 Yeah, welcome everybody. Thank you for joining the webinar. You've already had a little dance party with Greg. I love it. I love it. Today we're going to be talking about how to keep the accounting books for your nonprofit in order using QuickBooks. I'm Aretha Simons. I'm the webinar producer. I know you can't see me because my camera is not working today, but you can hear me and I can see all of you in the chat room. Let me show you how you can engage with us today on the next slide. Continue typing in the chat. Greg had some team members here to help you out. Feel free to put your questions in the Q&A as well. I think he'll kind of direct you. We are recording this. You're going to get the slides and the video replay probably tomorrow. Someone has already turned the closed caption that means you're familiar with the closed caption, but if you need the closed caption type on the CC button at the bottom of your screen. On the next slide, I'm going to talk about something that's really new here at TechSoup. I don't know if you heard the hype about Quad, but Quad is here and it is awesome. It will allow you to have memberships for 10 members in your organization and they'll have access to the entire TechSoup course catalog and so much more. I'm going to drop the link in the chat in a few moments, but you hear Greg, so I'm going to turn this over to Greg, the QuickBooks guru. Greg, over to you. All right, all right guys. So first of all, it looks like we have about 300 people on the call now, which is about right. We have like 700 people that signed up and they'll be getting the recording, but since y'all are here you can really get your questions answered. So please do me a favor and put in the chat. Have you seen me teach before? Yes or no? Have you seen me teach before? Put it in the chat. Every single one of you. Okay, cool. All right. So a number of you have not seen me teach before. Hey, how's it going? So I am Greg and I am a CPA with an accounting practice here in Atlanta, Georgia. And in addition to have an accounting practice in Atlanta, I also own QuickBooks Made Easy. And all we do at QuickBooks Made Easy and I think what I'll do is just kind of show you on a website here if I can find where it is. Where is my website? Let me move this over here is probably where you want to see. No, that's not there either. Where is my, where is my Internet? Oh, you know what? My Internet went down. That's what it is. All right. So let me go back to where my Internet is. This is probably a good thing to go to. All right, cool. So if you go to my website, which is QuickBooks Made Easy.com. All we do at QuickBooks Made Easy.com is teach people how to use QuickBooks that are nonprofits. Okay, we have seminars. We have webinars. We have a three day webinar series coming up at the end of this month for those of you using desktop QuickBooks and then another one the following week for people using QuickBooks online. But this is our team right here. This is me. Paige who's in the background here helping answer questions. We actually have a woman by the name of question. She must have had a tough time growing up. And then we have Barbara and Paige question and Barbara are just like me. We all have accounting firms. All we do is talk about nonprofits using QuickBooks and we do consulting jobs. We do monthly bookkeeping. I do audits in 990s. We do them for thousands of clients all over the country. Bill Sims is in charge of our operations and marketing and he's on the back end also to answer questions about anything. And let's see the link to the page. Bill, can you go ahead and put the link to the QuickBooks Made Easy page in there? So I'm going to just go right in here and we have some discounts on some stuff, but I don't want to talk about that. I want you to learn. So what we're going to do today is we are going to talk about accounting. So I'm assuming that since you're here, you don't know anything about accounting. Okay, because that's the whole point of the course. Okay. Now, if you do, then that's okay. You can still get questions answered. Okay. When we get into the fair is like, will this be applicable to our Canadian group? I think so. I think it will. All right. How to read financial statements. So we're going to define accounting, talk about how to read financial statements, and then what you should be giving your board of directors each month. And then we're going to give you the three most important things to track when you're entering transactions. And then we're going to show you how to use QuickBooks to track those things. And then we're going to give you some places to go for more information. Now, if you are new to the world of doing zoom and your screen is too small, because let me just show you this is where I'm going to be. I'm going to be in QuickBooks and I need to go ahead and go to QuickBooks. Eventually I'll be in QuickBooks. And I'm going to remote into QuickBooks here just so that you can kind of take a look at it. And if this screen looks really small to you, if you're like, gosh, I really can't see the screen here. Then I will tell you that if you push this little view button on the top right, just roll your mouse around your zoom screen until you see this little view and you push it. And then you push this full screen right here and it makes a screen. It makes a screen gets bigger. All right. This webinar will talk about reading financial statements for about 20 to 25 minutes in total, I think, but we'll also get into some other details. All right, so let's see what else do I need to see. So this is how you make it bigger. And now, first thing I want to do before I go any further, I have a little poll that I want you to answer. And that is let me go ahead and launch this poll. I want to know what accounting package you're using. All right, so let's see what accounting. Yes, the recording will be available. Yes. Notice how when you put a question in the chat, I will answer you immediately. Okay. Anyway, so Chris put QB. That's not enough information, Chris. I need to know is it QBO or QBD, which is desktop. Don't put your answers in the chat. Please