 In this presentation, we'll take a look at some of our standard financial statement reports including the balance sheet and income statement and how to customize them for our not-for-profit organization. Let's get into it with Intuitz. QuickBooks Online. Here we are in our not-for-profit company or not-for-profit organization dashboard. Now we here are going to be looking at the end result having already populated the information. Since you're starting off the information, you may want to go then into the test drive file instead. And the test drive file is for the company of Craig's Design and Landscaping. It will not have the same numbers in there, but it will have some numbers that will be populated so you can practice navigating within it. You can find it by searching for QuickBooks Online Test Drive. Back to our not-for-profit, let's take a look at Excel to see what our objective will be. Now we're going to be considering the end result, the reports that we will be banking. For a standard company, for a company type of file and not-for-not-for-profit, we would have a standard income statement and balance sheet being our major two reports that we would be constructing with the data input. Note that if for a not-for-profit, we're going to name them differently, but they're going to be very similar in nature. So we're going to have a statement of financial position and a statement of activities. The statement of financial position basically being a balance sheet report, so it's going to be pretty similar, pretty much the same thing as a balance sheet report, right? We've got the assets, then we're going to have the liabilities. The major difference in terms of the terminology, besides the name being a bit different here, is going to be of course the equity section. And that's going to be similar. You can think about this for different types of organizations being different as well. So proprietorship, it might be called Soap Owner's Equity. If it's a partnership, it might be called Partner's Equity. If it's a corporation, it might be called Stockholders' Equity. And they all have kind of different challenges with them. Here, it's going to be called Net Assets to not indicate basically a profit, I guess, is the assumption. But Net Assets makes sense, of course, because Net Assets, you can think of the accounting equation being in the format of Net Assets being kind of like the book value of the company. Assets minus liabilities giving us the Net Assets, because that's kind of like the value of the company, which we then need to break out to these two categories, which we'll discuss as we go through the course. And that's going to be with donor restrictions and without donor restrictions. So that's kind of the challenge on the statement of financial positions. And there's a few more challenges on the statement of activities, which is basically the income statement type of report. And we talked about them briefly before. The income statement is performance. So we're talking about how did we do over time? And usually when we think about that from a for-profit, we're thinking how did we do from a revenue perspective in the generation of revenue? But here, because of that different perspective, we're thinking about how did we do in cash flow and being able to apply our resources to the items that we're supposed to be applying them to, which in essence are the programs. So we've got revenue and expenses, same format that we would expect to have, giving us net income, but now the term isn't going to be called net income. It's going to be called increase in net assets. So notice some of those terminology things are going to be a bit of a challenge for us in QuickBooks online. We'll have to basically think about how we're going to deal with those and customize our reports for it. We also may have to break out between items with restrictions and without restrictions. And we'll talk about that. That's going to be another challenge, which again we'll use the class tracking tool for. We'll also be needed to break out our expenses by what they're used for in this case, which again is different because in a for-profit they're used for profit, right? That's why we have expenses to help generate revenue here. We got by program and then the management in general and the fundraising. And then we also need them by function so we have another report up top. So let's take a look at our financials in QuickBooks then. So if I go back on to the reports on the left-hand side, we're going to go to the reports on the left-hand side. We'll be jumping to the financial statements. The financials pretty much every time, every time we do a transaction, we'll consider, okay, what's the effect on the financial statements? So we'll spend a lot of time with our standard financial statements, that being the balance sheet and the profit and loss. Let's open them now. So we're going to go into the reports. Now they're going to be up top generally in the favorite reports. They're favorites because they have a little star next to them. So they have a star next to them. And by default, those ones already have a star next to it. So if you were to find them, they're going to be down here in the business overview. And there's the one with the star right there. And there's the profit and loss by class. It has the star and the profit and loss. Therefore, they're up top where they should be, really, because we're going to, these are the major financial statements, right? So then let's go into the balance sheet. Let's open up the balance sheet here. And here is our balance sheet. Now we're going to be working in the month of January. So I'm going to change the date from 010120 to 013120. And that's how we're going to change the date. The month of January, it may be different. And Craig's design work with whatever date