

To record an in-kind donation, you should set up an income and clearing account for charitable contributions, and create a product or service item for the donations.

Step 1: Check to see if you already have an in-kind donations account

To avoid creating duplicates, make sure you don’t already have a non-profit account to track in-kind donations.

  1. Go to Settings ⚙ and select Chart of accounts.
  2. In the Filter by name field, search for "In-kind donations".
  3. If you find an account named "In-kind donations”, then your chart of accounts is already set up. No need to create an in-kind donations account. You can skip to Step 3.

Step 2: Create an in-kind donations account

  1. Go to Settings ⚙ and select Chart of accounts.
  2. Select New.
  3. In the Account dialog, select Income from the Account Type dropdown menu.
  4. From the Detail Type ▼ dropdown menu, select Non-Profit Income.
  5. In the Name field, enter "In-kind donations".
  6. Select Save and Close.

Step 3: Create a clearing account

  1. Go to Settings ⚙ and select Chart of accounts.
  2. Select New.
  3. In the Account dialog, select Bank from the Account Type dropdown menu.
  4. From the Detail Type dropdown menu, select Chequing.
  5. Enter a name (for example, In-Kind Clearing) for the account.
  6. Select Save and Close.

Step 4: Create a product or service item

  1. Go to Settings ⚙ and select Products and services.
  2. Select New and then Service.
  3. In the Product/Service information panel, add a Name and Description suitable for sales, pledge, or donation receipts.
  4. From the Income account dropdown menu, select the In-kind donations income account you created.
  5. Under Purchasing information, select the I purchase this product/service from a supplier checkbox.
  6. Select Save and close.

Once the accounts are set up and the product or service item is created, you can begin to record in-kind donations.

Record in-kind donations

When you record an in-kind donation, enter a sales receipt and create a bill for the donation, then mark the bill as cleared.

Note: If you receive fixed assets (for example, vehicles, computers, or land) as an in-kind donation, use an expense or a fixed asset account on the bill. If you're not sure whether an item is a fixed asset, consult your accountant.

Step 1: Enter a sales receipt

  1. Select + New.
  2. Select Sales receipt.
  3. In the Customer field, enter the donor's name. If this is a new entry, enter the donor's name and then select + Add new and Save.
  4. In the Sales Receipt date field, enter the date of the donation.
  5. From the Deposit to ▼ dropdown menu, select the In-Kind Clearing bank account you created.
  6. Select the appropriate item from the dropdown menu of Product/Service column and add any additional Description.
  7. (Optional) Assign the Class associated with the donation.
  8. Enter the fair market value (FMV) of the donation in the Amount field.
    Note: Consult your accountant if you are unsure of the Fair Market Value of a donation.
  9. Select Save and close.

Step 2: Enter a bill

  1. Select + New.
  2. Select Bill.
  3. In the Supplier field, enter the donor’s name. If this is a new entry, enter the donor's name and then select + Add new and Save.
  4. Under Item details, select the product or service you created from the dropdown menu.
  5. (Optional) Assign the same Class you assigned on the sales receipt.
  6. Select Save and close.

Step 3: Mark the bill cleared

  1. Select + New.
  2. Select Pay bills.
  3. From the Payment account ▼ dropdown menu, select the In-Kind Clearing bank account you created earlier.
  4. Select the checkbox of the bill you entered.
  5. Select Save or Save and close.

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