Running a nonprofit organization comes with its share of challenges. You not only need to secure funding and raise awareness for your cause but also maintain accurate financial records. Common accounting errors, such as incorrectly classifying employees and misreporting unrelated business income, can lead to hefty fines.
Public charities, for example, report significantly higher error rates compared to publicly traded corporations and similar-sized corporations. Errors of omission appear to be the most common.
One way to avoid these problems and keep your books in order year-round is to use accounting software. Consider switching to the QuickBooks Nonprofit Edition to track grants and donations, manage expenses, and generate reports.
Depending on your accounting needs, you may opt for QuickBooks Online, QuickBooks Enterprise Nonprofit Edition, or QuickBooks Premier.
Each option comes with its perks and has distinctive features. All plans are fully customizable and can be upgraded as your nonprofit grows.
Do you need QuickBooks for your charity? Does it offer any advantages over traditional accounting? Read on to find out!
How Does QuickBooks Work?
QuickBooks is an accounting software program designed for small and medium-sized businesses. It was developed by Intuit, the company behind TurboTax, ProConnect Tax Online, and other financial software.
Customers can sign up for industry-specific versions of QuickBooks, such as the QuickBooks Nonprofit Edition, the Manufacturing Edition, or the Contractor Edition. There are also dozens of other plans available in several versions.
QuickBooks Online, for example, features four versions: Simple Start, Essentials, Plus, and Advanced.
Simple Start, the basic version, enables users to easily track their income and expenses, invoice clients and accept payments, and manage contractors. The Advanced version offers more complex features, like inventory management, automated workflows, and business analytics.
With QuickBooks, users can create customized invoices and send them with a click of a button. The program also provides instant reports and keeps your financial data organized in one place. State and federal payroll taxes are automatically calculated, filed, and paid.
Compared to other accounting programs, QuickBooks is easier to use and customize. Most business owners manage it themselves or outsource this task to a bookkeeper. Startups and small companies can opt for a basic plan to cut expenses and upgrade as their business grows.
Why Use QuickBooks for Your Nonprofit Organization?
One of the primary advantages of using QuickBooks for your nonprofit is to avoid common accounting errors.
The lack of formal accounting procedures, which characterizes most charities, can result in hefty fines. Furthermore, many nonprofits fail to report unrelated business income correctly and distinguish between employees and independent contractors.
Data entry errors are common too. Even small mistakes, like entering a $200 payment as $100, can wreak havoc on your accounts.
Additionally, some nonprofits fail to assign the money coming in and going out of their organization to the appropriate categories.
Any of these mistakes can get you in trouble with the IRS. One option is to hire an accountant or bookkeeper. However, if you’re on a budget, you may not end up hiring one with little or no experience.
With QuickBooks, you don’t have to worry about these issues anymore.
This easy-to-use software program can help you manage your taxes, maintain accurate records, and keep your financial data safe. Plus, it has various built-in features that may help increase your work performance and efficiency.
Another advantage of using QuickBooks is that it updates often, making it easier to achieve compliance. It also supports multiple currencies, which allows you to easily track donations from almost everywhere in the world.
As mentioned earlier, nonprofit organizations can choose from several plans. Depending on your budget and accounting needs, consider the following options for your charity.
QuickBooks Nonprofit Edition
The QuickBooks Enterprise Nonprofit Edition is one of the few accounting solutions designed specifically for charities. In addition to the standard QuickBooks features, users have access to special tools for nonprofits.
These include but are not limited to:
- Nonprofit chart of accounts
- Donor and pledge forms
- Built-in templates
- Industry-specific reporting capabilities
- The ability to see contributions by grant or donor
- The ability to keep track of the largest donors
- Statements of financial position
- Customizable forms and reports
- Donor and grant reports
- Time-saving tools
The Nonprofit Edition is available in three versions. Each comes with different capabilities and features. Depending on your budget, you can register for a Silver, Gold, or Platinum plan.
All plans include advanced reporting, online backup data storage, automatic upgrades, and industry-specific editions.
If you sign up with Fourlane, you’ll get a free one-year subscription to online QuickBooks training courses. Furthermore, each version comes with a 60-day money-back guarantee, so you can request a refund if you decide to stop using the program.
The Gold plan provides more advanced payroll capabilities compared to the Silver plan. This version fills in the latest state and federal taxes and can track sick time, vacation time, retirement plans, and more.
In addition to these features, the Platinum edition offers advanced inventory tracking and pricing features.
If your nonprofit organization raises money by selling products, these capabilities will come in handy. You’ll find it easier to create and edit price rules, schedule promotions, set price levels by customer and item, and organize your inventory.
Accounting Is Easy with QuickBooks
As you see, the QuickBooks Nonprofit Edition provides everything you need to run your charity smoothly and avoid accounting errors. It is fully customizable and simplifies the most complex accounting tasks.
With QuickBooks, users can keep track of thousands of donors and vendors, secure their data, and create custom reports for each fundraising program. The software is easy to use, which eliminates the need to hire an accountant, especially if you’re running a small nonprofit organization.
Our team can set up QuickBooks for your nonprofit and help you choose a plan that best suits your needs. Contact us today to find the right solution for your charity or small business!