answer them using the poll. Unless maybe Susan or Kayla, you don't see any polls, in which case maybe you're not in the zoom using the app. That's okay, Chris, no worries. Paul is using something called WAVE, which I've actually never heard of. But anyway, we've got 333 people in the room. We've got 257 people that have answered. Paul Schultz, is there a reason why you didn't answer the poll? Schultz is using something called Shepard staff. Are you a house of worship, Paul? Are you a house of worship? Let me know. Okay, so if you are a house of worship, the accounting for houses of worship are very different than everybody else. So I do want to show you where you can go for more learning as well, but I'll try and incorporate that as I go. So we've got just another few people that have answered. I'm going to go ahead and end the poll in 5, 4, 3, 2, 1. And we do have 60 people that didn't answer, which is like they signed in, but then they must have gotten on the phone or something. I don't know. Hey, the webinar has started. Anyway, so here's the results here. So as you can see, we've got 60% of the audience using QuickBooks online and another 23% using QuickBooks desktop. We only have 14 people that are using something else. Okay, so that's, oh no, that's wrong. Something else and don't know. So yeah, we got about 30 or 40 people that are using something else. That's funny. All right. Yes, Tamara, she's a house of worship too, but first thing I want to do is talk about what accounting is. Okay. So is everybody ready? I'm going to go ahead and stop sharing and we are going to start talking about what accounting is. So somebody tell me that you're ready for me to start and I will start. I need something in the chat. Hey, Gail, how's it going? Welcome. All right. What is accounting? Accounting. Look at the screen here because I have these pretty little slides and this is real basic. It's the process of entering transactions into a list in your accounting software package. The list is called the chart of accounts. And then from there, you use those to create your reports, the financial statements, and that's really all accounting is folks. It's the process of, you know, you get money in and you get money out is just entering that stuff into a system so that it will get on reports. Okay. So I think what I want to do is I want to start with the reports. So since most of you are using QuickBooks online, I got to go somewhere to show you the financial reports. So I'm going to start with QuickBooks online. I'm going to use that as my example. So I'm going to pull up reports. Now, by the way, you probably already know this. Somebody tell me what are the two main reports that I'm talking about? When you are trying to get reports out of an accounting system, every one of your financial statements appear on one of two reports. What are those two reports? One of them is the profit and loss and one of them is the balance sheet. Okay. So I'm going to start with the balance sheet. So I'm just going to pull up one here. Let's do a little balance sheet. And I got to make it for a certain date range where I actually have some data. Okay. So this my friends is a balance sheet. Okay. Now in the world of nonprofits, it might be called something else. Anyone know what else it would be called? Anyone else? If it's not a balance sheet in the nonprofit world, if you get an audit, they're going to call it something else. Statement of financial position. Okay. Now the person who had statement of activity scares me. Okay. That's what a profit and loss is. We're looking at a balance sheet. So everybody I need you to pay complete attention. There are two reports in accounting and all accounting is is entering transactions. So they end up on those two reports. One of them is the balance sheet, which is also called the statement of financial position. And the other one is the PNL. We're going to do the PNL in a minute. Okay. So here is the balance sheet. What the heck is a balance sheet? Okay. The balance sheet or the statement of financial position, you can think of it like a snapshot picture at a point in time of how your organization is doing. It's like somebody took a camera and they went click and they took a picture of your organization at a point in time. This picture was taken on June 30, 2025. All right. So on this day, June 30, 2025, it's a snapshot of what you look like. Now I'm going to teach this real basic guys because we got a lot of people here and I want to make sure everybody understands. The balance sheet is made up of two parts. The top part is called assets and the bottom part is called liabilities plus equity. The top parts assets, that's everything you have on the date the picture was taken and the bottom part liabilities plus equity, that's everything you owed and what's left over on the date the picture was taken. Okay. So on June 30 assets, that's everything that you have. I have some money in a bank account, checking and savings, people owe me money. That is something I have. It's an asset. I can't touch it, but it's an asset. Somebody owes me money. That's a receivable. I can actually sell that asset to a third party company that will pay me less than what the person owes me and then they'll collect from them. So it's an asset. You can sell it. Okay. Fixed assets like furniture and equipment, most of you have at least some computers, chairs, desks, what have you. Some of you have buildings, some of you have land, some of you have cars. These are assets, fixed assets, things you have. Total amount of stuff we have is 127,045 on June 31, 2025, 2025 because you know it keeps changing, right? Every day, the amount you have changes. Goes up as you make money, goes down as you lose money. Mike says define equity. I will. I will. Just let me get there. Okay. All right. So the bottom part, top parts made up of assets, bottom hard is made up of two parts, liabilities plus equity. Okay. Now liabilities, that's everything we owed on the same date the picture was taken. We owe $4,800 in payables. We owe $10,000 to American Express. We have some payroll liabilities we owe. We