Newbie. Using wave for Non-profit. How to record DONATIONS?
VonG
Member Posts: 7
I am not sure what the problem is, all accounting software seem to struggle with how to handle donations. They want you to create an invoice to receive a payment, whereas donations are not invoice driven. Donations just show up, no invoice, no services rendered, no products sold, and account software seem to not be to understand this. It is essentially a Push to Pull system. You Push out an invoice to Pull in some money.
In QuickBooks, you have to enter a donation as a Sales Receipt and list Charitable Contribution as the product. I can find no way to "Recieve" a donation Wave. In Wave, how do you Receive a donation from a donor, and allocate that donation to that donor, so that later at the end of the year you can create a Giving Statement that shows all of their donations for the year?
Comments
how to record donated food to non profit organization?
Hey there @reem
Because this donated food does not exactly have a value to it unless you assign it, this is a bit difficult to track since Wave does not have a method of tracking charitable donations that aren't monetary. Hopefully an accountant can chime in here with some better advice! Take care.
I also need to log a straight monetary donation like VonG asked, but I don't see an answer to that question. How do we log a simple monetary donation to our nonprofit? Thank you.
Hey @SteveA
Wave doesn't really have a proper way of managing donations, but what if you created separate equity accounts for each one of your donations? Then you can create an income transaction in your transactions page but categorize it as donation from John. Or if you didn't want to record this to granularly you could just have a donations equity account. This is something I would check in with a CPA about however to ensure that it wouldn't affect your end of your year tax time.
Hello to all,
I'm an accountant and I've worked with a number of NFP clients, including ones that were using Wave. This really isn't that hard. When setting up the CoA, you'll establish income accounts for all your income streams. For donations, I'd suggest the following: Corporate donations, Individual donations & In-Kind donations. When a cash donation is received, the entry is a debit to the cash account and a credit to the appropriate income account... the name of the donor would go in the Description field (whether the transaction is entered manually or was uploaded as part of the bank feed).
For in-kind donations, the debit is to an appropriate expense account. Whether the donor contributes services or a tangible product (such as food), the NFP will have to assign a FMV to whatever is received... that FMV determines the amount for the JE.
I typically give my NFP clients a discount from my standard rate. However, I invoice at the full amount. When the client pays me, they'll post a credit to cash to clear the portion of my invoice that they'll actually pay. They'll then post a credit to A/P clearing for the remaining invoice balance and then transfer the amount in A/P clearing via JE to In-Kind Donations. The foregoing may seem a bit convoluted but the purpose is to get on their books the actual FMV of the accounting services I've provided.
I'm confused. I'm trying to use Wave Accounting for a church. You are saying that every single donation (i.e. weekly offerings), you make JE for? There isn't a sales receipt button as in QBO? Isn't this time consuming and clumsy to mess with debits and credits? You said you can do it in all the transactions that are downloaded from a bank?
I appreciate all your questions and answers. My question to Magicwill... your solution is pretty straight forward but with your suggestion, how do I then make an annual report for my donors? One cannot make separate annual reports from a description box. I set up separate income accounts for each individual which is fairly simple because we have a small congregation but any annual report doesn't look official.
Sorry for the delay in responding. I rarely check my Gmail account as I only use it for sending Wave invoices. I'm afraid I don't have a workable solution for your donor report problem. I was asked by the rector and treasurer of my church for assistance with this same problem and I unfortunately concluded that Wave just wouldn't work. You're right that Wave can't produce the sort of giving statement you'd want.
There are specialized accounting software platforms designed for non-profit, faith-based organizations but I can't make any specific recommendations.