is there. So you can populate your reports. Then what I'm going to do is I'm going to do something that we're going to do a lot in the course. And that's going to be to copy or duplicate the tab to be able to be working on different reports at the same time. Great tool to have with QuickBooks Online. And that is you're going to go and hover over the tab up top, right click on that tab, and then duplicate that tab. So hover over it, right click, duplicate. That will open up another tab that will have the information in it as well. And that way we can jump back and forth. I can have the balance sheet then on this side, and then I can go back to the left-hand side and open up another report, such as the income statement or P&L profit and loss. So here's our balance sheet. Let's go back to the tab to the left then and open up the profit and loss report. I'm going to go down to the reports again. So I'm going to the reports on the left-hand side. And then we're going to be opening up our P&L, the profit and loss, also a favorite report. So we're going to open up the profit and loss. You might hear it termed as P&L, profit and loss, income statement. And then of course for not-for-profit, it's going to be the statement of activity. So these are the two major reports that we're going to basically adjust to fit our not-for-profit organization needs. And one of the adjustments will of course be the name of the not-for-profit organization. So let's put this January 1st through 013120. So we'll make it for the month of January as well. There's our not-for-profit. There's our income statement. Now I'm going to go back up top. I'm going to right-click on this tab and duplicate this report again. So I'm going to duplicate this report. So now we have the balance sheet. We're going to have the profit and loss. And then we can do stuff on the left-hand side. This is how I would normally tell you to work in your system, because this allows you to do the data input over here, jump to the financial statements, refresh the financial statements, and see the effect on the financials. The more you do that, the better idea you get of what's actually happening, the more you're engaged, the more your mind is involved. As you work through it, the less likely you're to be able to make a mistake, and the more you'll be able to pick up. It's just, it's funner to do that way. If you know what the data input is and you know the effect on the financial statements, and then you can go to the financial statements and look at what has happened as you enter the data, it's also a more engaging activity. Let's go back over to the balance sheet. Now I'm going to close up the hamburger. Here's the hamburger over here. Note that the financial statements have a course of our end result. This is what we're basically creating. Now I'm going to hold down control on my keyboard, and I'm going to use my little scroll bar over here, and I am using Windows to do this, a Windows computer. So I'm going to scroll up, and this is going to go into 125. So I scrolled up and I'm zoomed in. When you're on the reports right here, that zooming in feature, great feature to have. When you're not on the reports and you're doing data input into forms, you pretty much want it on 100%. Otherwise QuickBooks Online could do some funny things, but it's a great tool for the reports. Now when we look at the balance sheet, note that we can change the name here, that's one thing we'll change, and we can customize this report. We see that the balance sheet has just like a for profit, assets, liabilities, and equity. I'm closing up the little triangles so you can see the bare bones of it. Assets, liabilities, and equity. Note we have some issues with the name. So the equity down here, we would like to call it net assets for purposes of QuickBooks. Can't really change it here because this is part of the programming in the system to have it in this format. The name we can change up top, but this is going to be one of those things that's kind of difficult to change because it's part of just the format of QuickBooks. We'll talk more about that at the end when we format these reports and we'll do a lot more formatting of them. But just to take a look at the balance sheet, if you open up the balance sheet, then you've got the current assets and the fixed assets. If we open up the current assets, then we've got our bank accounts and so on in our accounts receivable. And then the other current assets, that would be similar to a for profit organization, the fixed assets, depreciable assets being here. Then we have the liabilities, and again, liabilities, pretty straightforward liabilities, similar to a for profit organization, something that we owe to a third party outside the organization. And like we say, the difference is the equity section. So you can't really change the name of the equity, but you can change the equity type of accounts from something like a retained earnings or capital accounts to the net assets restricted or unrestricted. So we'll make some adjustments to this report and we'll see that in a second here. And then the P&L, if we go to the P&L, the profit loss, this is gonna be, let's close up the hamburger. A bit more of the challenging reports because we gotta record the classes here. So if I was to close up this item and this item, we have, once again, income and expenses. That's the bare bones of an income statement. And obviously we would change the name to the statement of activities for a for profit. We can do that. That's not a problem and save that report. And then we have the income and expenses. What we can't really change down here is the net income line, which a not for profit causes change in net assets because this is, again, not a, it's not an adjustable field here. We can do those adjustments in Excel. It's not