owe some money to the bank on a loan. Total amount of money we owe is $56,000. Okay. Total assets, $127,000. Total amount of money we owe $56,000. Now here I go, Mike. Now I'm going to spend a couple of minutes on this because defining equity is the hardest part of teaching accounting. Well, one of the hard parts. Okay. Real easy. Equity is simply the difference between what you have, which is your assets and what you owe, which is your liabilities. Okay. So one way of thinking about it is simply the difference between the two. I have 127,000 of assets on what day is this? June 30. You know what? I think I'm going to click this little drop down arrow to the left of assets so it collapses them all. So there's all my assets and then I'm going to collapse my liabilities. So here's all my liabilities. So I have 127 of assets. I have 56,000 that I owe. Equity is simply the difference. And the reason why it's the difference is because if it's a balance sheet, it has to balance, which means the top half have to equal the bottom half. Okay. Top half, 127,045. Bottom half, 127,045. That's why it's just a math thing. If you have your assets, you take away what you owe, the difference is equity. Okay. Now I'm going to keep talking about this so you can really kind of understand the meaning behind equity as opposed to just, well, it's just the difference between the two. If assets is everything you have, all right, think about, think about you doing a balance sheet for yourself personally. Let's say assets is your own assets. So you ever go to file like application to get a loan at a bank for a house or something. They make you fill out a balance sheet and assets is all the stuff that you had, your clothes, your furniture, you know, your car, all that kind of stuff. Bruce, not talking about that yet. We'll get to that in a minute. Okay. All right. Just pay attention here. So total assets, 127,000, that's everything I had personally. Liabilities is everything I owed personally. Now I'm going to ask you a question. If you said, okay, everything I have is 127,000 and everything I owed was 56,000. So what does I have more than I owe? That's a good thing. Okay. Don't you think that's a good thing? Wouldn't you want to have more than you owe? Right. Somebody say something here. Let's Lisa donate. Let me, let me talk for a minute. Okay, cool. So, so here's the deal. I want equity to be a positive number. I want to have more than I owe. Okay. Now, some people have another word for equity. They call it net worth. They say it's what you're worth. Okay. Which is like a horrible thing to say about somebody, you know, it's like, well, what do you mean I don't cast dispersions on me just because I owe a lot of money. The reality is it's your financial worth. You have more than you owe. Okay. So you want this to be a positive number and the highest number, the higher it is, the more you have 127 as opposed to what you worth, what your worth. Another way of looking at equity is what's left over that I can use in the future. Okay. That's another way of looking at it. Let's think about it. Now, I have $127,000 of assets on June 30. Let's say I went out of business on that day. Okay. Went out of business. And so I have all this cash and have receivables and have some fixed assets. I have some stuff, but I can't keep it all. It's not left over because I have to pay off $56,000 of debt after I do that by either paying with cash or selling the fixed assets. Whatever's left over $70,000, that's what's mine to keep. Now, if you're a nonprofit, you wouldn't really keep it. You'd probably donate it to another organization, but it's basically what's left over. Okay. So does that make sense to y'all? Ask me more questions about equity before I move on because I want to make sure that everybody is cool with what equity is. Are we good? Okay. It does make sense. This is, think about it. This, yeah. Okay. It's very clear. If you, if you, all you had in your personal world was a home and the home you paid $700,000 for it. So your assets would be $700,000, but you had a mortgage of $400,000. So the mortgage would be $400,000. The difference is your equity or your net worth. I have $300,000. If I sold it, I'd pay off the mortgage and I have $300,000 left over. Nonprofits do not have equity. So Paul is just kind of telling me, dude, it's not supposed to be called equity. It's supposed to be called net assets, assets, net of liabilities. And he's right. But in QuickBooks, it says equity. Okay. I believe there is a way if I click edit titles, it's only in QuickBooks online that can actually change the name to net assets. But I doubt you can do it in any other software package. But I think I can change it there. I got to refresh the screen probably. I think it takes a minute before it refreshes. And there we go. Now it says net assets. Now, as far as the categories under equity, they come in two flavors. Unrestricted and donor restricted. They used to have three flavors. Now they only have two. So you should really have two accounts underneath it. One for unrestricted and one for donor restricted. Okay. All right. So Karen says she can change the report titles in a memorized report. You can't change the word equity. You can't change the account type. You can't. Okay. All right. So anyway, that's the balance sheet. Now I'm going to move on to the PNL. Now I'm going to teach you something about QuickBooks online. If you right click on a tab here in Chrome and click duplicate. It'll open up a second instance of QuickBooks. That way you can see more than one screen at a time. Anyone knew that? Put it in the chat. Anyone knew that already? That's such an easy way to work in QuickBooks. Yep. Who didn't know that? Who did not know that? Put that in there. You have QuickBooks online. It's really very cool. Anyway, so now I'm going to run the other report. Y'all tell me what's the other report? What's the other report? One's the balance sheet. What's the other report? What's the other one? The PNL. What's the PNL called for the nonprofit world? What's the PNL called? It's called the statement of activity because it's