QUICKBOOKS GAAP FOR NON-PROFIT COMPLIANCE TRANSITION TRAINING
Transitioning Fathers On A Mission (FOAM) to a GAP-aligned accounting model in QuickBooks Online (QBO) requires clear delineation of roles and responsibilities. Below is a structured guide detailing each role, their primary responsibilities, and step-by-step instructions to execute these tasks within QBO. Where applicable, video tutorials are provided for enhanced understanding.
1. Program Manager
Primary Responsibilities:
• Grant Management: Oversee and manage grants to ensure compliance with donor requirements. • Expense Coding: Ensure accurate coding of program expenses to appropriate accounts or classes.
Steps to Implement in QBO:
1. Set Up Classes for Each Program/Grant:
o Navigate to the Gear Icon > Account and Settings > Advanced > Categories . o Enable Track classes and click Save . o Go to the Gear Icon > All Lists > Classes > New . o Create a class for each program or grant (e.g., "Youth Outreach Program" or "Grant A"). 2. Assign Expenses to Classes: o When entering transactions (e.g., expenses or bills), select the appropriate class to ensure accurate tracking.
Video Tutorial: How to setup classes in Quickbooks Online
2. Accountant
Primary Responsibilities:
• Data Entry: Record daily financial transactions, including income and expenses. • Bank Reconciliations: Regularly reconcile bank statements to ensure accuracy. • Report Generation: Produce financial reports for internal and external stakeholders.
Steps to Implement in QBO:
1. Record Daily Transactions:
o For income: Navigate to Sales > Invoices or Sales Receipts . o For expenses: Go to Expenses > New Transaction > Expense or Bill . o Connect bank accounts via Banking > Link Account . o Regularly match imported bank transactions with existing QBO records. o Navigate to Accounting > Reconcile to perform monthly reconciliations.
2. Perform Bank Reconciliation:
Video Tutorial: How to Reconcile in QuickBooks Online 2023
3. Treasurer / CFO
Primary Responsibilities:
• Monthly Financial Review: Analyze financial statements to assess the organization's financial health. • Approve Significant Journal Entries: Review and approve journal entries exceeding a predetermined threshold.
Steps to Implement in QBO:
1. Review Financial Reports:
o Navigate to Reports . o Generate key reports such as the Profit and Loss Statement , Balance Sheet , and Statement of Cash Flows . 2. Approve Journal Entries: o Go to + New > Journal Entry . o Review entries for accuracy and ensure they meet approval criteria before saving. Video Tutorial: Understanding Profit & Loss in QuickBooks Online ht
4. Executive Director
Primary Responsibilities:
• Budget Approval: Provide final approval for organizational budgets. • Policy Oversight: Ensure financial policies are up-to-date and compliant with regulations.
Steps to Implement in QBO:
1. Review and Approve Budgets:
o Navigate to Gear Icon > Budgeting . o Review proposed budgets and approve or request modifications as necessary.
2. Oversee Financial Policies:
o Ensure internal controls are implemented within QBO, such as user permissions and approval workflows.
Video Tutorial: 5 Must Have in QuickBooks for a non profit
5. Board of Directors
Primary Responsibilities:
• Financial Oversight: Periodically review financial statements to ensure fiscal responsibility. • Policy Approval: Approve major financial policies and organizational changes.
Steps to Implement in QBO:
1. Access Financial Reports: o Ensure board members have view-only access to QBO or are provided with regular financial report exports. 2. Review and Approve Policies: o Participate in meetings where financial policies are discussed and provide approvals as needed. Video Tutorial: QuickBooks Online How to customize reports for your non profit
By clearly defining these roles and providing step-by-step instructions within QBO, FOAM can ensure a smooth transition to a GAP-aligned accounting system, promoting accuracy, transparency, and compliance in its financial operations.
Defining Roles & Responsibilities in QuickBooks Online (QBO) for FOAM
Purpose: This section outlines the key roles within Fathers On A Mission (FOAM) and their financial responsibilities in QuickBooks Online (QBO). Each role includes step-by-step instructions for executing key tasks, along with verified video tutorials for guidance.
1. Program Manager
Primary Responsibilities:
✔ Oversees grant management to ensure compliance with donor requirements. ✔ Ensures correct coding of program expenses to align with GAP and grant guidelines.
Steps to Implement in QBO:
1 ⃣ Track Grants & Restricted Funds Using Classes
• Click Gear Icon > Account and Settings > Advanced . • Enable Track Classes and click Save . • Go to Gear Icon > All Lists > Classes > New , then create a class for each grant/program.
2 ⃣ Assign Expenses to the Correct Class
• When entering an expense ( + New > Expense ), select the relevant Class to ensure proper tracking.
