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molbrez
Level 2

How to record when a donor pays a bill for a nonprofit?

I do the books for a nonprofit that is just getting started.  A donor has offered to pay some start-up bills directly - not items, but things like the rent, the building cleaning services.  These are things that the organization will have to pay itself in the future, so I want the vendors and expenditures to show up so that we can easily budget for these expenses in the future.  This seems like it should be treated differently than an in-kind service donation (since the donor is not the one cleaning the carpets), or an in-kind item donation (different than I would record it if a donor brings over office supplies).  What's the best way to deal with this type of donation?  

Solved
Best answer February 25, 2021

Best Answers
JasroV
QuickBooks Team

How to record when a donor pays a bill for a nonprofit?

Thanks for getting back to us and for sharing some clarifications, @molbrez.

 

You can record the bill payment using check as the payment method. Then use a clearing account in paying the bills. Let me show you how.

 

  1. Go to the Vendors menu
  2. Click Pay Bills.
  3. Select the checkboxes of the bills you want to pay from the table.
  4. Enter the date you paid the bill.
  5. Select the payment method as Check.
  6. From the Account drop-down menu, select the clearing account1.PNG
  7. Then select Pay Selected Bills.

 

You can also check this article for more details: Pay bills in QuickBooks Desktop.

 

I’d also recommend working with your accountant for additional guidance and advice. This way, we can ensure your accounts stays accurate after recording this. If you’re not affiliated with one, you can visit our ProAdvisor page and we’ll help you find one from there.

 

I’ve also added these links that you can read for your future reference in managing your transactions and accounts:

 

 

Tag me in your reply if you have other concerns or questions about recording transactions in your software. I’ll be more than happy to work with you again. Keep safe!

View solution in original post

4 Comments 4
katherinejoyceO
QuickBooks Team

How to record when a donor pays a bill for a nonprofit?

Hi there, @molbrez.

 

Thanks for posting your concerns here in the Community. I'm here to help you record bills paid by a donor for your nonprofit business. 

 

First off, you'll have to set up the donors as customers in the Customer Center to track the fund donations and donated items. Here's how:

 

  1. Go to the Customers menu, then select Customer Center.
  2. At the top of the Customer Center, click the New Customer & Job drop-down arrow and select New Customer.
  3. Enter the needed details and click OK to save.

 

To record the donation, you can create a sales receipt. Here's how: 

 

  1. Go to the Customers menu, then select Create Sales Receipts/Enter Sales Receipts.
  2. From the Customer: Job drop-down, select a customer or job. If the customer is not on the list yet, you can click Add New.
  3. Fill in the relevant information at the top of the form like the Date and Sale No, then choose the payment method.
  4. In the detail area, select the item(s) you propose to do or include as a sale.
  5. Click Save & Close.

 

Once done, you can now follow the steps to pay the bills in QuickBooks Desktop

 

Lastly, you can consult with your account so you'll be guided accurately in tracking your donations.

 

For more insights about managing your transactions, you can read through these articles:

 

Leave a comment below if you have more questions. I', always around to help.

molbrez
Level 2

How to record when a donor pays a bill for a nonprofit?

Hi @katherinejoyceO - thanks for your advice. It sounds like you’re advising just entering the funds used to pay the bill as cash donation? And then recording payment of the bill - using what kind of payment method? In this case the donor is actually writing a check directly to the vendor. 

molbrez
Level 2

How to record when a donor pays a bill for a nonprofit?

Thanks for your direction, @katherinejoyceO . It sounds like you’re advising entering the bill to be paid, recording  the amount used to pay the bill as a cash donation, and then entering bill payment - through what method?

To clarify:  In this case, the donor is writing their personal checks directly to the vendor, so the dollars are not actually  moving through the organization. 

 

Thanks!

JasroV
QuickBooks Team

How to record when a donor pays a bill for a nonprofit?

Thanks for getting back to us and for sharing some clarifications, @molbrez.

 

You can record the bill payment using check as the payment method. Then use a clearing account in paying the bills. Let me show you how.

 

  1. Go to the Vendors menu
  2. Click Pay Bills.
  3. Select the checkboxes of the bills you want to pay from the table.
  4. Enter the date you paid the bill.
  5. Select the payment method as Check.
  6. From the Account drop-down menu, select the clearing account1.PNG
  7. Then select Pay Selected Bills.

 

You can also check this article for more details: Pay bills in QuickBooks Desktop.

 

I’d also recommend working with your accountant for additional guidance and advice. This way, we can ensure your accounts stays accurate after recording this. If you’re not affiliated with one, you can visit our ProAdvisor page and we’ll help you find one from there.

 

I’ve also added these links that you can read for your future reference in managing your transactions and accounts:

 

 

Tag me in your reply if you have other concerns or questions about recording transactions in your software. I’ll be more than happy to work with you again. Keep safe!

View solution in original post

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