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Accounting software recommendations for homeschool groups

I am thinking we will need to get QuickBooks to manage our finances.  Do we you recommend the nonprofit version?  I have not looked much into this yet.  Any input is greatly appreciated.

Nancy in CA

 

Nancy,

I don’t think you need the Nonprofit version of QuickBooks. Usually the Pro version is sufficient. The Nonprofit edition is helpful if you receive a grant and need to track grant expenses.

I usually recommend online accounting software instead of purchasing a desktop version. Online accounting means that several people can access your accounting records from their home computers. That’s very important. It also downloads your bank transactions automatically!

I recommend:

QuickBooks Online. You may be eligible for a free version of QuickBooks Online. I wrote about it here: Use QuickBooks Online for free

 Wave Accounting. I set up a small nonprofit on Wave recently. It’s working for them and it’s free!

Aplos Software which is popular with nonprofits and churches.

 

I discuss software options in a chapter in Money Management in a Homeschool Organization,
Cover Money Mgmt HS Org

Carol Topp, CPA

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How Should We Handle Reimbursements in our Homeschool Group?

It’s that time of year when your homeschool group is trying to wrap up its finances for the year. In this podcast episode Carol  Topp, the Homeschool CPA, explains how to give reimbursements to your members properly, so they are not considered taxable income.

Listen to the podcast

Money Management for Homeschool Organizations

Does your homeschool group manage their money well? Do you have a budget and know where the money is spent? Do you know how to prevent fraud? This 115 page book will help you to open a checking account, establish a budget, prevent mistakes and fraud, use software to keep the books, prepare a financial statement and hire workers. Sample forms and examples of financial statements in clear English are provided.

Click Here to request more information!

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Can my homeschool group collect money now that’s for next year?

 

Many homeschool groups collect deposits in the spring for next fall’s programs. This helps with determining how many families will be returning. But how should these early deposits be recorded in a homeschool group’s bookkeeping? Carol Topp, CPA the HomeschoolCPA offers some ideas.

 

Listen to the podcast

In the podcast Carol mentioned a handout that explains how to record early deposits in accounting software like QuickBooks.

Here it is: Deferred Revenue in QuickBoooks (pdf)

Do you have more questions about managing the money in your homeschool organization?

MONEY MANAGEMENT FOR HOMESCHOOL ORGANIZATIONS: A GUIDE FOR TREASURERS

  • Does your homeschool group manage their money well?
  • Do you have a budget and know where the money is spent?
  • Do you know how to prevent fraud?

This 115 page book will help you to open a checking account, establish a budget, prevent mistakes and fraud, use software to keep the books, prepare a financial statement and hire workers. Sample forms and examples of financial statements in clear English are provided.

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What Homeschool Leaders Don’t Know About Fundraisers

What Homeschool Leaders Don’t Know About Fundraisers

Carol Topp, CPA, the HomeschoolCPA will share tips on important issues that homeschool leaders may not know about. This episode will focus on helping homeschool leaders know the tax rules about fundraisers.

Listen to the podcast

 

MONEY MANAGEMENT FOR HOMESCHOOL ORGANIZATIONS:  A GUIDE FOR TREASURERS 

  • Does your homeschool group manage their money well?
  • Do you have a budget and know where the money is spent?
  • Do you know how to prevent fraud?

This 115 page book will help you to open a checking account, establish a budget, prevent mistakes and fraud, use software to keep the books, prepare a financial statement and hire workers. Sample forms and examples of financial statements in clear English are provided.

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Overwhelmed by QuickBooks? Help is available.

QuickBooks is a great accounting software package, but it can be overwhelming. I have some suggestions to help you learn QuickBooks or get the help you need to use it correctly.

TechSoup (the program that offers QuickBooks online for free to nonprofit organizations) offers videos:

QuickBooks for New Nonprofit Users

QuickBooks for Existing Nonprofit Users a more advanced video

Techsoup also has some blog posts on QuickBooks.

