 In this presentation, we will enter a transaction related to restricted government grants. Let's get into it with Intuit's QuickBooks Online. Here we are in our not-for-profit company, Dashboard. We're going to head on over to Excel just to see what our objective will be. Within Excel, we're on the fourth tab, so we're going to be on the fourth tab. We're looking at 2C here, 2C, which is going to be the government grant used for education. So we're going to have a government grant money coming in. It's going to be from the government. It will have a restriction on it, that restriction then being used for education. So that means that cash is going to be going up. If we think about this from a journal entry standpoint, the transactions affected would be cash then increasing. The other side, basically income type of account for not-for-profit, similar to income for a for-profit. Contributions going up, however the contributions having restrictions then therefore going up with restrictions. So if we were to post that out then, we know that the cash account would then be increasing. We have an increase to the cash account and then we have an increase to an income type of account, however our contributions, income type of account, it's going to be a restricted item. So we have a restricted item here. So in this setting, we see that with two different accounts. If we see that in our profit and loss type of report, statement of activities, then we will see that information broken out in columns. So here's the columns, with donor restrictions and without. So our objective when we put this into QuickBooks is to have a system where we can have one kind of transaction that we can do this in and then break out these two columns which we're going to use the classes to do. Then we also have the restrictions. We have the items with restrictions here and we might further want some more information on that. So we might want more information which we can again use the classes field to give subclasses to help us with that and then formatting reports to keep like simplified types of reports and then added more detail when necessary and or we'll also demonstrate a method we could use with the subcustomers to track that as well. So those are going to be the tools that we will use. That's what our objective will be. Back to QuickBooks online. First thing we're going to set up is the customer. We want to set up the customer so we can use that feature in order to help us to track the information. We're going to use the subcustomers to do so. So I'm going to do that by going to the sales item. We're going to go to the sales tab on the left hand side in the hamburger and then we want to go to the customers tab up top. So we're going to be in the customers tab and then if we scroll down within the customers tab we have the items here. Notice we have the restricted time and then we have the pleasure within the restricted time item. Now we're going to have another restriction for government grants. So what I'm going to do is I'm going to add the customer. So we're going to set up a new customer so I'm going to go up top, set up a new customer and this is going to be like the parent customer and I'm going to call it government grants, government grants and then I'm going to say education restriction. So that's going to be the restriction on it so I'm going to make that the parents account. So I'm going to go ahead and save that. Then I'm going to go back to the customers tab and within the customers tab I'm going to scroll down and now we'll see our government grants. Now we're going to have a subcategory within the government grants so I'm going to go back up top and this would be the specific government grant that we would have. So I'm going to put this into the subcategory of government grants for education that we need to use for education in general. So I'm going to say we need a new customer and this is going to be a specific grant and I'm just using a generic name here government grants but we could put a more specific name within there if we so choose. It's going to be in a subcustomer, a subcustomer this time of the government grants and then if I have a specific name I don't want to bill it with the parent account I could then bill this customer separately so then it'll show up in the subcategory of government grants so we can kind of group them together when we when we start to generate and make our reports yet still be able to bill them and see this information separately by the actual company if we have multiple different kinds of government grants that would go into the subcategory. So then I'm going to say save this and let's go back to our customers again so we'll go back to our customers and then if we scroll back down so now we have the government grants for restricted education and a government grant here now note again if you had multiple government grants you could put it into this this category and then it's going to show up it's going to show up on the report when we run the report by customer and it'll break out these government grants and then the total for all the grants within it and you can imagine having multiple grants within it which have that that education restriction for it. Another way we can track this is with the class feature to do that we're going to go to the cog up top and we'll go into the lists and we want to go to all lists what we're gonna do is set up a subclass once again so we're gonna go to the classes down below so we're gonna open up our classes I'm gonna close up the hamburger we have a restricted items and we have restricted by time and now we're gonna have a restriction by the edgy by the grants for education grants for education so I'm gonna say new gonna make a subclass here and this is gonna be grants or we could say gov grants education something like that and then I'm gonna make