 In this presentation, we're going to set up and analyze the function of purposes within our accounting software. The purposes are going to be similar or serve a similar function as the items like inventory items and service items in a for-profit organization. Get ready, because here we go with Aplos. Here we are on our not-for-profit organization dashboard. Last time we were over here in the accounting section and we set up our chart of accounts and we set up our tags. Now we're going to be going into the donations section. We're going to go into the donations. This is going to be our revenue type of section if you're thinking about this as a comparison to a for-profit type of organization. This is how we're going to be generating revenue with those donations. A couple of things we need with those donations, of course, is to track those donations and be able to record them from an accounting standpoint. We want to record them from an accounting standpoint, track them so that we can give the donation reporting to the donors as well. To do this, if you think about this, it's similar to a for-profit organization where you're going to have the donations happening. In a for-profit, you're going to have revenue. In the revenue, you have service items and inventory items. When people give you money for a for-profit, it's because you gave them something typically as being a service or goods. We talk about the not-for-profit organization. We have a similar process. We need a similar type of transaction document. Now the transaction documents for a for-profit are going to be the invoice and something like a sales receipt that you can imagine giving at the point in time of the donation of the transaction happening. At a cash register, you get a receipt, a sales receipt type of transaction. When we think about accounting software, oftentimes you think in terms of forms such as the forms or the things that are oftentimes will be generating the actual reporting on the accounting side. From a QuickBooks standpoint, the invoice would be generating the revenue transaction and the sales receipt form would be generating the revenue transaction if it was a cash transaction or non-cash transaction here. We're going to be calling that and to drive those, then it depends on what we sell, like the service item that we sell. We actually set up these service items to help us to easily populate things such as the invoice and the sales receipt in a for-profit organization. Here we need to set up a similar thing in that we're going to have contributions, which is kind of like the sales receipt. People just gave us money, so similar to a transaction happening, but it's a donation. We didn't give anything back except our time. Then they gave us money. That's going to be a donation, which is kind of like a sales receipt you might see in a QuickBooks type of setup. Then pledges are going to be similar to kind of like an invoice because an invoice would mean that we did work, we built, someone haven't got paid yet. A pledge would be the same thing. They're promising to pay us in the future. Again, we didn't do work necessarily. It's a donation in the future. They're pledging to give us money at some point in the future. Alright, so to do that, to populate those forms, we want to set up something similar to service items. Something similar. If we did bookkeeping or landscaping, we might set up the service item as our landscaping service, or this or that. If we sold inventory, then we'd have the inventory items. So we're going to be setting up then our purposes over here that'll help us to populate the forms for the major revenue forms like the contribution and pledges. So we're going to go to purposes up top, purposes over 100 donations and then purposes. We have two are the defaults here. So we got in kind donations. I'm going to go ahead and delete the second one. You could see it's not linked to anything at this point. I'm going to delete that one. I think that's kind of an example one. So you know you could delete that. Then you have the general purpose. That's going to be our default kind of donation. So I'm going to go into the general purpose and you can keep you could expect this to be like the norm. So if our organization or organization has two goals, we've got the education and we got the community service. Now if someone just gives us money, then we expect that we can spend them that money any way we want in order to achieve those objectives that we have, which are our programs. And then of course the supporting necessities of the admin and what not in fundraising in order to support those programs. So I'm going to say general basically means that right if we were using just general people just gave us money. They say hey I know what you know your objective you could spend the money in any way you want. And here it is as long as it's going into you know the purpose that you have set up the not for profit to be doing. And so and then of course if they give us money and put restrictions on it, that's when we're going to have restricted items. So the general item would be most to use that would what we would hope to be most to use people be giving us money for not for profit purpose and not giving us any further restrictions on how to use that beyond the use of our not for profit. So I'm going to keep the name general description we're going to say general purpose and then I'm going to scroll on down and you'll note that the accounts now pick the account 400 and that is actually the restricted account. So I think it was for 104010. Is it contributions restricted now note you don't really have a drop down when you first start but if you start typing in like four thousands. That's where the income start items are. So if I just put a four then I can then get our information or if I was to start to type in contributions will start to get the drop down and that should give us enough to populate this. So I'm going to say 4010 and then the fund that we're going to put this in is going to be unrestricted. So we can imagine when we use this and when we use this to populate our contributions forms the contributions form itself will generally usually increase the cash account. That's going to be usually what a you know contribution form does you know cash is going to be going up we got a contribution. The other side of the transaction from a journal entry standpoint is going to go into this account 4010 contribution unrestricted when we use this kind of like item kind of like a service item this general purpose contribution service item. And then if we go into the fund it's going to be increasing you can imagine the income statement being broken out to the two columns now those two columns being restricted and unrestricted. It's going to be going to the unrestricted column here that's what the general kind of contributions will do. So I'm going to say save and then we'll have that. So there it is you can see it's kind of linked up so we have everything linked up there. So now what's going to happen is when we go to the contributions which will do in a future presentation. We'll say we're going to make a contributions drop down contributions then we can add a new one I'm going to say add a new contribution. I'm not going to complete this one. I just want to basically show it here. Now when you see a contribution eventually the contribution again is going to be going it's cash going up it's going to go into the bank account at some point in time. So we'd have the contact which is basically a customer or donor we would say then the purpose we can select a purpose here and this is where I'm going to put the general. All we have right now is the general meaning the donations are just going to be the general donations will put in more donation restrictions later. For restricted donations if someone gives us money and restricts it in some way. But right now we're going to say a donation is just going to be picking that general. That means that when we do the contribution basically a journal entry standpoint cash is going to go up this thing is kind of like the item for like a quick books which is going to be driving the other side of the transaction. Which means it's going to be going into that income account the income account that's unrestricted. And then we also said through this line item that that general category is going to be going to the unrestricted unrestricted category or fund which will allow us to break out between restricted and unrestricted on the income statement. So you'll see how easy it is then to make this contribution form if someone was to give us a contribution. You know you don't need any expertise to just basically fill this out why because we've already set up all the difficult components we set up how to put that you set up the general ledger account the funds and then any tags and then we set up these items which are kind of like the inventory or service items for a not for profit organization. So that the collection of the donations very easy you just enter the contact and you can enter this information the transaction. Should take place and record itself and we'll talk more about completing this form later and then at the end we don't need to know anything about the setup process to do the data input. That's the goal someone who's collecting donations we don't want them to have to know how the setup process happened or how the how the reports are going to be affected which we discussed you know how the two columns and broken out like that. All that's going to be set up given our setup factor with the funds being set up correctly and now these items so these are the critical building blocks to get the thing working right so that the data input will be easy so we'll talk more about data input in a future presentation.