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D
Donnybhoy
April 24, 2025
Question

Donations in kind

  • April 24, 2025
  • 1 reply
  • 0 views

We receive Gift cards fro local businesses rather than cash. When we record them as donations, quickbooks includes them on the deposit slip - problem is they do not get deposited to the bank. They are kept in our safe and then used to purchase supplies.

How do I recognise the donations and not have them show up on the deposit slip?

1 reply

J
JayneusCaesarR
April 24, 2025

Hello there, @Donnybhoy. To properly document donations or Gift Cards, you should start by setting up an account in your Chart of Accounts specifically for recording donations. Next, create an invoice and establish a product item labeled for donations. From here, you can issue a credit memo for the donation's value. Let me guide you on how:

 

To create an invoice:

 

  1. Go to the Customers menu and choose Create Invoices.
  2. From the Customer: Job drop-down, select a customer or customer job. If the customer or job is not on the list yet, you can select Add New.
  3. Add all the necessary information.
  4. Select Save & Close.

 

To create an account to use to record donations: 

 

  1. Go to the Lists menu and select Chart of Accounts.
  2. Click the Account drop-down arrow at the bottom of the window and click New.
  3. Set Expenses as the Account Type and click on Continue.
  4. Enter a Name for the account.
  5. Click Save & Close.

 

To create a product/service item for the donation: 

 

  1. Go to the Lists at the top menu bar and select Item List.
  2. Click the arrow beside the Item and choose New.
  3. Under the Type, select Inventory Part.
  4. Use the account you've created from the drop-down list in the Income account field.
  5. Add the needed details.
  6. Click OK.

 

To issue a credit memo for the value of the products you're donating: 
 

  1. Select Customers and then click on Create Credit Memos/Refunds.
  2. Enter the info for the credit memo or refund. 
  3. Click on Save & Close once you're done. 

 

On the other hand, I recommend consulting a qualified accountant for some guidance on how to enter this transaction. Your accountant's knowledge of best business practices would recommend which type of transaction to use and which account this affects.

 

Moreover, I added resources to guide you on how to create and adjust different reports, providing a comprehensive view of your business's financial health: Customize reports in QuickBooks Desktop.

 

Whenever you need further assistance recording donations in QuickBooks, the Community is always here to provide relevant instructions to address your concerns.

D
DonnybhoyAuthor
April 25, 2025

Not quite what I was asking ......

A store donates one of their gift cards to us (a food bank) - how do I record this because it does not get deposited to any bank account.

Secondly how do I record when we use this gift card to purchase goods from the donor's store ??

MariaSoledadG
MariaSoledadG
April 25, 2025

I can see how you want to accurately record gift cards in QuickBooks Desktop. I'm here to guide you through the process, Donny.

 

Although gift cards aren't deposited into any of your actual bank accounts, you may need to create and use  a deposit for the gift card to the Clearing account in order to accurately record gift cards after you receive them.

 

To achieve this, set up a clearing account or a dummy account to serve as a temporary holding account for the Gift Cards that you've received. 

 

  1. Go to the Lists menu and select Chart of Accounts.
  2. Click on the Account drop-down arrow at the bottom and choose New.
  3. Select Bank as the Account Type, which allows easier recording of outflow and inflow without affecting your actual cash balance, and click on Continue.
  4. Enter a Name for the account, like "Gift Card Clearing Account," to easily recognize the purpose.
  5. Click Save & Close.

 

Once done, deposit the Gift Card to the Clearing account after you receive it. Here's how:

 

  1. Go to the Banking menu, and select Make Deposits.
  2. In the Deposit To field, select the Gift Card Clearing account.
  3. Enter the necessary information in the Received From and Amount columns. 
  4. Click Save & Close.

 

When you use the gift cards to purchase goods, you can create a check. Here's how:

 

  1. Go to the Banking menu, and select Write checks.
  2. In the Bank Account field, select the Gift Card Clearing Account.
  3. Enter the necessary information needed, such as the Payee and Amount.
  4. Under the Expenses tab, select the correct expense account that you want to use and enter the amount.
  5. Click Save & Close.

 

To give you more information on how you can add accounts to your chart of accounts that fit your business, check out this article: Add, Edit, or Delete Accounts in QuickBooks Desktop.

 

Additionally, QuickBooks offers a wide variety of reports that enable you to track purchases, sales, and their impact on your overall balances. For guidance on how to tailor these reports to your specific needs, refer to the article: Customize Reports in QuickBooks Desktop.

 

Let me know if you have any other questions or concerns about gift cards or how it is recorded. I'm always right here to help.

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