When I follow guidance on set up and record of in-kind donations, it hits my expenditures - Purchase account, and as it is a donation, it is a free for us.Please help?

Hi olha-helpushelp-,

It's a pleasure to see you in Community.  Welcome!  It's important that you're able to record in-kind donations in QuickBooks Online with confidence.  I'd be happy to assist!

Initially, you'll want to set up an income and clearing account for the charitable contributions.  Once you've completed that, you'll need to create a product or service item so you can begin to record the in-kind donations.  Let's get started!

Step 1: Make sure you don't already have an in-kind donation account;

1. Go to Settings ⚙ and select Chart of accounts
2. In the Filter by name or number field, search for "In-kind donations"
3. If you see an account named "In-kind donations”, there's no need to create an other one. You can skip to Step 3.

Step 2:  Create an in-kind donations account

1. Go to Settings ⚙ and select Chart of accounts
2. Click on New
3. Select Income from the Account Type ▼ dropdown menu
4. From the Detail Type ▼ dropdown menu, select Non-Profit Income
5. In the Name field, enter "In-kind donations"
6. Select Save and Close.

Step 3: Create a clearing account:

1. Open Settings ⚙ and then Chart of accounts
2. Select New
3. Select Bank from the Account Type ▼ dropdown menu
4. Use the Detail Type ▼ dropdown menu and select Chequing
5. Enter a name (for example, In-Kind Clearing) for the account
6. Select Save and Close.

Step 4:  Create a product or service item for the donations

1. Open Settings ⚙ and select Products and services
2. Click on New and then Service
3. In the Product/Service information panel, add a Name and Description that will be visible on your sales or donation receipts
4. From the Income account ▼ dropdown menu, select the In-kind donations income account you created
5. Under Purchasing information, select the I purchase this product/service from a supplier checkbox
6. Click on Save and close.

You're all set and ready to begin recording in-kind donations by entering a Sales receipt or a Bill. Here's a helpful guide for your reference.

Should you require additional assistance, please feel free to contact us.  It would be our pleasure to work with you directly and help you accomplish your QuickBooks goals as soon as possible.

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