this a subclass and we're gonna make it a subclass of the restricted item here so it's gonna be once again within the restricted item so we're gonna say save and then you can imagine what's gonna happen here when we run the profit and loss by class we're gonna have restricted and unrestricted and then the detail within the unrestricted and the detail within the restricted items being broken out so let's take a look at that now so now we're gonna actually process the report so we're gonna hit the hamburger up top we're gonna go to the plus button we're gonna use our sales receipt which is kind of like our standard form when we get when we get money so money's coming in kind of our donation type form and then we're gonna say this is gonna go to the to the government grants so we want to pick up then we're gonna pick our government grants the education restricted items for the subcustomer here and we're gonna be picking that item that we set up in the customer field if we have the email then of course we could set up the email we're gonna be making this on 010420 so 010420 and the payment method I'm gonna say payment method I'm gonna say it's an electronic transfer so I'm just gonna say cash for the electronic transfer instead of a credit card reference number and then it's gonna go into which account for the deposits I'm gonna be putting this into and we can put it into either the checking account or we might want to put it into the undeposited funds if we're gonna have multiple funds that we're gonna then put into the bank so that's been our custom so I'm gonna take the undeposited funds here so we could put them into the bank in the same format that they will be showing on the bank statement the service date is also gonna be let's see 010420 and then the product we're gonna set up another product so I'm gonna call it government grants for the for the item here so this is gonna be the item that we're gonna set up I'm gonna add a new item we'll say new item it's gonna be a service type of items we'll add the service type of item I'm just gonna call it a government grant and then I'm gonna copy that and then I'm gonna put that down here in the descriptions we'll put that in the description and now we could put this into the restricted income account here we might want to put another income account if we want a little bit more detail so I wouldn't put it do not put another income account for every type of grant that you have that would not be good but you might want to distinguish on the income statement in another income type of account government grants or possibly federal government versus state government grants in other words the overarching category of the grants so again you're not really tracking each individual grant because each individual grant you're gonna be tracking with the use of the subclasses in the fields that we're gonna have the class fields as well as the sub customers that's how we're gonna track multiple grants if you have multiple government grants we could track it in that fashion within and that means on the income statement you don't want to do that you don't want to set up another income statement account typically for each individual grant however you might want a category type of accounts and hey these are the government grants these are the federal grants these are the state grants and so on and so forth so that's what we'll do here I'm gonna say all right I want to I want to add another account for just the sub category of government grants so that and this will be helpful hopefully to the people on the board of directors they don't want to see each if you they'll be overwhelmed if you say if you have a bunch of different grants from different government organizations but if you say hey these are the grants from the government versus other forms of income in a subcategory that could be useful information and not too overwhelming so in any case we want an income type of account and then I'm gonna say it's gonna be other primary income and I'm just gonna call it government grants so government grants you may want like state government and fed government if those are gonna if you have both of those right and you can distinguish between those two but I'm just gonna say government grants for our practice problem here and then I'm gonna say save and close so there's our item so then I'm gonna say save and then the government grants are here so whenever we use that item it's gonna be going to that government grants income type of account let's pick up our amount then let's pick up our amount going back to excel to check that out so if I scroll up in excel we're on this one that's gonna be the 159,000 so 159 so we'll say quantity one 159,000 and then I'm gonna put it into the class of that grant that we set up so we're gonna put it into the class of the government grant and there we have it so what's this gonna do when we record it it's gonna go into undeposited funds until we then transfer it into the bank then the other side is gonna be driven by the by the item here the item is pointing to the income account we just set up for government grants that's gonna be going into the income account of government grants when we run a profit and loss by class will be able then to see under the restricted items the subclass now of the government grants which is gonna be increasing on the income side of things as well and we can also run a report by customer where we could see the grouping of the restricted customers under the subcategory of restrictions and then see this item in government grants in the restricted customer item allowing us to track further those restricted items and getting more detail on them so let's go ahead and save this let's say save and send I'm gonna say save and close let's go save and close and then let's open up our reports we're gonna go back to our reports on the left