As a non-profit, your business is a little different from private or government businesses. That probably translates to a need for more specific, targeted software when it comes to bookkeeping, right? Actually, not really. Quickbooks doesn’t discriminate. As with any other organizational structure, QuickBooks can make bookkeeping for a non-profit simpler. Let’s talk about how.
Non-Profit Bookkeeping vs. Profit Bookkeeping
Bookkeeping for a non-profit and for-profit bookkeeping do have some differences to keep in mind.
- Reporting: Whereas for profits often report financial statements to shareholders and investors, non-profits report to a governing body such as a board of directors.
- Tax exemption: If your bookkeeper handles taxes, which is more common in nonprofits that profits due to the higher cost of an accountant, they’ll deal with tax exemptions. For profits must pay income tax, for example, but nonprofits are exempt.
- Budget: Because profits are concerned more with profit, duh, they typically have more money and more flexibility with that money. Have you heard the mantra “spend money to make money?” It doesn’t apply to non-profits. Non-profits by nature are obsessed with cutting down on spending to ensure their livelihoods. In addition, much of their money comes from donations and grants.
As you can probably guess, these differences can change the way software is used for a nonprofit vs. a profit, but the changes are not vast and unwieldy. For, as many differences as there are between for profits and non-profits, there are an equal number of similarities.
Using QuickBooks as a Non-profit
Bearing the above differences in mind, what can you use QuickBooks for in bookkeeping for a non-profit? From the horse’s mouth:
- Nonprofit accounting: As with any organization with a bookkeeper, you’ll need to track expenses and funds. A software like QuickBooks automates this process.
- Tracking donations and grants: Grants and donations constitute a large part of a non-profits cash-flow. If you’ve got to make sure those donations are being put to good use or procure more funding, you’ll want a tool that makes this as easy as possible.
- Reporting: We talked about reporting for a non-profit before. What we didn’t mention is the volume of people that non-profits need to report to: boards, staff, funders, and the public. This is one of its strongest features, according to CPA Practice Advisor.
- Integrated tools: QuickBooks works well with all kinds of existing systems, allowing you to easily import and export data and much more.
The bottom line is that QuickBooks is a well-established, versatile tool that, while initially developed for more traditional for-profit organizations, now has all the capabilities to do the difficult bookkeeping work of a non-profit.
But There Are Free Softwares, Why Not Use Those?
Look, we can’t knock free software. We all love free stuff, especially when we’re on a tight budget. However, there are two things in particular we recommend not being cheap on when it comes to any organization, irrespective of whether they’re looking to do bookkeeping for non-profit or for-profit: people and software. Why? A lot of reasons: These two things do the vast majority of your work. Technology has always been man’s best friend when it comes to work, whether that technology be a neanderthal’s rock or a modern bookkeeper’s keyboard. So why then QuickBooks:
- It’s established. That’s good for a lot of reasons. Newer software has less documentation. Newer, freer software, even less than that typically. QuickBooks has a well established knowledge base and a support team. If your people are wasting their time trying to figure out their tool, you’re going to end up spending more money than if you’d simply bought one that’s easier to use.
- It’s cloud-based. Non-profit workers are always on the move. To be able to access their books at their fingertips is invaluable. Many free softwares don’t provide this option, and if they do, it’s a lower-quality version with a subscription fee that ultimately runs a comparable cost to QuickBooks. Yuck.
- Automation automation automation. Nonprofits are notoriously understaffed. Thankfully, QuickBooks might as well be another member of your staff. Much of what you do in QuickBooks is automated, and with the right people using the tool, it can basically seem like magic.
- Bug-free. Related to the fact that it’s established, QuickBooks is largely bug free. Although every software has bugs, QuickBooks is notoriously clean and professional. Since it has a good team working on it as well, you can rest assured any bugs you do find will be squashed quickly.
Now I say don’t go “cheap” on software, but that doesn’t really mean QuickBooks is expensive. On the contrary, it’s pretty cheap. The simple version of QuickBooks Nonprofit Edition is only $10.00/month. You’ll personally spend more on a single movie ticket in some places.
QuickBooks is a powerful software that can help non-profits on a budget do the work of a much larger organization. We wouldn’t recommend any other program. If you’re a small non-profit, you might want to know how much bookkeeping you can do yourself. We’ve got an answer for that too. Check it out.