Skip to main content
S
snowleopard25
September 27, 2021
Question

Charity Donations From Your Business?

  • September 27, 2021
  • 1 reply
  • 0 views

Hi,

 

I donate 10% of profits per sale (not revenue, but gross profits and not net profit) to an Australian based registered charity.

 

I make these payments using my business bank debit card (not a credit card) paying the charity directly via their website so the transaction show up in my business bank transactions.

 

How do I categorize these payments and what do I set it up as in Chart Of Accounts?

 

------

 

Also, I have fallen behind this month in donations - how do I make sure I'm paying the correct 10% gross profits amount and also making sure I keep on top of what is owed to the charity at the end of each month? 

 

Should I just do all my profit and loss statements at the start of each month and then that month pay 10% of whatever the gross profit was for the previous month? What if I pay more or less to the charity that month?

 

I'm just not sure how to keep on top of what I owe the charity and how to make sure it is accurately tracked? Would I do it as a bill on an accrual basis?

 

Thanks

 

1 reply

I
IntuitSheila
September 27, 2021

Hi there snowleopard25,

 

You can create an expense to record the donation payment you've made. Make sure to create an expense account in the Chart of accounts to allocate those payments.. Here's how:

 

  1. Click on  the Accounting tab.
  2. Click on the Chart of accounts.
  3. Click New.
  4. Under Account detail, choose Expense. And under Detail type, choose the nearest account that fits the donation/payment.
  5. Under Name you can enter a specif name for the donation payment.
  6. Click on Save.

Then, create an Expense to track those payments through + New button, and under Category detail choose the expense account you've created.  The expense transaction will then be reported in your Profit and Loss report.

 

For the amount you've paid behind, you can record it in a lumpsum amount as an expense, and still use the same expense account created to track the donation payments. You can then run a report like Transaction list by supplier for you to check the amounts paid.

 

We'd recommend checking this with your accountant too as they're the best one to consult when it comes to tax advise in tracking the payments.

 

You may want to check this article on how to add a new account in Chart of accounts and how to run a report in QuickBooks Online:

 

Hope this helps and please let us know if you have any questions. Have a nice day!

Terms & ConditionsAccessibility statement