hand side so then we're gonna open up the balance sheet so here is the balance sheet that we opened up and if we go up top I'm just gonna change the date range so let's make sure it's in 2020 oh one oh one two zero to twelve thirty one two zero we'll go ahead and run that report I'm gonna duplicate this report up top going up top right clicking on that tab up top and duplicating that tab then we're gonna go back to the tab to the left we're gonna go down to the reports once again open up that other favorite report that being the P&L the profit and loss the income statement I'm just gonna open up the standard P&L profit loss and then we'll make the adjustment for the profit and loss by class and the profit and loss by customer so there we have it I'm gonna scroll up top I'm gonna change the dates up top from oh one oh one two zero to twelve thirty one two zero we're gonna go ahead and run that report so now this information we put in place if I go into the balance sheet we have increase I'm gonna close the hamburger here I'm gonna hold down control scroll up a little bit to get this up to like that one two five that's where I like to be at that one two five then I'm gonna scroll down in in the undeposited funds we should have an increase which is gonna be down here so it hasn't going into the checking account we put it into that clearing account so that we can group it together and then put it into the checking account now again if it's a grant it may have gone directly into our checking account with an electronic transfer or you know we might be able to put that directly into the checking account but we're just gonna practice this going through the undeposited funds because that's often something that confuses people so that added step and it's useful in some cases so there we have that item and then if I go back up top we go back to our balance sheet the other side is gonna be on the P and L the profit and loss so if you go to the profit and loss report close up the old hamburger we now have the income account with the government grants so there's the government grant if we go into that 159 there we have it so then I'm gonna go back up top go back to our income account so again just note that you want to have not too many income accounts up here so remember you may you may want a category for government grants in the income account that's not too bad if I was if I was someone on the board and I was looking at this I might want to break out between the government grants and and the unrestricted other unrestricted items and the restricted items right I might want that however I don't want every government type grant if you have multiple government grants on the income statement that's not where to put that it'll just muddy the waters it'll make people's eyes roll over and it's gonna confuse things greatly you just want the group and then you can go into the more detail and you can go more detail with other tools such as we can look at this report by class so let's go to the drop down up top total and then we're gonna make this by class now so take this by class and then run that report so now within the restricted items we have the government grants right so here we have the government grants and then the time restrictions we have the time restrictions and the and then the total restricted items so so note here again this gets a little bit muddy because what we would like to do if I go back on over to XO we'd like to see in a simple format this statement of activities basically breaking out the restricted and unrestricted and then giving more detail which is a little bit more difficult to do notice when we because if we go back up top notice we can't collapse these columns like we kind of like to see I can't basically say I just want to see the total restricted and the total unrestricted in this format however we can easily do that in Excel so we can use the filter items but even if we filter them it's still going to show the content that within the parent class with that's going to be active so it's still going to show a few columns here and therefore in order to adjust this or trim this down we can do that pretty easily within Excel so for example if we take a look at this now we see that we're at the 146 700 if we then go in then to the balance sheet we're at the 146 700 now what if you wanted to to generate this report say hey I what I really want to see is just the total restricted and total unrestricted to match this item to match some report such as this and then give more detail about what types of restrictions we have and then we can give someone some a report like this which would could make their eyes roll over right but we only want to give this report to somebody that that that's ready for it right so we first want to give a more simplified report if possible typically so what we're going to do then what another way we can deal with this is say I'm just going to export this report to Excel exported to Excel and then we will open up the Excel file so we'll open up this file here and then you can modify your report in here pretty easily it's a little bit of a cumbersome thing but not too bad right and what you can do I'm going to go I'm going to click this I'll do this fast and we'll do this again later I'll take a look at the reports later on how we can format this in more detail so I'm going to go to the home tab alignment I'm going to remove the merged cells here I'm going to remove the merged cells because that makes it easier to delete some columns and remove the merged cells and then what we want is this restricted column notice it has a formula in it right here it has a formula so what I'd like to do is just have that column now I could delete these columns but it's going to ruin the formula so I could I could hard code the formula or I could just use a hiding feature so what I'm going to do