all the activity in and out of an organization. So now unlike the balance sheet, which is a snapshot at a point in time, this report is over a period of time. This is an entire year's worth. I could make it a month. Doesn't matter to me. So this is my whole year. And really all you're doing in accounting is you're entering transactions so they end up either on this report or this report. And then you print out this report, usually compared to the prior years, what I would do. And this report usually compared to the budget. And then you will be able to give that to your board. That's what you give to the board. A PNL compared to budget and a balance sheet. And I like to compare it to the prior year at the same time period. Ray is just telling us that the duplicate tab is applicable to all cloud-based apps. That's right. Buddy wants to know which version of QBO does small nonprofits use. I'll tell you about that later. Let's stay in accounting world. So the PNL is much easier to understand. It has two parts. The top part and the bottom part. The top part's all the money going in. The bottom part's all the money going out. Money going in is called income or revenue. It depends upon how you set things up in your books. And this is either called expenses or expenditures, how you set things up in the book. So we have total amount of money going in, 265, total amount of money going out, 254. So as you can see, this is from a period of time to a period of time. So the PNL is like a movie of transactions, whereas the balance sheet is a point in time. So basically, that's why the board needs to see both. The PNL shows you everything that happened during that month. Everything that came in, everything that went out. Donations, grants, membership dues came in, ticket sales, registrations, sales of product in a gift store, and then you paid payroll and you paid rent and you paid utilities and everything. Maybe you granted to others that went out. Okay, so whereas this is a snapshot, this tells you basically how you got there. So kind of the way I like to think about it is the PNL kind of tells the story of where you went during a period of time, whereas the balance sheet is where you are right now. It's the result. So basically, this is a PNL. This gives me, okay, for this particular time period, I got in $10,000 more than I spent. And as a result of that, plus wherever I was at the beginning of the month, it turns out that I have 127 in assets and I have liabilities of 56 and the equity is the difference. Okay. So there's one more thing that I want to explain to you when you're looking at QuickBooks and this is unique to QuickBooks. If you notice, when I look at my PNL and I should tell you that this organization ends on June 30. This organization that I'm using is a sample that goes from July 1 to June 30 and it's a year. And it's telling me for that year into June 30, I made $10,000. That's my net income, $10,000. Well, if I look at the equity section again, you will notice there's that same $10,000. Look at that, $10,869.53 and $10,869.53. So another way of describing equity, which is also net assets, it's basically the total of all of your profit and losses from the beginning of time added together. The current year's PNLs show as a negative, as a number right there, it's online. These two are the total of all the prior years. Okay. And as a matter of fact, what QuickBooks does, if you're using it, most packages do is they'll take this $10,000 and on the first day of the next fiscal year, they'll move it into one of these other accounts automatically. Okay. And start and then this net income starts over again. Okay. So all accounting is is entering transactions. So they get on these two reports. And I think what I want to do is I kind of want to show you what each report looks like. So I think I'm going to try and get both of these on the screen at the same time because I want you to see what they both look like at the same time. It's really better if you're in QuickBooks to have double screens, but I can't really show you double screens when I'm teaching. So here's my balance sheet. So here's my balance sheet. And here is my PNL. Okay. Let me move this a little bit over here. So all accounting is is entering transactions. So they end up on these two reports. And what they do is they go through one of the lists in QuickBooks or in whatever your accounting packages. And that list is called the chart of accounts. So here's accounting distilled down. This is the nuts and bolts of how it works. You enter a transaction and you can either enter it manually or you can import it from the bank or however you import into your accounting packages. But you enter a transaction. It could be a deposit. It could be a check or it could be a bill. It could be a credit card charge, whatever it is. But when you enter that transaction, it gets on these two reports, but it gets on these two reports by going to a chart of accounts list first. Okay. So I'm going to pull up the little chart of accounts list. And let me just make this a little bigger and pull up the chart of accounts list in QuickBooks online. Forgive me for those of you that don't use QuickBooks online. I'm just using this as an example of an accounting package. Let me get back here and make this a little bit larger here so you can see it. Okay, cool. So here is the chart of accounts list. So what happens in accounting is you enter a transaction. The transaction hits at least two of these accounts. One of them is a debit. One of them is a credit, but it hits at least two of these accounts. And from there, that transaction hits at least two of the accounts. And then the accounts in this list of accounts on the chart of accounts list, they are the same accounts that are on the two financial statements. So the nuts and bolts of accounting is you enter a transaction hits at least two accounts. Okay. So let's say I'm going to say this again and then I'm going to show you because I really want to hammer this home. Again, I'm really trying to be basic here before we get into something a little bit more aggressive. Let me go to a