Nonprofit accounting for purchases made on our behalf

champslegacy

We frequently have purchases that are made on our behalf which in theory would be reimbursable, but the individual wants to treat it as a donation.

It doesn't seem right to treat it as an 'in-kind' donation of goods as we have a receipt for the exact amount of the purchase on our behalf. Ideally, I would like to record it as an expense for the non-profit offset by the donation.

What is the best way to handle those transactions? Do I simply debit they appropriate expense account and credit a donation revenue account?

Samd

Hey @champslegacy - I think your suggestion is the best option in terms of making a journal transaction. I think I would suggest the reverse however. First you'd want to create the income transaction into your donation revenue account, and then generate the journal transaction. To decrease the expense account you'd actually want to credit the value, and debit the donation revenue account.