How do I create a nonprofit's Statement of Functional Expenses? i.e. salaries, events, administrative costs, etc. allocated by programs, fundraising, and management?

Hi there, @elizabeth5.

As of posting, the Statement of Functional Expenses report for nonprofit organizations that itemizes expenses by function and program is unavailable. Nevertheless, we can set up QuickBooks Online (QBO) to generate this report. I'd be glad to show you how.

If you have set up your company to be non-profit and created corresponding accounts in COA for each type of expense (i.e., salaries, events, administrative costs, etc.), you can consider using the Class tracking feature to allocate each expense account by programs, fundraising, and management.

Here's how:
 

1. Go to the Gear icon, select Account and settings.
2. Click Advanced, then tap the Pencil icon in the Categories section to edit.
3. Turn on the Track classes and hit the Save button.
4. Click Done.

You'll see the Class field on relevant forms that lets you identify the class associated with different transactions.

Once done, consider customizing the Profit and Loss (or Statement of Activity) report in QBO to generate data for the Statement of Functional Expenses. For detailed guidance, refer to Steps 2 and 4 in this article: Fund Accounting for non-profits in QuickBooks Online.

If you need to export your report, you can visit this article for future reference: Export your reports to Excel from QuickBooks Online.

Let me know if you have any concerns about running an Expense report. I'd be happy to help.

There is no Categories section that I can edit under Advanced in Accounts and Settings. There are Product Categories and Classes under All Lists, but it looks like our version of QBO does not support Classes. What else can I try?

I appreciate the replication you've done to check the class tracking feature discussed by my colleague, Elizabeth. I'm here to discuss this situation further with you.

The class tracking feature is available in higher versions of QuickBooks Online (QBO) such as QBO Plus and Advance products. Therefore, if you're QBO subscription cannot find the said feature, and cannot perform the workaround recommended by my colleague. I suggest upgrading your account to a higher version to achieve the nonprofit's Statement of Functional Expenses report.

Here's how to upgrade:

1. On the Gear icon, choose Subscription and Billing.
2. Make sure your payment info is up to date.
3. In the QuickBooks Online section, choose Upgrade your plan.
4. Review the available plan that suits you, then select Choose plan.
5. Continue the on-screen steps to upgrade your plan.

Before doing so, consider looking into the pricing options website to find the subscription level that best fits your requirements: Plans & Pricing.

Additionally, these materials can be of help when generating reports in QBO:

• Run reports in QuickBooks Online
• Customize reports in QuickBooks Online

Don't hesitate to return to this thread if you have more questions about generating reports in QBO, Elizabeth. The Community is here 24/7 to respond to your query. Keep safe!