How To Set Up NonProfit Organization In QuickBook?

where is the nonprofit menu in QuickBooks

QuickBooks is among the most renowned accounting software options on the market, but it offers the “one size can fit all” approach that causes some challenges when it is about nonprofit accounting. It is fairly simple to use and still offers many relevant features for nonprofit bookkeeping. The program is ideal to cut the time spent on the books and also complies with the vast reporting needs of Non-Profits Organizations (NPOs) and Non-Governmental Organizations (NGOs). The powerful and intuitive financial reporting and accounting system handles complex tasks like inputting, tracking, maintaining and reporting financial data in detail. 

The article also offers some essential information about QuickBooks for Nonprofits, and discusses a few shortcomings. Additionally, users know, where is the nonprofit menu in QuickBooks, and offers a step-by-step approach for configuring the requirements of your organization. 

About QuickBooks For Nonprofits

Intuit designed the QuickBooks for Nonprofits, this version of the software addresses accounting requirements of nonprofit organizations. Unfortunately, the design is not suitable to handle fund accounting with most transactions for nonprofit. where is the nonprofit menu in QuickBooks

Some QuickBooks For Nonprofits Limitations

A large part of QuickBooks popularity is attributable to the reputation of being simple and using and the general affordability for businesses. However, the requirements for accounting for nonprofit organizations are different from those of businesses, and all the differences are quite apparent while they’re thinking of performing various nonprofit tasks.

Some common struggles when it comes to Nonprofit included difficulty to make an accounts chart, trouble setting up automatic allocations for certain programs, low flexibility when it is about reports, and the absence of accounting processes for general fund.

Configuring Nonprofit Organization Account

If the process to configure QuickBooks Online is tedious, it is possible to accomplish the same. The steps are further broken down into two parts for setting the QuickBooks for nonprofit usage:

Task 1 –  Setting Up The Company Type For Reflecting Nonprofit

For having QuickBooks setup for using IRS Form 990, it is necessary for configuring the tax form and the type of company to recognize the organization as a nonprofit one. Here is the process to do it:

  • Click on the icon Settings
  • Choose the option “Account and Settings”
  • Choose the option “Advanced”
  • Under the Type of company, choose pencil icon for editing
  • Choose the option “Save”
  • Click on the option “Done”

Task 2 – For Configuring Customer Label Settings To Donors

As QuickBooks was made for business accounting, the default label to report and forms is set for Customers. There are some vital steps for changing them to Donors:

  • Click on Settings icon
  • Select the option “Account and Settings”
  • Click on the option “Advanced”
  • Choose the dropdown menu Customer Label and select the option “Donors”
  • Click on the option “Save”
  • Click “Done”

A Better Way of Setting Up And Managing Nonprofit Accounting

As it is possible to see the above listed steps, setting up QuickBooks accounts for tracking donations and organization’s transactions are quite challenging. Fortunately, a better way lies for addressing nonprofit requirements and users can know how to set up a nonprofit organization in QuickBooks.

Many nonprofit organizations depend on QuickBooks for their accounting requirements and handling their causes and needs. Users can easily manage and fund sources, track the donations and donors, and make the chart of accounts, generate custom reports and produce a detailed fiscal year budget.

Some Basics About Customizing Quickbooks For Nonprofits

Nonprofits use cloud accounting Quickbooks version, Quickbooks Online, or standalone Quickbooks software. There are simple step-by-step instructions to approach and customize programs for suiting the needs of nonprofit organizations. However, it is possible to accomplish the same by only a few clicks:

  • From the “company industry” drop down list, choose the option “Nonprofit.”
  • From “company type,” drop down list, again choose the option “Nonprofit.”

With the action, you rename various items of the basic menu for better suiting accounting and bookkeeping functions of the nonprofit organizations. For example, the menu item “customer” is renamed “donor;” the “profit and loss” menu item is changed with the “statement of activity.”

All the aforementioned changes with other changes in menu items are also edited or done later. For example, the newly renamed menu item “statement of activity” can also be amended to “statement of financial actions.”

Further QuickBooks Nonprofits Customization

There are various ways through which nonprofits organizations are able to customize QuickBooks for better tracking, compiling and facilitating data. A common step is also categorizing clients, donors and nonprofit members after organizing by location, type or certain offered services for the clients and the organization. Additionally, most nonprofits, mainly the ones extensively depending on volunteer work, can often find it helpful for separately tracking volunteers after entering them under the menu item “other names list”.

You must pay special attention while you deal with non-monetary donations like services or goods must be recorded at fair value at the receipt value, as either the inventory or the revenue. You must also record the donated services as revenue, at the relative value to anything that would cost the nonprofits to buy such services. The best way to record the donated services and goods are Journal entries. 

