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Intuit
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Set up and record in-kind donations

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: Create an income account

  1. Go to the Accounting tab and select Chart of Accounts.
  2. Select New.
  3. In the Account dialog, select Income from the Account Type drop-down menu.
  4. From the Detail Type ▼ drop-down menu, select Non-Profit Income.
  5. Enter a name (for example, In-Kind Contributions) for the account.
  6. Select Save and Close.

Step 2: Create a clearing account

  1. Go to the Accounting tab and select Chart of Accounts.
  2. Select New.
  3. In the Account dialog, select Bank from the Account Type drop-down menu.
  4. From the Detail Type drop-down menu, select Checking.
  5. Enter a name (for example, In-Kind Clearing) for the account.
  6. Select Save and Close.

Step 3: 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, select the type of product or service.
  4. Add a Name and Description suitable for sales, pledge, or donation receipts.
  5. From the Income account drop-down menu, select the In-Kind Contributions income account you created.
  6. Under Purchasing information, select the I purchase this product/service from vendor checkbox.
  7. 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. Go to the Create ⨁ icon and select Sales Receipt.
  2. In the Customer field, enter the donor's name. If this is a new entry, enter the donor's name and then select Add and Save.
  3. Enter the Date of the donation.
  4. From the Deposit to ▼ drop-down menu, select the In-Kind Clearing bank account you created.
  5. Select the appropriate item from the drop-down menu of Product/Service column and add any additional Description.
  6. (Optional) Assign the Class associated with the donation.
  7. 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.
  8. Select Save and Close.

Step 2: Enter a bill

  1. Go to the Create ⨁ icon and select Bill.
  2. In the Vendor field, enter the donor’s name and add a period (.) or 1 after the name so the system will accept it. Select Add and Save.
  3. Under Item details, select the product or service you created from the drop-down menu.
  4. (Optional) Assign the same Class you assigned on the sales receipt.
  5. Select Save and Close.

Step 3: Mark the bill cleared

  1. Go to the Create ⨁ icon and select Pay bills.
  2. From the Payment account ▼ drop-down menu, select the clearing account.
  3. Select the checkbox of the bill you entered.
  4. Select Save and send.

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