In Canada, it is not uncommon to find Nonprofit (not for profit) startups addressing various social, environmental, and community voids. As QuickBooks Accountants near Calgary, we know that managing the finances of a nonprofit organization is paramount for its sustainability and effectiveness.
QuickBooks, the widely used accounting software, offers robust features tailored to nonprofits' needs, providing them with tools to streamline financial management efficiently. In this guide, we'll look into how nonprofits in Canada can leverage QuickBooks effectively to manage their finances and stay compliant.
Does QuickBooks Make Software for Nonprofits in Canada?
There is no QuickBooks software that is specific to nonprofits i.e. you may not find a specific software as QuickBooks Nonprofit. You’ll likely need to customize either the Enterprise or Premiere versions to work for your nonprofit in Canada.
Which QuickBooks Version is Best for Canadian Nonprofits
If you are a larger Canadian nonprofit looking into QuickBooks accounting software, you’ll likely want to go with the QuickBooks Enterprise Canadian Desktop version. For smaller nonprofit companies, Premier should be fine.
You’ll need something for tracking donations and grants and managing expenses and generating reports. QuickBooks provides a comprehensive suite of tools to streamline financial management.
10 Q & A’s about Using QuickBooks as a Canadian Nonprofit
If you’re just getting your nonprofit started, you’ll likely have some of these questions on your mind. These Q&A’s can answer some of your questions you might have about getting started with QuickBooks.
Q: Is QuickBooks as suitable for Canadian Nonprofits as any other business sector?
A: Yes, you can set up a nonprofit chart of accounts in QuickBooks, donation and grant tracking, fund accounting, budgeting and financial planning. You will be able to get all the financial information required to file any required tax filings including the T3010 Charity Information Returns that the Canada Revenue Agency (CRA) will require for Canadian Nonprofits.
Q: What are some of the Key Features in QuickBooks for Canadian Nonprofits?
A: The nonprofit Chart of Accounts is customized for nonprofit companies. As with any company file, you are going to have different vendors, customers, donors, and so forth, so your company will have to do some customizing to the chart of accounts. You can also track Donations and Grants in QuickBooks.
Q: Tell me how QuickBooks works for Nonprofit Donations and Grants Tracking?
A: Anything you receive from individual donors, corporate sponsors, and grant agencies is accurately tracked in a way that you as a nonprofit can record detailed information about each donation. This includes the donor’s name, contact information, donation amount, and date of contribution. This allows you as a nonprofit to keep track of donations and grants for any receipts, financial reporting, and any transparency requirements.
Q: What, if any, are the limitations and challenges in using QuickBooks for Canadian Nonprofits?
A: As with any new software, there is going to be a learning curve. Please expect to have a lot of questions in setting up a QuickBooks file for a nonprofit. Nonprofit accounting can get complex with things like restrictions and compliance. Don’t expect QuickBooks to be the “be all and end all” as far as accounting for nonprofits goes. You’ll likely need additional software depending on your specific nonprofit business. Cost can be another challenge, as there will be a monthly fee to pay for the QuickBooks accounting software.
Q: Which financial statements can I run for Canadian nonprofits, and are P&L and Balance Sheets any different?
A: Income statements (profit & Loss) and balance sheets can be simplified for complex nonprofits with endless accounts. You can run these statements as a non-profit just as you would for any other business. You can also utilize comparative analysis and trend tracking statements for multiple time periods to track growth and identify changes in revenue, expenses, assets, liabilities, and fund balances. Statements can be exported to Microsoft excel.
Q: Can a Nonprofit track Volunteer hours and related expenses?
A: Yes, as a Canadian nonprofit using QuickBooks, you can use timesheets to track hours of volunteers, you can mark hours as billable for volunteers, you can track expenses related to volunteer activities, and you can use job costing to allocate volunteer related expenses to specific projects or programs.
Q: What should I know about tax filings and reporting when using QuickBooks for Nonprofits?