📺 Video Tutorial: 🎥 How to Use Classes in QuickBooks Online (~7 min)
2. Accountant
Primary Responsibilities:
✔ Manages daily financial transactions (income, expenses, donations, and invoices). ✔ Performs bank reconciliations to ensure financial accuracy. ✔ Generates key financial reports for internal use and grant compliance.
Steps to Implement in QBO:
1 ⃣ Record Daily Transactions
• For income : Navigate to Sales > Invoices or Sales Receipts . • For expenses : Go to Expenses > New Transaction > Expense/Bill .
2 ⃣ Perform Bank Reconciliations
• Go to Banking > Reconcile to match transactions. • Use Bank Feeds to import and categorize expenses automatically.
📺 Video Tutorial: 🎥 How to Reconcile in QuickBooks Online (~14 min)
3. Treasurer / CFO
Primary Responsibilities:
✔ Reviews monthly financial reports to ensure accuracy and compliance. ✔ Approves journal entries over a set financial threshold. ✔ Conducts financial analysis to assess sustainability.
Steps to Implement in QBO:
1 ⃣ Review & Analyze Financial Reports
Go to Reports and generate:
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o Profit & Loss Statement o Balance Sheet o Statement of Cash Flows
2 ⃣ Approve Large Journal Entries
• Navigate to + New > Journal Entry to review pending adjustments.
📺 Video Tutorial: 🎥 Understanding Profit & Loss in QuickBooks Online (~2 min)
4. Executive Director
Primary Responsibilities:
✔ Provides final approval for organizational budgets. ✔ Ensures financial policies comply with regulations. ✔ Oversees overall financial decision-making.
Steps to Implement in QBO:
1 ⃣ Review & Approve Budgets
Navigate to Gear Icon > Budgeting .
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• Review proposed budgets and approve or request modifications.
2 ⃣ Oversee Financial Policies & Internal Controls
• Ensure proper user roles and approval workflows are implemented.
📺 Video Tutorial: 🎥 How to Create a Budget in QuickBooks Online (~5 min)
5. Board of Directors
Primary Responsibilities:
✔ Conducts periodic reviews of financial statements. ✔ Approves major financial policies and strategic decisions.
Steps to Implement in QBO:
1 ⃣ Access Financial Reports for Review
• Ensure board members receive financial reports or have view-only access in QBO.
2 ⃣ Approve Financial Policies & Budgets
• Participate in quarterly financial meetings to review policies and budgets.
📺 Video Tutorial: 🎥 QuickBooks Online for Nonprofits (~60 min)
Conclusion & Next Steps
By defining these roles and responsibilities and implementing structured financial workflows in QBO, FOAM ensures compliance, accuracy, and financial sustainability. These steps will support better grant management, stronger financial oversight, and increased transparency.
Would you like a printable checklist for staff training? 🚀
Transitioning Fathers On A Mission (FOAM) to GAAP-aligned accounting within QuickBooks Online (QBO) involves a series of structured steps. Below is a comprehensive guide, complete with verified video tutorials to assist in this process.
3.1 Prepare & Review Current Data
1. Extract Current Chart of Accounts (COA) & General Ledger (GL):
• Export Existing Data: o In QBO, navigate to the Chart of Accounts . o Click on the Gear Icon and select Export Data . o Choose to export both the COA and GL for thorough review. • Identify Issues: o Examine the exported data to spot incomplete, duplicated, or misclassified accounts. 2. Identify Nonprofit-Specific Requirements:
Net Asset Classification:
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o Ensure net assets are categorized into: § Without Donor Restrictions § With Donor Restrictions
• Revenue Accounts: o Set up accounts for various funding sources: § Grants § Donations § Program Fees • Expense Accounts: o Create accounts reflecting: § Program Services § Management & General § Fundraising Activities
3. Clean & Consolidate:
• Merge Redundant Accounts: o Combine duplicate accounts to streamline the COA. • Assign Account Numbers: o Implement a numbering system for better organization: § 1000–1999: Assets § 2000–2999: Liabilities § 3000–3999: Net Assets
4000–4999: Revenue
§ § § §
5000–5999: Program Expenses 6000–6999: Management & General
7000–7999: Fundraising
Video Tutorial: o For guidance on setting up a standard COA with account numbers, watch: o
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§ Standard Chart of Accounts with Account Numbers
3.2 Configure QuickBooks Online for Nonprofit Tracking
1. Enable Class & Location Tracking:
• Turn On Features: o Click the Gear Icon > Account and Settings > Advanced > Categories . o Activate both Track classes and Track locations . • Define Classifications: o Classes: Use for major programs or grants. o Locations: Use for multiple sites or significant cost centers. • Purpose: o Enhances the ability to produce statements by function and program. • Video Tutorial: o For a detailed walkthrough on setting up class tracking, watch:
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How to Use Classes in QuickBooks Online
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2. Set Up “Projects” (Optional but Recommended):
• Create Projects: o For each grant or significant initiative, utilize the Projects feature in QBO. • Benefits: o Allows generation of profitability reports per project, aiding in grant reporting. • Video Tutorial: o Learn how to effectively use the Projects feature: o
