Sold in kind donation (non-profit)

I know the best way to record sold in-kind gift certificates sold in QuickBooks Online, @mbgiffin.

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.

Once done, to record an in-kind donation, enter a sales receipt and create a bill for the donation, then mark the bill as cleared. Let me show you how: 

Enter a sales receipt:

1. Go to the + New button.
2. Choose Sales Receipt.
3. In the Customer field, enter the donor's name. 
4. Enter the Date of the donation.
5. From the Deposit to ▼ drop-down menu, click the In-Kind Clearing bank account you created.
6. Select the appropriate item from the ▼ drop-down menu of the Product/Service column and add any additional Description.
7. Assign the Class associated with the donation. (Optional) 
8. Enter the fair market value (FMV) of the donation in the Amount field. (Consult your accountant if you are unsure of the Fair Market Value of a donation.)
9. Once done, click Save and Close.

The next step is to enter a bill:

1. Click the + New button and then choose 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. Click Add and Save.
3. Under Item details, select the product or service you created from the ▼ drop-down menu.
4. Assign the same Class you assigned on the sales receipt. (Optional) 
5. Select Save and Close.

Lastly, mark the bill cleared:

1. Choose + New and select Pay Bills.
2. From the Payment account ▼ drop-down menu, select the clearing account.
3. Click the checkbox of the bill you entered.
4. Choose Save and send.

When it comes to selling in-kind gift certificates received, I highly suggest reaching an accountant. This is to make sure everything is recorded accurately in your book. 

For more details, you may also check this article to serve as your guide: Sell and redeem gift cards or certificates in QuickBooks Online.

Feel at ease to let me know if you have other QuickBooks concerns. I'll get back to you as soon as I can. Keep safe and have a blissful day.

Hi, @mbgiffin.

Hope you’re doing great. I wanted to see how everything is going about your concern in recording sold in-kind gift certificates sold you had the other day. Was it resolved? Do you need any additional help or clarification? If you do, just let me know. I’d be happy to help you at any time.

Looking forward to your reply. Have a pleasant day ahead!

On the same vein; what is the correct way to show in-kind donated items on hand that will be used in the future for auctions? How do we show and keep track of items we still have in QBO? 

Hi, mbgiffin.

I've got you covered. I'm chiming in to help you record the on-hand donated items in QuickBooks Online (QBO).

When recording the items, we need to set up an income and clearing account for charitable contributions. Then, create a product or service item to add them to QBO.

First, I suggest checking if the in-kind donation account is already set up in QBO. It'll help avoid duplicates. Here's how:

1. Go to Transactions and select Chart of accounts.
2. In the Filter by name field or numb, search for In-kind donations.

If it shows in the list, then it's already set up. Otherwise, follow the steps below to create one. Beforehand, make sure you’re in the Accountant's view:

1. From Transactions, select Chart of accounts.
2. Click New.
3. In the New account panel, choose Income or Revenue from the Save account under drop-down menu.
4. From the Tax form section drop-down list, add Non-Profit Income or Non-Profit Revenue.
5. In the Account name field, enter In-kind donations.
6. Hit Save.

Then, create a clearing account:

1. In the Chart of accounts page, click New. Then, New account.
2. Select the Save account under drop-down menu and choose Bank Accounts.
3. On the Tax form section drop-down list, hit Checking.
4. Enter a name.
5. In the Starting date and opening balance section, add a starting date and opening balance for the account. The opening balance can be $0.
6. Click Save.

After that, we can now track the items in QBO:

1. Go to Customers and select Products & services.
2. Click New, then Service.
3. In the Product/Service information panel, enter a Name and Description.
4. From the Income account drop-down menu, add the In-kind donations income account you created.
5. Under Purchasing information, choose the I purchase this product/service from a vendor checkbox.
6. Hit Save and close.

For more details about the process, please see this article: Set up and record in-kind donations in QuickBooks Online.

Once done, you can begin to track the in-kind donations by following the steps above. Also, you can reach out to your accountant to determine to record everything in your books and help you verify the Fair Market Value.

Please feel free to keep me posted anytime if you require further assistance with the process in QBO. My goal is to ensure that you achieve your desired outcomes with bookkeeping. Take care and stay safe!

I've gone through these steps to track in kind donations.  Where I'm currently stuck is when donations are received the donor gives us a fair market value (FMV) for the donation.  The items were sold as part of a silent auction.  How do you record the sale and account for the sale price being less than or more than the FMV?

Hi there, @dshatto.

It seems that you have posted a similar post that one of my colleagues has responded to already. I suggest going to that post to read the appropriate response. You can refer to this link: Re: Sold in-kind donation (non-profit).

Let me know if you still have questions about the donations you receive. Have a great day, and take care always.