A: As a nonprofit in Canada, you’ll need to register for Charitable Status with the Canada Revenue Agency (CRA) in order to qualify for tax-exempt status and receive tax benefits. You’ll also need to file a T3010 Charitable Information Return. QuickBooks can help you with this by maintaining accurate records for filing these forms. It can also track any GST/HST in case you required to collect GST/HST for certain instances as a nonprofit (find out more about GST/HST here). Donation receipts and payroll taxes (More about payroll here) can also easily be tracked in QuickBooks.
Q: What about syncing with multiple bank accounts in QuickBooks for nonprofits?
A: In QuickBooks, you’ll be able to register for bank feeds on your accounts. QuickBooks can automatically categorize transactions defined by the user. You can also make online payments and transfers as a nonprofit on QuickBooks. In the Canadian version of QuickBooks, you can set up Multi-Currencies in case of dealing with multiple currencies in different funds.
Q: What about QuickBooks support for Nonprofits in Canada?
A: There are online user guides and plenty of documents available online for nonprofits using QuickBooks. You’ll find plenty of video tutorials, webinars, community forums, and training certificate programs offered by QuickBooks. Of course, you’ll have access to customer support channels including over the phone support, email support, live chat assistance for any software setup or troubleshooting.
Now let’s look at how to set up QuickBooks for Your Nonprofit
1. Choose the Right Version: QuickBooks offers various versions, including QuickBooks Online and QuickBooks Desktop in the Premiere and Enterprise editions. Depending on your organization's needs and preferences, select the version that suits you best.
Online will suit very small Canadian nonprofits, premiere will work for small to medium nonprofits, and enterprise will be for larger nonprofits.
2. Make Necessary Changes to Your Chart of Accounts: Customize your chart of accounts to align with nonprofit-specific categories such as donations, grants, programs, and fundraising.
3. Enable Nonprofit Features: QuickBooks allows you to enable nonprofit features like tracking donations, generating contribution statements, and creating reports compliant with Canadian nonprofit regulations. This is great for Churches as they can track incoming donations. We’ll get into that in another post.
Managing Donations and Grants
1. Recording Donations: You can track donations by setting up donation receipts and categorizing them based on donors, campaigns, or funding sources.
2. Managing Grants: Keep track of grants received by creating separate accounts for each grant, recording grant-related expenses, and generating reports to monitor grant utilization.
Keeping Track of Expenses and Budgets
1. Expense Tracking: You can categorize expenses accurately to monitor spending across different programs or projects. You can utilize the nonprofit specific features like expense tracking and bill payments to streamline financial transactions.
2. Budget Management: Set up budgets for different programs or departments to ensure fiscal responsibility and monitor actual expenses against budgeted amounts.
Reports and Compliance as a Canadian Nonprofit
1. Financial Reports: You’ll find a range of financial reports such as profit and loss statements, balance sheets, and cash flow statements to provide insights into your organization's state of financial affairs.
2. Compliance Reporting: You can generate reports compliant with Canadian nonprofit regulations, including tax filing requirements and reporting for charitable organizations.
Integrations and Additional Tools
1. Syncing with Donation Platforms: Many donation platforms make add ins for QuickBooks, allowing for automatic import of donation data and making the reconciliation processes easier.
2. Third-Party Apps: There are third-party apps compatible with QuickBooks for things like credit card processing, donor management, volunteer tracking, and fundraising.
Conclusion
QuickBooks provides nonprofits in Canada with a powerful toolset to effectively manage their finances, streamline operations, and ensure compliance with regulatory requirements. By customizing QuickBooks to suit your organization's needs and leveraging its features for donation tracking, expense management, and reporting, you can optimize financial management processes and focus more on advancing your mission.
We are a bookkeeping and tax preparation company in Southern Alberta. Do you need Bookkeeping or Tax Preparation services? We can offer remote services to businesses in Canada.
Whether you're a small community organization or a larger charitable institution, QuickBooks offers scalable solutions to support your nonprofit's financial management needs, empowering you to make a greater impact in your community. With the right setup and utilization, QuickBooks can become an invaluable asset in your nonprofit's journey towards achieving its goals.
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