check. Everybody understands what a check is. All right. So every time I enter a transaction hits at least two accounts, let's say I'm going to pay the phone bill. One of the accounts is the bank account that it's coming out of here. And the other account is the expense account that you're putting down here. So is the bank account going to go up or down? Put it in the chat. Is the bank account going to go up or down? Bank account going to go up or down when I write a check. Put it in the chat. Okay. It's going to go down. What about the telephone expense account? Is it going to go down or up? Is the telephone expense account going to go down or up? Put it in the chat. It's going to go up. So let's take a look at our two financial statements. I want to show you something. So let's say the charge, let's make the charge be $10,000. Make it $10,000. All right. Now, when I save this transaction, okay, and let me make this for 063025. Okay. So when I save this transaction, what should happen to this checking account of 77? What's it going to be after I save this? It's going to go down by $10,000. Now, if I go over to my, if I go over to my P&L to where telephone is, you see how telephone is $4,000. What's that going to do? What's telephone going to be after I save it? It's going to go up. Okay. So I'm going to go ahead and I'm going to save this transaction. Now, when I save that transaction, I go back over here. This says 77, but when I refresh the screen, then it says, whoops, oh boy. There it is. Now it's 67. Okay. And if I go to my P&L, all right, telephone is at 4, I'm going to refresh the screen. And now telephone is going to be at 14. Oh, good Leslie. It looks like people are really getting a lot out of this. My apologies for the people that know all of this. We're going to get you some more stuff in a minute. All right. So I'm going to go down to telephone and now telephone is at 14. Okay. Now I'm going to finish one more thing. I'm going to say one more thing. If telephone goes up by 10,000, what happened to net income? Did it go up or down? Did it go up or down? It went down. So I'm going to go back to my balance sheet. So when I entered that check, did the checking account go up or down? Did the checking account go, it went down. So total assets, did it go up or down? Total assets, did it go up or down? It went down. Now when I go down to the equity section, did net income go up or down when I wrote that check? It went down. So what does total liabilities and equity do? Does it go up or down? It goes down. So the balance sheet still balances. When I entered the check, the bank account went down and net income went down. Does that make sense? Does that make sense to y'all? Okay. Perfect. So I'm going to do a couple more because I really want to hammer this home. Okay. Let's say that I made a deposit. Okay. So let's say I made a deposit. I will go and there's lots of ways that you can enter income into QuickBooks. You can use an invoice. You can use a sales receipt. There's all kinds of things that you can do. But one thing you can do is go to a deposit window. So I'm just going to go to a deposit window. And I'm going to enter a deposit. We'll say it's a grant. And in my webinar that's coming up, we go into all kinds of details, suit to nuts about how to enter grants and point them to expenses and stuff like that. But I'm going to enter a grant. We'll do it for $50,000. Okay. Now, here's the bank account. So the checking count's going to go up or down when I deposit this up. What about this foundation grant account? Is it going to go up or down? It's going to go up. So I'm going to go ahead and save this. Okay. Now, when I look, I'm going to go back to my balance sheet. Here's my balance sheet. So right now it says there's 67 in the balance sheet. When I refresh the screen or just run the report, it's going to go up to 117,000. Now, what happened to net income? Did it go up or down? What happened to net income? It went up. There's net income. It went up from 800 to 50,000. So see the balance sheet still balances. What if you enter a bill? Tell me, I'm not even going to do it anymore. What if you enter a bill? What two accounts? Let's say we enter a bill for an expense. What two accounts for office supplies? We enter a bill for office supplies. What two accounts get effective when you enter a bill to a vendor? This is for those of you that enter bills before you ever pay them. What account gets effective when you enter a bill? Bank accounts do not get, I'm not talking when you pay a bill. I'm talking when you enter it. This is for those of you that want QuickBooks to track your bills so you go to here or whatever your system is and you enter a bill right here. Yeah, it goes to accounts payable. That's right. It goes to accounts payable. So let's look at the balance sheet again. So accounts payable is going to go up. So say the bill was 5,000. This bill would go up. Now let's say the bill is for office supplies. What else gets affected on our books? If the bill is for office supplies, expenses go up. If expenses go up, what happens to net income on the balance sheet? What happens to net income on the balance sheet? It goes down. So payables went up. Net income goes down. So what happened to liabilities and equity? Did it change when I entered a bill? Yes or no? It did change? Let's say it again. When I enter a bill for 5,000, the payables goes up by 5,000. Net income goes down by 5,000. So total liabilities was 167. Does it change? No, it doesn't. It doesn't. It's unchanged. Let's say I'm going to do one more. We wrote a check for computer equipment. What gets affected if you wrote a check for computer equipment that you put as a fixed asset? Cash? Does cash go up or down if you write a check? Cash goes down for computer equipment. So it's big enough. I didn't expense it. I put it as a fixed asset. So what happens to my fixed assets? Does it go up or down? It goes up. And so the balance sheet still balances. You were doing accounting. That's all accounting is. You enter transaction. It affects at least two accounts. One's a debit. One's a credit. And through that