Using Class Tracking in QuickBooks Online for Nonprofits

Nonprofit accounting can be intimidating to some people. Instead of tracking just net income, nonprofits track income and expenses based on donor restrictions. This level of tracking ensures the funds are being spent as intended based on the donation and/or grant. QuickBooks Online offers the class tracking feature to assist nonprofits in providing clear and organized financial reports to its stakeholders. 

When class tracking is turned on in QuickBooks Online, each transaction can be categorized into a class. The basic classes are: Program, Administrative, and Fundraising as these classes are reported on the Statement of Functional Expenses in the Organization’s audited financial statements and Form 990 (if applicable). Organizations that do not require audited financial statements can still benefit from class tracking. Coding transactions by class will assist in tracking how each dollar the Organization receives is utilized. Are more funds being spent on Program related expenses or Administrative expenses? How much did the Organization actually make on its fundraiser? Is the Organization following the budget for each program? This granular level of tracking provides transparency for the Organization's donors, grantors, and stakeholders.  Contact me to discuss how I can help your Organization’s financial reports and statements become more efficient and transparent.

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