Posting a Pledge - Defining the appropriate Product and Service

LCUUF · ‎March 21, 2025

We are a church and have and never have Invoicing except to handle Pledges - so in setting up QBO I am making the A/R account "Pledges".

I have set up Donors, Vendors, Chart of Accounts, and Classes.

My question is about Products and Services, because that drop-down must be entered to post an Invoice.

I have A/R in the Balance Sheet and Non-Profit Income:Pledge (Pledge is a sub-account) under the P&L (Incomes).

When I create a Product and Service called Pledge, what do I use for the "Income Account"???

This is confusing for me because the Invoice is a 'promise to pay', so I would have thought the Account to be used would be A/R...but I suspect that I want to use the above: Non-Profit Income:Pledge

Am I right?

Not expecting a class on Accounting here.

I really want to get this right. Thank you.

Rainflurry

@LCUUF

Anytime you create an invoice in QB, it automatically posts the invoice total to A/R with a corresponding amount to whatever account you choose under the 'Income account' for the product/service on the invoice. Those are the two sides of the debit/credit accounting entry. So, yes, you want to select your 'Non-Profit Income:Pledge' as the income account on your product/service. That way, when you create an invoice for, let's say $100 pledge, your A/R will increase by $100 and your income will increase by $100.

View solution in original post

Rainflurry

@LCUUF

Anytime you create an invoice in QB, it automatically posts the invoice total to A/R with a corresponding amount to whatever account you choose under the 'Income account' for the product/service on the invoice. Those are the two sides of the debit/credit accounting entry. So, yes, you want to select your 'Non-Profit Income:Pledge' as the income account on your product/service. That way, when you create an invoice for, let's say $100 pledge, your A/R will increase by $100 and your income will increase by $100.

LCUUF

I LOVE this website and all the help. Thank you!

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Posting a Pledge - Defining the appropriate Product and Service