process, you get financial statements that you can print out for the board. Now, there's one other thing that I want to create or I want to talk about for you or move this. Where is my P&L? Here's my P&L. Somebody wanted to see the P&L. Here it is. When you run these reports, they exist in two formats, one of two formats. And in QuickBooks, you can pick which one you want to see. Does anybody know what those two formats are of how the financial statements appear? Go ahead and put it in the chat if you do. Anyone know how those formats are? Yeah, one of them is cash based and one of them is a cruel based. So I'm just going to stop right here and I'm going to try and find out what you guys are using. Okay, so who here in their accounting package enters bills before you ever had a chance to pay them? Who enters bills? Who's entering bills? So if you're entering bills, then your books are probably a cruel based. Okay, because what an accrual based financial statement is. It's in a statement that includes all your outstanding revenues that you haven't received yet and your expenses that you haven't paid yet. It includes all your outstanding receivables and payables. Okay, so if I make this, I think I'm going to make this just for one month. 060125. All right, so this is one month. Oh, that's the balance sheet. I got to do it on the P&L. So hold on one second here. Where is my P&L? Here it is. Okay, no, it's not here. And it's not here. Okay, here's my P&L. Okay, so I'm going to make this just for one month 060125. So this is one month of activity. All right, so it says here for the month, I made $26,000, but this is a cruel based. What that means is that this revenue for the month includes all of my revenues, even my outstanding invoices that I've invoiced customers. Now, most of you probably don't invoice customers. In other words, you probably don't. Most of you probably don't use this invoice screen right here. But if you did, then when you looked at the month of June, all the revenues would be there, even the ones you haven't received yet. And then I asked who does bills. If it's an accrual based statement, all of your expenses will be there. Even the bills you haven't paid yet. That's what an accrual based statement is. All right, it includes your receivables and payables, a cash based statement. And in QuickBooks, you can just click right over to cash. What that does is it simply gives me the money that I have gotten in and the expenses that I have incurred are actually paid. Okay, so it's more like money and money out. Whereas accrual based is the money that I've earned and the money that I've expended, regardless of whether or not I paid for it yet, but the expenses that I've incurred. Okay, so I like accrual based better. And if you're trying to match generally accepted accounting principles, Gap tells us that we're supposed to use accrual basis. But many of you may be using cash basis and cash basis is perfectly fine. So cash basis is not real time at all. Tina cash basis is just when did I spend the money as opposed to when did I expense the transaction? Okay, when did I pay for the transaction? Okay, modified cash is you're in the middle, you accrue some things but not others. Okay, Christie says she her board wants them to switch to cash. Well, that's easy. Keep doing what you're doing. But when you print out for the board just change this over to cash because see in QuickBooks you can do both. Okay, so I think I'm going to move on here away from my accounting. Yeah, no worries, no worries. So all right, looks like we've got some people that now I have a bunch of slides here you're going to get the recording, but it basically just explains everything that I just taught you. Okay, so all right. Now the things that you should give your board each month, there are two reports that you should give your board each month. One of them is the balance sheet. But what I like to do and this is just my own personal opinion is when I do a balance sheet. I want to compare it to the prior year at the same time. So let's see here's my balance sheet right here. This is what I like to give the board. So I can see like let's say it's July so you're reporting for June. So they can see how much money is in the bank account receivables and know exactly how much they have. But what's really interesting is to see how that compares to the exact same day a year ago. So a year ago I only had 36,000. Now I have 121,000 to see I think that kind of stuff is interesting and helpful. All right, it really lets you know that we must have made a lot more money. Okay, so indeed that's probably what is happening. So anyway, so that's one thing. Is there anybody who has another question about or as a question about the balance sheet. My Janice is my board appreciates this comparison. Yes. How do you set up? How do you do this? Well, you know, Martha it's hard to answer because I don't know whether you're in QuickBooks desktop or QuickBooks online or something else. So you're in QBO. So I'm going to teach something for everybody in QBO but those of you that aren't in QBO we're not going to appreciate this. I'm just going to do this real quickly. I'm going to go to reports. This is the kind of stuff that this is why it's really important to come to, you know, a bigger training session. But you see over here it says compare another period, previous year, change and run. So that's how it is. I start with a standard comparison in QBD and then I can customize in QBD to add. It's the same way in QBD. All right. All right. So let's see the other report that you're going to want to give them is, oh, by the way, before you actually give them a balance sheet, make sure that the numbers on the balance sheet are correct. Okay. I think that's pretty basic. But what I do is I go through the balance sheet. So this would be four to June 30, 25. And you would, the way that you do that is by reconciling the bank accounts and the credit card accounts, but also eyeballing the furniture or the liabilities and make sure everything is weird. It's not incorrect. Make sure everything is right. Okay. Where does the