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Using Projects in QuickBooks Online
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3. Revisit Opening Balances:
• Reconcile Accounts: o Ensure all bank and credit card accounts are reconciled. • Adjust Entries: o If discrepancies exist, make adjustment entries to align opening balances with audited figures or final year-end statements. • Video Tutorial: o For assistance with reconciliation, watch: o
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How to Reconcile in QuickBooks Online
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3.3 Daily & Monthly Procedures
1. Daily Entry and Coding:
• Income (Donations, Grants): o Assign each transaction to the correct Class and revenue account (e.g., “Unrestricted Contributions,” “Grant - Foundation XYZ”). • Expenses (Vendor Bills, Checks): Video Tutorial: o For Continuing with the detailed steps to transition Fathers On A Mission (FOAM) to GAP-aligned accounting within QuickBooks Online (QBO) : o Select the appropriate expense category from the COA. o Tag each expense to its relevant program, class, or project. •
3.3 Daily & Monthly Procedures
1. Daily Entry and Coding:
• Income (Donations, Grants): o Assign each transaction to the correct Class and revenue account (e.g., “Unrestricted Contributions,” “Grant - Foundation XYZ”). • Expenses (Vendor Bills, Checks):
o Select the appropriate expense category from the COA. o Tag each expense to its relevant program, class, or project. Video Tutorial: o For guidance on recording daily transactions §
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QuickBooks Online Restricted and Unrestricted ank Deposits
2. Weekly or Bi-weekly Reviews:
Transaction Detail Review: o Run a Transaction Detail by Account report to spot-check coding accuracy. o Identify and correct any misallocated transactions.
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3. Monthly Close:
• Reconciliation: o Complete bank and credit card reconciliations by a set deadline (e.g., 5th of the following month). • Approvals: o The Treasurer or CFO reviews significant journal entries (e.g., those above a predetermined threshold). • Reports: o Generate the following for management and board review:
§ Statement of Financial Position (Balance Sheet) § Statement of Activities (Income Statement) with columns for programs, management & general, and fundraising § Budget vs. Actual (monthly or year-to-date) § Grant/Project-Specific Reports
Video Tutorial: o For a step-by-step guide on closing your books:
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§ Closing the Books / Period End - QuickBooks Online
By following these steps and utilizing the provided resources, FOAM can effectively transition to GAP-aligned accounting within QuickBooks Online , ensuring accurate financial reporting and compliance with nonprofit accounting standards.
Implementing robust internal controls and oversight mechanisms is crucial for maintaining financial integrity within Fathers On A Mission (FOAM) . Below is a structured guide to establishing these controls in QuickBooks Online (QBO) , accompanied by verified video tutorials for each step.
1. Segregation of Duties
Objective: Ensure that no single individual has control over all aspects of financial transactions to prevent errors and fraud.
Steps:
1. Assign Distinct Roles: o Transaction Entry: Designate a staff member responsible for entering financial transactions into QBO. o Bank Reconciliation: Assign a different individual to reconcile bank accounts, ensuring they do not have transaction entry privileges. 2. Implement Approval Processes: o Payment Approvals: Establish a policy requiring dual authorization for payments exceeding a specified threshold (e.g., $2,000). o Digital Approvals: Utilize QBO’s approval workflows to document and manage payment authorizations.
Video Tutorial:
• For guidance on setting up internal controls in QBO, watch:
A System of Internal Controls in QuickBooks
2. Data Security
Objective: Protect sensitive financial information by assigning appropriate access levels within QBO.
Steps:
1. Set User Permissions: o View Only: Grant board members or oversight committees view-only access to financial reports. o Standard User: Provide staff responsible for daily data entry with standard user access, limited to necessary functions. o Admin: Reserve administrative privileges for the CFO or Executive Director to manage high-level settings and user permissions. 2. Regularly Review Access: o Conduct periodic reviews of user access levels to ensure they align with current roles and responsibilities.
3. Periodic Audits or External Reviews
Objective: Regularly assess financial practices to ensure accuracy and compliance with regulations.
Steps:
1. Annual External Audit: o Engage an independent Certified Public Accountant (CPA) to perform an annual audit of financial statements. 2. Compliance with Louisiana Regulations: o Adhere to Louisiana’s audit requirements for nonprofits, which may mandate audits based on revenue thresholds. o For detailed state-specific audit requirements, refer to the Louisiana Legislative Auditor’s guidelines. 3. Internal Financial Reviews: o Implement quarterly internal reviews of financial records by the board’s finance committee or an external CPA to identify discrepancies and areas for improvement.
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