 In this presentation, we're going to record a pledge into our not-for-profit organization. Get ready because here we go with zero. Here we are in our not-for-profit organization dashboard. We're going to go on over to Excel to see what our objective will be so we're on tab three within Excel. Now it's important to remember that a pledge is not going to be a donation really at that point in time because we have not yet received cash and it's also not going to be the same as a business transaction where we would typically record an invoice because there hasn't been any exchange that has happened, but there's going to be a similar kind of transaction as if we were to invoice a client for a for-profit type of organization. So just for the comparison, if we did bookkeeping or landscaping or something like that or if we sold something like a good or service, then typically we would have done the work and you can imagine billing or invoicing the customer for it and then they would owe us money at that point and they would pay us in the future. Now when you're talking about a business type of transaction, there's going to be a requirement to pay us in the future because we did work. We did work and therefore we have some kind of recourse if they do not pay us because there's been basically a transaction has taken place in that case. However, in a pledge type of situation, we're not for-profit organization. Therefore no work has really happened here other than us, you know, it's work to try to get a pledge for sure, but notice that we haven't actually provided anything to the customer. So that means that it's just a promise at this point in time and that's going to be a little bit different. So we want to make sure that we don't indicate it as basically, you know, the same thing as a receivable in the collectability of it and whatnot. So that might affect basically the collectability and definitely could affect the recourse that we might have if we have problems collecting on pledges. So a pledge promise to pay, but we're going to record it in a similar way as an invoice would be, which would be a service type of invoice, which means we're going to increase the receivable account, which we could call contributions receivable here. The other side is going to go to some kind of income account. Now here, we're going to record it as a restricted income for a time restriction. And this will just, this will basically reflect the fact that this isn't really income right now. It's basically restricted until we, until we get it. So we're going to put this into a type of restricted income. First time we've done that so far. So the accounts that would be affected if we were to post this would be a receivable goes up. We want to be able to track those receivables by who owes us money, what would be called customers or in this case, donors or pledgers. And then down below we have the revenue account, but we're going to put it into a different revenue account, still contributions, but with donor restrictions. In other words, we're going to say it's restricted due to a time restriction because we don't yet have the cash yet. So that's going to be our item that's going to be increasing here. And then the income statement in essence is going to go up in total. However, we want to be able to break this information out when we consider the income statement or the statement of activities by restricted items versus not restricted items without restrictions and with restrictions. Now we have a breakout between the two that we want to be breaking out. All right. So let's do that. Let's how could we do that over in zero? What we're going to do is we're going to use our tracking feature to do that. So we're going to go back on over to zero. We're going to hit the plus button up top. We're going to be making an invoice. So it's going to be an invoice. It's still called an invoice within the zero system, but we kind of customized it to make it like a pledge type of form. We could find that in the branding. So if I go to the branding dropdown over here, then I'm going to go to the pledge type of form. So I'm going to go to the pledge type of form. And we're going to say this is going to be going to a pleasure. I'm just going to call pleasure one. That's going to be the pleasure, the people that's the person that's going to be giving us money, the pleasure. And then I'm going to say the date is January for or January, not first. We want. Whoa, whoa, whoa, it went way crazy there may go off of that. Go back on here. We want January 3rd, let's go January 3rd. And then the due date, I'll just make February. So when do we expect it to be to be given to us by, I'm going to say February, let's say 3rd. And then the invoice number, I'll keep that branding is going to be, we want the pledge form. All right. So then we're going to go back down to the item down below. Now I'm going to add another item, which, as you recall last time or in a prior presentation, we had an item that we created for the sales receipt when it was a donation. People giving us money. Now it's a pledge. I'm going to make another item here for a pledge, I'm going to say pledge. And the reason is it can't be the same, the same item because the donation went to a different income account. Hold on a second, I have to hit the drop down and then say new. So we have the donation there. We need a new item and this is going to be a pledge. You'll recall that these items are basically kind of like income. They would be inventory or service items. Hold on, I'm trying to spell this right. I can't spell and think like other stuff at the same time or I can't spell with anyway. Okay. So this would be similar to service items or inventory items. We're going to set up, but we're going to set them up as pledges here. They're acting in a similar way for a for-profit organization. We're not going to have any unit price. You could have a different tiers of pledges if you so choose. If you have a standard set of pledges. You could put different items for those standard sets and then you can have a price that would then populate automatically. Then I'm going to select the drop down. We need a contributions note. We have a contributions here. We need another account. We want contributions that are restricted this time. So I'm going to put contributions restricted. I'm going to select the drop down then and say now we want the contributions. This is going to be a revenue type account which we call sales. I'm going to make it a sales type of account and it's going to be four zero one zero. Let's make it because the other one was four thousand I think. So four zero one zero the short name. We're going to say contributions and this time it's restricted. So these are restricted contributions and then I'm going to say that looks like good. So I'm going to say save here. We'll say save. And then so there we have it going to that account pledge. So we don't need any purchase item. We don't need any track item down here. We're not actually selling it but this is again equivalent to what we would be doing for like an invoice