liability number come from on the balance sheet? So it's a total liabilities accounts payable. That's what gets affected whenever you enter a bill. If you set up a credit card as an account that goes here and you enter charges and the rest of these are done basically by entering checks and bills and or doing journal entries and pointing them to these liability accounts. Okay. All right. And the, that's it for the balance sheet. So the P&L, I want to compare it to a budget. So I do want you, no matter what accounting package you have to go into budgeting and create a budget for your organization's P&L so that you can have something to compare to. So you, in the online edition, you simply click create new. You pick what year you want to create a budget for. This would be the year. If you're year into June 30, you'd be doing this one right now. In the online edition, you click consolidated. And then you fill in the numbers. Now I've got a whole section on budgeting in my three day series and we go over how to budget by month, how to budget by quarter, how to budget by year and specifics on, you know, how to make the process easier. And basically at the end, this is what you should be giving to your board each month. I have a memorized report here. And it is a budget to actual for the board with the actual numbers, the budgeted numbers, and then the variances so that we can see how well we're doing compared to what our plan was. All right. If you get a $30,000 grant to pay for solar panels, how do you want to show the income and expense on these two statements? Well, the income would go here grant income and the expenses is solar panels for for you personally to use. Then you'd want to create an accountant will tell you I'm an accountant to put it to an asset account. But if you want to see it on the P&L create an expense account called fixed asset purchases and point it there. So that you can be able to see it so the board will be able to see it. Okay. Let's see. So that's the P&L compared to budget. And what else do I need to say there's there's something else that is really important. We got about 10 minutes left. How is everybody doing so far we've got about 10 minutes. Give me some sort of a comment or a word who has not learned a thing yet. Who's not learned one single thing. I'm sure there's somebody that hasn't learned anything. I want to hear who you are. Okay. Okay, cool. So this is good. So you're learning. That's good. All right. Okay. Good. Good. Good. All right. So here we go. So if you are not. Well, if you are new to nonprofit accounting. Then things are a little weird in the world of nonprofits. So let me explain something to you. When you are entering a transaction and I'm just going to go to a check. Okay. I'm going to go to a check here. Okay. You probably know that you put the name of the person you wrote the check to here. You put the bank account here. You put the expense account here. But the thing that I want to explain to you is that. If you're not into the world of nonprofits, you came from somewhere else. The only thing that you can really, you really think about when you think about entering an expense. Let's say is what I call the natural category. And that means what it is the object, what the expenses, the natural category. And that's what you put in your chart of accounts list. Okay. The natural category. And that's one thing that you need to track when you're entering transactions. Okay. The natural category. And that's what should be on your chart of accounts list. Okay. And that's what we've been talking about those make up the financial statements. I'm just kind of guide you into what your chart of accounts should have. Give me some examples of the natural categories in your chart of accounts list, both either for income accounts or for expense accounts. Just name a few. I'll name a couple. Salaries and wages is one landscaping supplies, utilities, office expense, telephone contractors, insurance, repairs, office supplies, music program. Stop, stop, stop, stop, stop. Music program is not a natural category. What did you spend for the music program? Did you buy supplies for the music program? Then the natural category is supplies. Did you pay rent for the music program? Then the natural categories is rent. You should not have an expense account that is a program. Okay. So rent, postage. The second thing that you need to track, the second thing that you need to track. And this is something that nonprofits that aren't houses of worship have to track. Everybody else has to track this thing is the function of the activity, the transaction. Natural category is the object. We'll take that music program. What you're supposed to put here is what type of expense. What's the natural category? It was supplies for the music program. You're supposed to use the class feature if you're using QuickBooks to say whether it's program, admin, or fundraising. And if it's program, which program it is. So basically what I'm trying to tell you is in addition to saying what the natural category is of the transaction, you have to put it in one of three buckets. And those buckets are program, admin, and fundraising. Unless you're a house of worship, then you don't have to worry about it. But the rest of us do. And the reason why the rest of us do is because if for no other reason we have to fill out nonprofits have to fill out a tax return called a 990. And the 990 breaks out your expenses into three groupings. They are program management in general with some people call admin, some people call overhead and fundraising. And so your expenses have to be reported not only by object, which is what they are payroll taxes, salaries, accounting, office advertising. This is rent, travel, but they also have to be pointed in these columns. Is it a program management or fundraising? Okay. And if they total it at the bottom and people look to see whether the majority of your money is going for program stuff as opposed to admin and fundraising. And in my three day webinar series, I go into great detail about which expenses are really more programmatic in nature versus