Receiving a cash gift at a for-profit

dawz007 · ‎April 06, 2022

If I may ask, when setting up the gift as a non-inventory item, do I check off "I sell" or "I purchase" this product /service? Both seem strange, but I'm assuming "I sell" would be my choice since it is just for record keeping? I am new to QB, so I apologize for my questions. But since there's no invoice needed, just categorize the payment received and then send a receipt? I know the gifter won't get a tax receipt for it, but they would still like a receipt for their expense. Also, is there any way for the gifter to send their gift through QBO the same way customers can pay their invoices through QBO? Am I setting up both an income account for these gifts AND an expense account for when it’s used, or it doesn’t matter how it’s used? Thanks for your time.

Rustler · ‎April 07, 2022

I would use a service item for this. Select a donations income account on the item. Use a sales receipt to receive the donation and give the donor the receipt.

Whether or not it matters how the donation is received depends on whether or not the donation is restricted to certain uses - you know that when receiving it. Just pay the amount and use whatever expense account you need to when making the payment

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Rainflurry · ‎April 07, 2022

@dawz007

Your subject line states this is a cash gift. Is that correct? A cash gift would just be deposited into your bank account and assigned to an 'other income' account. Other income is appropriate since the gift is still taxable income but it is not income from the operations of the business.

View solution in original post

Rustler · ‎April 07, 2022

I would use a service item for this. Select a donations income account on the item. Use a sales receipt to receive the donation and give the donor the receipt.

Whether or not it matters how the donation is received depends on whether or not the donation is restricted to certain uses - you know that when receiving it. Just pay the amount and use whatever expense account you need to when making the payment

Rainflurry · ‎April 07, 2022

@dawz007

Your subject line states this is a cash gift. Is that correct? A cash gift would just be deposited into your bank account and assigned to an 'other income' account. Other income is appropriate since the gift is still taxable income but it is not income from the operations of the business.

dawz007 · ‎April 07, 2022

I did set up an account in CoA as other income for “sponsorships” which is what he’s calling it, bronze, silver and gold tiers he’s got specific amounts for. I’ve set them up as non-inventory items that I sell to the other income account.

it is a cash gift, yes.

I cannot create an invoice which the gifter can then “pay” for online, though, correct? I just wait for them to send their gift in and then I can create a sales receipt to send them?

I really appreciate your input.

dawz007 · ‎April 07, 2022

Ok, I will change it from a non-inventory item to a service.

dawz007 · ‎April 08, 2022

Just to clarify. Because it’s not a sale, I cannot create an invoice which they can pay through QBO, correct? I’m just using a service to keep track of the money?

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Receiving a cash gift at a for-profit