that we sold good as their services. This would be like the service that we would have. So we're going to say save then save. There's our pledge. There it is unit price. So the unit price how much was it for here. Let's go back to our journal entry because that's where the numbers are at. And we have the 108 the 108 now remember you could think of this as multiple pledges happening that would add up to the 108. We're just going to put one like a large pledge but all of them would be doing the same thing. So there's the pledge. We don't have a discount contributions restricted that looks good. And then we're going to say this is on the restricted side in terms of our categories. So let's put this in the category of restricted select the drop down and we're going to say it's a time restriction. So I'm going to say time restriction tab. Okay. So what's this going to do is a little bit complex as an invoice but it's an invoice that's going to be in the format of a pledge document. That means that accounts receivable of receivable accounts going to go up balance sheet accounts showing that people owe us money. Other side on the income statements going to be revenue but now it's going to go to a new revenue driven by the pledge item which is going to be the contributions restricted revenue account. So it's going to go into the restricted column if we were to break this out by category restricted column in more detail restricted by time. All right. Let's do it. Let's check it out. We're going to say approve. And then we're going to go to our reports and see if that is indeed what happens. Let's first make sure it records. Okay. Okay. Green thing up here. That's green is usually meaning we're good. I'm not even going to read it says it's good says invoice approved. So I read it. But that's still good. We're going to go into the accounting. We're going to go down to the balance sheet. Let's open up the old balance sheet here. And then let's change the date going to hit the date drop down bring this on out to January 31st January 3 1 2020 update. I'm going to hold down control and see if I could scroll in a little bit make it a little bit larger. I'm at the 1 2 5 1 2 5 on the zoom feature. And there's our checking accounts. So there's the checking account now there's the new thing. There's the receivable. That's the new thing that's happening. Other side's going to be in the equity because it's in the it's in the income section. So the accounts receivable if we were to select the accounts receivable then go into that AR that accounts receivable account. We will see the detail. There's our accounts transactions and then we could go into of course our invoice so the transaction is an invoice because that's what we made but it's really a pledge form someone promising to pay us money. So there it is. Now is to open it up. I could like print this as a PDF. Let's go ahead and print it as a PDF and see what it looks like. So would you like to mark this invoice as sent I'll say yeah we sent it and then open it up and so you can see here we could send this out and we're still basically saying hey it's an invoice give us money but it's work it's a pledge. We renamed it as a pledge that's what we did when we customized the form. So it's a pledge form. Would you give us money down here we have a little payment stub thingy and of course it looks a lot like an invoice to give us to give us the money. OK so then we're going to close this back up. I'm going to go back to our forms I'm going to go back and then back to the balance sheet then I'm going to go up top going to duplicate this tab. So let's right click on this tab let's duplicate this tab so I'm going to duplicate the tab then we're going to go back to the tab the left we're going to open up the income statement now by going to the accounting drop down and scrolling on down to that income statement. So let's open up the old income statement and then if I scroll down note I have it broken out in this format we have the contributions restricted and unrestricted so it's broken out by two separate accounts but you'll also note that we would like to have it broken out by the two categories which we can do so we did a little bit in a redundant type of way. Let's go over to Excel. I'm in Excel now and I'm going to go down to our statement of activities here so we have it we want it broken out this way as well. Because here I didn't I don't have two accounts on this on this statement of activities I just called it contributions and broke it out by column so by adding another account in other words we're being a little bit redundant but I like that because it's kind of a double check for us so if I was to go back over then we can sort this report using our report settings up top and we have our our categories of unrestricted and restricted I'm going to get into this in a little bit more detail in a future presentation because I want to spend a little bit more time on it than we have here at this point but we will take a look at that in a second in a future presentation so we can break these out not just by a one column report but start to think of how we can format this report with added columns now the other report I want to take a look at if I go back up top let's duplicate this tab right click on the income statement tab duplicate it then if we go back to the balance sheet note that we have this accounts receivable of the 108 now so if we go back to the first tab first tab and we go to the accounting drop down take a look at our reports we'd also want to be tracking who owes us the money so for that we could take a look at the age receivable detail let's say let's go into the aged receivable detail report open that one up and that'll help us track who owes us the money so there's the 108 thousand in the name it's just Pledger one because we recall the Pledger one and that of course should tie out the total of this report will tie out to what's on the balance sheet in the accounts receivable also note that we could rename the receivables if we so choose we had over here that it was what did we call it Pledger receivable or contributions receivable and over here of course it's called accounts receivable so we could change accounts receivable we could simply go to the chart of accounts and change it the key point here being that it's still an accounts receivable type of account so I won't do that now but we could just go and adjust the account name as we've seen in the past so I'm going to go back to the first tab again we can also track the contacts now notice these are we could think of them as customers if it was a for-profit they're pledgers for us here really so we're going to say contacts we can look at all the contacts so if I go to contacts on the left and then all contacts now contacts generally include the customers people that are going to give us money like the donors and the pledgers and then the vendors people that we pay so then if we go into our customer tab within our contacts there's our pleasure once again of the 108,000 so that's going to be it for now let's get out of here