which are admin versus which are fundraising. Like your subscription to QuickBooks, that's admin, your subscription to TechSoup, that's admin. All right. Whereas most of the other expenses that you have are probably program in nature, but we should use the class feature program a program be admin fundraising. Every single one of you, unless your house of worship should be pointing transactions not only to the natural category. We'll go to a bill this time, which is whatever it is here will say liability insurance, but also you should be using a separate list in QuickBooks. It's the class list to say whether it's program admin or fundraising. And yes, it is true. Some expenses like liability insurance on the office should probably be split between your programs admin and fundraising. QuickBooks allows you to do that. Okay. Management and admin. Is it the same as indirect costs? It is, but you don't necessarily account for it if you're trying to use indirect costs for a grant. That's something that I go through when I'm teaching my grants webinar. But anyway, the third thing that you need to track, well, let me just show you here. This is where you put the natural category when you're entering a transaction. You use the class feature to say whether it's program admin or fundraising. There's one other thing you need to track about an expense in particular. What's the natural category? What is it program admin or fundraising? What's the third thing you might need to track? Anybody know what the third thing that you might need to track? What grant pays for it? Yes, ma'am. Peggy in kind does show up as an income account. What grant pays for it? That's right. So if you have grants that you need to track and you need a little P and L for a grant, you use this last field right here, which is the customer field. Now, I don't know how it works in other accounting packages, but all I know is you need three different fields because there's three things you got to track. One, you got to track the natural category, which goes here. One, you got to track whether it's program admin or fundraising. And then finally, what grant pays for it right there. Those are the three things you need to track. Yes, you can track in kind in the QuickBooks Online. It's one of the things that I go through in my three-day webinar series. I'm going to go to QuickBooks Made Easy. I'm also going to pull up a poll question here for you. Let me go back here. I'm going to launch a poll here. Would you like to receive a quick tips newsletter once a month? And this is for those of you that want, you feel like you can learn from me and you want to learn more once a month, sometimes twice a month, I'll come up with a little video tip. Ultimately, it ends up in my YouTube page, but I'll send it directly to you with a little quick tips e-newsletter. If you say yes, you want it. Go ahead and put that. Then Aretha will give me your email address so we'll be able to add you to the list. So should an in-kind donation ever be added to a restricted revenue account? So Sandy, you shouldn't even have accounts called restricted and unrestricted. So that tells me that you definitely need to go for the training. I'm going to go to webinars right here. And those of you that are using QuickBooks Desktop, we're doing the webinar on October the 31st, the first and the second. Those of you that are doing the online edition, it's November 7th, 8th and 9th. If you click on either one of these, it's going to tell you every single thing you need to know about what we're teaching. Look at all the stuff that we're teaching. On day three, tracking pledges, tracking restricted grants, how to end a special fund raising events in kind contributions, how to get donor thank you letters from people, but we also are doing the basics. Setting up the correct accounts, entering your programs, entering your budget. Day two is real nuts and bolts, entering all the income and the expense transactions. So it's normally when you sign up for this thing, $2.99. So I'll just click here that I want to get a ticket. You can also get a VIP ticket, which gives you tech support with us as well. And then you can call us with questions and stuff. But anyway, it's 2.99 normally. The discount is, let's see, I've already done all of that. Here we go. The discount is TS 40 off. That's TS for TechSoup 40 off. If you put that in, you will get $40 off of this three day webinar series. Okay, so please write that down. And House of Warships. So House of Warships, for those of you that are House of Warships, I've got a training product just for Houses of Warship. Okay, we just did a live webinar, but I have an on demand webinar, not on demand. Yeah, on demand. And it's down here. It's called Houses of Warship. This tells you exactly how to set everything up and track everything. If you're a House of Warship. We pay particular attention to all of your funds, all of the designated funds and the restricted funds. They want to see the code again. The code is TS 40 off, TechSoup 40 off. This code is good until Saturday, October the 14th at midnight Pacific time. And if your QuickBooks desktop users, October 31st, 1st and 2nd, it's two and a half hours each day. It starts at 2pm Eastern time. We take two breaks, we'll listen to music, we'll have fun. And it's the same people each day. So you'll be able to play around with what you learned on day one, come to day two. Yes, you get the recordings afterwards. Okay. All right. I think I'm done. I'm going to turn it back over to you, Aretha, to finish us off. Awesome sauce. I'll email everybody the slides tomorrow and the recording. So those of you who missed the code, maybe you just missed it. You'll get some more on those who see it on the replay. Thank you, Greg. Thank you, everybody. We'll see you on Thursday or October 17th. You're coming back, Greg. Oh, am I? I didn't know that. What am I teaching budgeting? How to download QuickBooks. Downloading. Okay. That's just for QuickBooks. All right, guys. Thanks so much. And hopefully I will see you at the end of the month for the three day webinar series. Take care. Bye. Bye.