What is the best way to set up budgets for a nonprofit company that is on calendar year and some grants that are on different year ends, such as 06-30?
Because QuickBooks budgets only span a single fiscal year, I recommend using Estimates for multi-year grant budgeting.
1. Turn on the estimates function at Edit > Preferences > Jobs & Estimates > Company Preferences. You may also want to turn on progress invoicing if you will be invoicing the grant in stages.
2. Create a Customer for each granting agency and a job for each individual grant. Go to the Customer Center and click on New Customer & Job.
3. Create double-sided service items for each expense category of the grant. Go to Lists > Item List, click the Items box and select New. Make sure to map them to both a revenue and expense account by checking the box next to "This service is used in assemblies or is performed by a subcontractor or partner".
4. Create an estimate for each grant. Go to Customers > Create Estimates. Select the Customer: Job you created for the grant. Add a line for each expense category you created and enter your budget expense in the Rate column. You can use the Markup column to add a % for overhead expenses, but most granting agencies like to see this broken out in a separate line.
5. You can send your estimate to your granting agencies as a grant proposal by selecting either print or email. You can customize it--change columns, headers/footers, etc.--by selecting Customize, and then Additional Customization.
6. Once the grant is accepted, you might want to consider turning it into a sales order so you can keep track of grant proposals vs. accepted grants. First, turn on the sales order function at Edit > Preferences > Sales & Customers > Comnpany Preferences. Once you do, you can turn an estimate into a sales order by clicking on the little down arrow next to Create Invoice.
7. Make sure to use the items you created for each expense category on all your purchase transactions. All the purchase forms (Enter Bills, Write Checks, Enter Credit Card Charges) default to the Expenses tab, but there's an Items tab just to the right. Select the Items tab, enter the item for the expense category you're paying and enter the customer:job for the grant. If it is a reimbursement grant, keep the Billable box checked. You may also need to turn on the "Create Invoices from a list of time & expenses" function at Edit > Preferences > Time & Expenses > Company Preferences. Note: You can have both Expenses and Items on the same purchase form if you are making a payment for both grant and non-grant expenses.
8. If you are making purchasing or using subcontractors on behalf of the grant, you might want to consider using purchase orders. First, turn on the purchase order function at Edit > Preferences > Items & Inventory > Company Preferences. Once you do, you can turn an estimate into a purchase order by clicking on the little down arrow next to Create Invoice.
9. You can turn an estimate into an invoice by selecting Create Invoice. However, if you turned an estimate into a sales orders you should create the invoice from the sales order instead. Otherwise, the sales order will always remain open. If it is a remibursement grant, you should create the invoice at Customers > Invoice for Time & Expenses.
10. Use the Job Estimates vs. Actuals Detail report (Reports > Jobs, Time & Mileage) for your grant budget report. You can change the title of the report by clicking on Modify Report and selecting the Header/Footer tab. Other useful reports (depending on what additional functions you turned on) are Open Purchase Orders by Job and Unbilled Costs by Job, both also found under Jobs, Time & Mileage, and Open Sales Orders by Customer (Reports > Sales).
Ruth Perryman, MBA, CMA, CFE, CFM
Certified Advanced QuickBooks ProAdvisor
Intuit Solutions Provider
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I am in the process of trying to set up federal grant tracking in QuickBooks. All of our money comes from one source but we have 8 programs that are funded. Those 8 programs could possible have to fund 10 contractors. We are wanting to track the grant as a whole as well as individually for ex. (We will have 1 grants and it may be award to 15 contractors) and we need to be able to track it both ways. When these grants are awarded, they will run into multiple years and it's no way to do that due to everything being closed to retained earning at the end of the fiscal year. We are only wanting to use QB's to track the grants. We have another software that we use for our accounting purposes. The QB's file will only be there so that we are able to track these grants without the use of huge cumbersome spreadsheets. Please advise on the best way to be able to track the grant as a whole but be able to track them by the individual contractor as well. I am new to the nonprofit sector and I'm just wanting to get this set up correctly from the beginning. Thanks for any suggestions.