too difficult to do and we'll show you how to do that at the end of the course. We'll get into that at the end, but just here's the major form that we'll be taking a look at. This is what you would normally see in a for profit, just one line here saying income minus expenses and a for profit type of organization gives you your net income. It's all has the same goal of revenue generation in a for profit. In the not for profit though, we wanna break this out as we saw over here. We wanna break this out into our two columns which are restricted and non-restricted items and then the total. So for that, we're gonna use our classes. So I'm gonna go up top and we're actually gonna be using our classes. So I'm gonna select this little dropdown and open up classes and then run that report. And that's what's gonna give us this added dimension and now we've got a bunch of classes here because we're gonna have the categories of the restricted items. So in essence, we've got all the categories of the restricted items and then the total restricted items here. And then we've got all the categories of the unrestricted items and the unrestricted items here and then the total. So this classes features what's gonna add to us. It's gonna give us that added dimension that we can then break out this information in this kind of format. So we'll talk more about that as we go. That's gonna be one of the major tools that we will use. Also note, this will allow us to go back and forth and add a report that's gonna be reported by function for the expenses as well as by nature for the expenses. So these two reports again, we'll break this out using the classes feature. Now we also might want more information on the restricted items, the types of restrictions, which we can use classes to do. So I'll show you how to do classes to do that. Or we can also run this report by customer and run this report. So I'm hitting the dropdown. I'm gonna run it by customer. And then this could be another way that we can track basically, this will be using a job type feature to track the restricted items. So this is kind of a confusing thing. This is the new thing that we're gonna use this other dimension to figure out these reports, the job crossing features and the job cost kind of features that I would call them a job cost type of feature and the classes feature to track this information and give us the more detailed reports. Okay, so also note, I'm gonna go to the tab to the left now that if we go down to the reports again, as we make these reports, we can then customize these reports. So I can customize these reports. And once we have created this, I'm gonna hold down control and scroll down to get back to 100%. So once we have created these reports, then we can make them standardized. So I have them down here, statement of financial position. I could simply open up the statement of financial position from the custom reports. And then the name is already there at the statement of financial position and all the formatting that we can do within QuickBooks is already there. We can't do all the formatting. Notice down here, I changed the names of the accounts, but I can't change something like the equity up here. There's some things that I can't change within QuickBooks. They're not the end of the world. We just have to, you know, they gotta recognize that QuickBooks has some terminology that will not be exactly transferable to the not-for-profit and it is what it is. Now you can change it pretty easily by simply exporting it to Excel and changing it, which without too much added work and we'll show you how to do that. So we'll go and see what at the end of the course will generate the reports and we'll see what QuickBooks can generate and what you can give out there. And then what you can do with some formatting if you put it into Excel and just do some adjustments and how you might present this information as well. So we'll get into the formatting, the presentation, how to give the reports to two individuals and how you can distribute them at the end of the practice problem. So that's gonna be this item and if you go back to the reports then, we have our other forms as well, the statement of activities and the restricted net assets. So we have all these reports that you can then save. So once we've customized them, we'll show you how to save them as we go as well. Now to generate these reports, we're gonna be using of course these forms. These forms mainly like an invoice type form which we'll customize and a sales receipt type form, deposit type forms and expense and check forms as well as bills. These are the things that typically are gonna be the building blocks. These are the things that create the actual journal entries that will end up in the end result of the profit loss and the balance sheet, the end result of the financial statements. So every time we enter something like this, a bill, an invoice and whatnot, we wanna think about what's the effect on the financial statement so we can get a nice idea of what that relationship is and that's how we'll construct the financial statements in a step-by-step process, seeing these forms and considering the journal entry as well, jumping over to Excel and figuring out, okay, what are the actual accounts that are affected in just basically a journal entry type format? What are the increases and decreases? We won't talk about debits and credits too much but we'll just say, hey, this account's affected, that account's affected, debit and credit increase and decrease to the account. That's what's happening when we do these forms and you can see that on then the financial statements and then drill back from the financial statements back to the source document to get a really good understanding of what is happening. So that's gonna be it for now, let's get out of here.