A particularly helpful QuickBooks feature for activating is audit trail. Turning on audit trials can track all the data changes and transactions. It also shows the individual entering data changes or transactions, helping for protection of the organization’s data integrity. 

With the proper categorizing and entering various transactions including grants, donations, program activity and donations, clients help the nonprofit for easily create a full database. It is also helpful for generating vital reports for the donors or management or the organization for tax purposes. In addition, all reports are well-customized for suiting a certain purpose. 

Some QuickBooks NonProfits Tips

They need passwords:– All users are required to have a unique password for accessing QuickBooks. It helps in prevention of any unauthorized access to the financial information of the organization. 

Set Up Budget: Most the nonprofit organizations work on annual budgets. It is simple to set these inside QuickBooks with the projected expenses and revenue at the year’s beginning. With a particular budget entered into QuickBooks it means that it is simple to make a comparison budget with the actual one throughout the year to evaluate the performance of the organization. 

Turning On Audit Trial: The feature of audit trail can keep a little track of entered transactions and all the vital changes, and the people changing it. The feature can offer added controls with protection for the data of the organization. You can consider using the accounts on the profit and loss statement to mirror Form 990. It facilitates tax form preparation. 

Setting Up QuickBooks Nonprofit Organization

As a user it is normal to get confused about can I set up a nonprofit in quickbooks. You would have to follow the below mentioned steps:

  • Login to the QuickBooks software
  • On the navigation bar top, tab files and click on the option “New Company File”.
  • You’ll need a new window, from there on you would need to choose the option Advanced setup. 

Also enter important journal details about the Non-profit organization, such as:

  • Name,
  • Address,
  • Basic contact details
  • Tax ID etc.

After providing all the info, now you would have to choose the “NonProfit” radio button and click on the option next.

  • In the next window, you would have to choose a fiscal year. 
  • Choose the suitable option from the drop-down menu and click the next button.
  • Now out in the domain details and password. 
  • It helps in safeguarding company people and files without passwords wouldn’t have its access. 

For the following windows, you’ll get a query as a simple yes or a no. Choose the suitable option and then click on the next button. 

  • There it says make a Chart of Accounts, you would have to choose the date from when you’re your transactions for tracking. 
  • For the next window, click on the step tab and click on the “Start working tab”. 
  • Now you need to navigate: Edit>Preferences> Accounting> Company preferences.
  • Here you need to check boxes that correspond to class tracking and account number.
  • For further reports check mark boxes correspond use the account number and class tracking.
  • For the automatic reports you would have to click on the “automatically refresh” tab under the tab graphs and reports. 

After following the above provided steps as they’re listed, the company file for nonprofit organization would start functioning in QuickBooks, 

Track Nonprofit Information On QuickBooks

Enter the donors, clients and members of the organizations: Job List” field so it is possible to keep  track of the information. Users can add up custom fields in the “Additional Info” tab for tracking any data with meaning. They must keep updated address information so it is possible to track vital donor information and generate letters. 

The nonprofit organizations find it handy for tracking and reporting donors, members and clients through their type. For example, they might think of tracking the member or contributor type, clients and donors according to their type. For instance, users can think of tracking the member or contributor type (donor, sponsor, subscriber or patron); contributor or member information, represented industry by member or donor; or the service type offered to clients. It is possible to print labels, reports and summary statements through the type of customer. 

Volunteer tracking for nonprofit organizations is also vital for nonprofits, which relies on the additional help. Separate tracking should be done for donors, clients and members, which is possible to do after inputting their information in the list “Other names.” Volunteers who are listed already as donors, clients or members would need a name input with variation (for example, John Smith “Member” versus the John Smith “Volunteer”). A notes option would also be available for tracking and recording information about volunteers. 

Recording Additional Quickbooks Donations

Nonprofit organizations getting financial donations that aren’t invoiced would enter them in QuickBooks either as a cash sale or a deposit. However, the deposits don’t allow users for item tracking (the account is entered rather than the item) or generate cash receipt. However, such donations generally should not enter as cash sales. 

Additionally, to the monetary contributions, nonprofits often get donated services and goods. Donated goods must be recorded as revenue and as expense or inventory (whichever seems fine) at the fair value at the time when you receive them. You must record the donated services at the fair value when the services make or enhance nonfinancial assets or can also involve special skills offered by entities having such skills – that you would be able to buy when no donation is present. 

Additionally, the process to enter donations in quickbooks nonprofits helps in putting together things by making the recording process easy. 


Noting journal entries is among the best methods to record donated services and goods. However, you must be sure about recording the pledges or promissory notes to have a record of all your planned donations. Recording QuickBooks pledges can vary based on whether the organization keeps the accounting records or the cash basis or accrual of accounting. The steps seen above are helpful to set up where is the nonprofit menu in QuickBooks. 

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