How best to setup for a UK charity

When receiving donations and grants, you need to categorise them as income properly. A dedicated account helps you track these funds separately from regular business revenue.

Here's how:

1. Open All apps, choose Accounting, and select Chart of accounts.
2. Click New.
3. Enter an Account name (such as "Donations).
4. Select Income from the Account type dropdown menu.
5. Select Non-Profit Income from the Detail type dropdown menu.
6. Click Save.

Next, create a service item linked to that account. This item allows you to enter donations on sales receipts and connect them to specific donors. For detailed guidance, see this article: Track donations and charitable contributions in QuickBooks.

To distinguish between restricted and unrestricted funds, use class tracking, which is available on QuickBooks Online Plus and Advanced plans.

For donated goods or services, you'll need an in-kind donations income and a clearing account. We recommend consulting your accountant to ensure your books are accurate and tailored to your organisation's needs.

If you have any questions, just let us know. We're here to help.