How to record a charitable donation through a payroll deduction (ADP) - QuickBooks desktop for Non-profits

Little Lights · ‎October 17, 2023

Good day,

I have a question about entering charitable donations made through payroll by the employees. ADP is processing our payroll. The amounts withheld will remain in our business bank account, and we will be issuing a check to the donation fund.

What is the proper way to record it in the QuickBooks desktop version?

Please help!

Rainflurry · ‎October 17, 2023

@Little Lights

Are you making a journal entry to record payroll? If so, the amount that will be donated should be recorded as a credit to a liability account instead of the usual credit to your bank account. Set up a liability account called 'Due to XYZ Charity' or something similar. When you issue the check for the charitable donation, assign the same liability account to the check that you used on the journal entry. That will zero out the liability account.

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ReymondO · ‎October 17, 2023

Thanks for reaching out to QuickBooks Community, @Little Lights. I'd be glad to help you record these transactions inside QuickBooks Desktop.

To record the donation made by your employee, you can create a journal entry. To ensure you're using the correct affecting accounts, I'd suggest getting in touch with your accountant. They can provide you with the right guidance to ensure your books are accurate.

Here's how to record a journal entry:

Go to the Company menu and click Make General Journal Entries.
Fill out the fields to create your journal entry. Make sure your debits equal your credits when you’re done.
Select Save or Save & Close.

When you're done, you can create a check to deposit in your donation fund.

You can also check out this article as a reference for creating accounts in QuickBooks: Learn about the chart of accounts in QuickBooks.

If you have other questions about recording your transactions, simply click the Reply button and add a comment below. I'll be right here to provide additional assistance. Wishing you and your business all the best!

Rainflurry · ‎October 17, 2023

@Little Lights

Are you making a journal entry to record payroll? If so, the amount that will be donated should be recorded as a credit to a liability account instead of the usual credit to your bank account. Set up a liability account called 'Due to XYZ Charity' or something similar. When you issue the check for the charitable donation, assign the same liability account to the check that you used on the journal entry. That will zero out the liability account.

Little Lights · ‎October 18, 2023

Yes, I do record payroll using journal entries. Thank you so much for your help!

Little Lights · ‎October 18, 2023

thank you~

FritzF · ‎October 23, 2023

Hi, Rainflurry.

I appreciate you for always sharing your knowledge about QuickBooks. This will definitely help other users as well in the future. Please keep on posting here in the Community.

Stay safe and have a great rest of the day.

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How to record a charitable donation through a payroll deduction (ADP) - QuickBooks desktop for Non-profits