is just say I'm going to go from column B to column to this column here and I'd just like to hide those I wish I could collapse them because you can in QuickBooks desktop you can actually collapse the subclasses but in any case we're just going to say I'm going to right-click here and then hide those columns so did I do it right click and hide those columns and then I'm going to go to here I'm going to go to the these items and say hide hide these and then we have the total total unrestricted and total restricted so it takes a little bit and notice I have this not specified these are the expenses we're going to break them out to restricted and unrestricted at a future point so once we do that you will no longer have this column as well and so we'll be able to hide that column and then you'll just have these two columns and the total so it takes a little bit of work to do that in Excel to export it and you can't collapse it in the online version like you can in the desktop but that's not too difficult to do and then if you want to expand these again you can expand them across here merge the cells I like to instead of merging right-clicking here and use it another feature because the merging kind of messes things up sometimes so I like to go to edit the cells and then just use the alignment tab to say I want to align horizontal across the selected cells and then say okay and that makes it centered without like merging these cells together so doesn't mess up when I like wanted to leave columns or something like that any case I'll keep that for now I'm just going to close this back out well we'll take a look at more of that at that kind of formatting in the future but just when you look at a kind of an overwhelming report like this it's pretty easy to format that I know it you have to do it outside the system you can't collapse it within here but it's really not too cumbersome to do that now if you do want another report however to be breaking out like the rest the restricted items here and have this report be a little bit smaller by not having the subclasses then we can use the other method we're doing both methods here's and that's to track it by the sub the subcustomers so you could say instead of having you could just keep it as restricted column here and then say I'm going to track the subcustomers with another report and say if you want more detail we'll go to another report for the subcustomers and run basically the income statement by customer so now I'll run the income statement by customer and run that report and so then we have our information and there's the government grants here now this will show all customers so you'd want to customize this report and just pick up those items that are going to be related to the restricted customer items that we set up basically the parents customers and then you'll have all the subcustomers within it so if we then go back down I want to filter this we're going to filter this by customers so I'm going to filter it by customer I got the customer checked off then if I select the drop down and then scroll down we've got our customer types so we've got the government grants we're going to need that and the restricted time and you may as well just check all of them off because once again it'll show the detail of those items within it so we got the restricted time and so those are going to be the items and then I'm going to go ahead and run that report and then we'll have the details so we have the government grants the government grants and then it's going to give you the total government grants and then we'll have the same for the time so once again it'd be nice if you could just see the totals of this report be able to collapse the detail and just see the totals for the two categories that you have here but you don't have that function that format that format here so you could condense this report and again you can export this to excel if you so choose and then just show the totals of these restricted items without without the three columns without the detail of them the bottom line is this total of the restricted items here this 167,000 I'm going to duplicate this report or let's go back to the balance sheet and then open up another income statement go to the hamburger go down to the reports we're going to open up another P&L and just take a look at the side by side comparison of these two formats of the income statement or the profit and loss and I'm going to open up another profit and loss report we're going to run it for the same date range that's going to be 010120 to 123120 I'm going to close up the hamburger going to run that report then I'm going to show this report for the classes I'm going to hit the drop down I'm going to choose the classes then run that report so we're going to break this out by class now you can see the restricted items here the government grants and the time are going to be the subcategory the restricted items and then the total restricted items are that 167,000 167,000 that matches the other format that you see on this report here as well so right the 167,000 so in other words if you wanted to make this report a little bit smaller by classes you can then not include the classes all the detail for the restricted items just get to that 167,000 you'll only have one column for it and then you can find the detail of that 167,000 by running this report and then you could you could use that method if you so choose or you can you can have the detailed method within the classes here so there's a couple options to to track this information and again your goal what you want to do is set up a system where you can give it in a more refined kind of format like we say and then expand on that format when you're presenting the reports to say like the board of directors or something like that so in any case that's going to be it for now let's get out here