Recording In-Kind Donations Received

To record in-kind donations (non-cash contributions like goods, services, or equipment) in QuickBooks Online, you typically set up specific accounts and items to track the donation’s value and the corresponding expense.

Note: We recommend consulting with your accountant to ensure these transactions are recorded according to your organization’s specific accounting standards and reporting requirements.

Step 1: Create an income account for the donation

First, create an account to track the fair market value of the items or services received.

1. Select the Settings gear icon.
2. Select Chart of Accounts.
3. Select New.
4. Under Account Type, select Income.
5. Under Detail Type, select Non-Profit Income (or Contributed Income if available).
6. Name the account (for example, In-Kind Contributions).
7. Select Save and close.

Step 2: Create an expense account for the item received

Create an expense account to track where the donation would normally be categorized if you had paid for it (e.g., Office Supplies, Professional Fees).

1. Select the Settings gear icon.
2. Select Chart of Accounts.
3. Select New.
4. Under Account Type, select Expenses.
5. Under Detail Type, select the category that best fits the donation (e.g., Office Supplies or Professional Fees).
6. Name the account appropriately.
7. Select Save and close.

Step 3: Record the donation

You can record the in-kind donation using a journal entry or a deposit. A journal entry is often the most direct method for this purpose.

1. Select the + New button.
2. Select Journal entry.
3. Line 1 (Credit):
   • Account: Select the income account created in Step 1 (e.g., In-Kind Contributions).
   • Credits: Enter the fair market value of the donation.
   • Description: Enter a description (e.g., “In-kind donation of goods”).
4. Line 2 (Debit):
   • Account: Select the expense account created in Step 2 (e.g., Office Supplies).
   • Debits: Enter the same amount as the credit.
   • Description: Enter a description matching the credit line.
5. Select Save and close.

This records the value of the contribution as income and recognizes the expense simultaneously, keeping your books balanced.