I attended a quickbooks bookkeeping workshop by Karen Schiller at Compasspoint www.compasspoint.org recently, it was very helpful.

Here are some helpful tips that I took away from the workshop:

1. When recording classes in Quickbooks you don’t have to record classes with asset or liability accounts.

2. Membership is a support service defined by the IRS.

3. Administration (or Management and General) expenses include: Bank Charges, Legal Fees, Accounting Fees, General overview of time spend managing the organization, and time spent negotiating govt. contracts.

4. Direct costs are those costs that are directly attributable to a program or support service, for example, supplies purchased specifically for Aspiration’s eAdvocacy training.

5. Indirect cost (these are the costs that are recorded in the shared costs class and then are allocated into program and support expenses) examples include: utilities, rent, copier, and supplies.

6. Do report fundraising costs because the IRS looks at this.

7. There are several methods for allocating shared costs. 
  a. Bottom Line allocation method-where shared costs are lumped together then allocated across program and support expenses.
  b. Case by Case allocation method – where shared costs are allocated separately on each expense line.

8. When funder states they will pay a % of indirect costs they usually mean they will pay a % of admin costs not actually shared costs.

9. An organization can receive a contribution in the form of office space/electricity/telephones, where the donor still generally owns the asset. This should be recorded as income when the contribution is received and expense when the utilities or building is used.

10. At the end of each fiscal year break out Restricted and Unrestricted contributions. However be tracking Restricted and Unrestricted contributions on a monthly basis.

11. A Newsletter is totally a fundraising cost unless it meets some program requirements or criteria.
  a. The audience must be selected for the newsletter not because they can give money, but because they can participate and benefit from the services.
  b. The action in the newsletter should benefit the recipient and/or society.

12. For event sponsors, if they are giving a lot more than getting back they are considered they are considered contributors.

13. For event attendees, only a percentage of the event ticket is tax deductible. For example-for an event that has a meal 70% goes to the cost of the meal, and 30% is a donation.

14. For reciprocal transactions where each party receives assets of approximately equal value. For example advertising income earned from the placement of advertisements in the monthly journal published by the organization.

15. Registration fees are recorded as deferred income until event occurs.

16. Don’t forget to do year end journal entries for net assets ­and separate out Restricted and Unrestricted Contributions in the balance sheet.

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