Running QuickBooks in Nonprofits by Kathy Ivens is a great book. My go-to-referral for all things QuickBooks.


The resources listed above are helpful, but they are not specific to homeschool organizations.

I can recommend some homeschool moms and dads with bookkeeping experience who can help you. They know QuickBooks and have experience with homeschool organizations. These wonderful bookkeepers can help you get setup (that’s the hardest part), do a monthly or quarterly check up to see if you’re using the software correctly, or fix your QuickBooks file if you’ve blundered it up.

Email me to get a recommendation of a homeschool-friendly QuickBooks expert.


Carol Topp, CPA

HomeschoolCPA.com

 

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Accepting in-kind donations of equipment or services

Carol,

My homeschool group (a 501c3 nonprofit) was donated $500 in science equipment. How to I record a gift like this in my record keeping? We use QuickBooks.

 

How wonderful to receive such a generous donation. As a 501(c)(3) tax exempt organization the donation is a tax deductible contribution for your donor.

Thank the donor

First, be sure to thank the donor with a nice letter. State what the donation was (science equipment) but not the dollar amount. Only state the dollar amount when the gift is cash.

And be sure to include this note: “No goods or services were provided in exchange for this donation.”

Understand in-kind donations

A contribution that is paid or given in goods, commodities, or services instead of cash is called an “In-kind” contribution.

Free Church Accounting offers some great information on accepting and recording in-kind donations for small nonprofits like homeschool groups.

There are typically three categories of in-kind donations. They are

  • contributions of tangible and intangible goods
  • use of property
  • donations of services

Tangible gifts in-kind (physical goods that can be touched or held) include: furniture, equipment, food, clothing, supplies.

Example: The donation of science equipment is a tangible in-kind contribution.

Intangible gifts in-kind (goods have value but do not have a physical presence) include: trademarks, copyrights, patents, royalties, advertising.

Example: If a member of your homeschool group lets you print copies of her book or curriculum at no cost she has granted you an in-kind contribution of her copyright.

Use of property include free leased space and discounted rent.

Example: A church lets your homeschool co-op use their building for free.

Professional services given as gifts in-kind include services of accountants and bookkeepers, lawyers, plumbers or electricians, computer programmer, designers, technical support, etc.

Example: One of your members is an attorney and created bylaws for your organization.

Recording donations of in-kind contributions

Some small homeschool organizations don’t record in-kind contributions at all because they do not have to report financial statement to the IRS (they file the Form 990-N) or don’t use accounting software.

But if you would like to record your in-kind contributions in your accounting software here are a few examples from Free Church Accounting

An accountant donates 5 hours a month to do some accounting work that your organization would have had to pay another accountant to do. She regularly charges $100 per hour to do a similar service. To record this gift in-kind you would:

  • Debit Professional Service In-Kind $500
  • Credit In-Kind Contributions $500

Important reminder: Thank your donor for their services, but do not give them a tax deductible receipt for the value of their services. Donors cannot take a deduction for the time that they donated. Only donations of cash, tangible and intangible goods are tax deductible, not the value of services.


A business donates a portable building valued at $12,000. Assuming that your organization has a policy to capitalize assets of this value (meaning you depreciate the value over several years), you would record this gift in-kind like this:

  • Debit the fixed asset account (Portable Building In-Kind) $12,000
  • Credit the In-Kind Contributions $12,000

A person donates an computer valued at $400. Assuming that your organization has a policy to expense assets of this value (meaning you do not depreciate it; you deduct the full amount as an expense in one year), you would:

  • Debit the Equipment In-Kind (expense account) $400
  • Credit the In-Kind Contributions $400

 

Have more questions about properly recording your income, expenses and contributions? My book Money Management in a Homeschool Organization can help.

Or contact me to get help with your accounting set up and transactions. I can refer you to a cadre of homeschool parents with experience in bookkeeping.

Carol Topp, CPA

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Use Quickbooks online for free

I encourage my nonprofit clients to use QuickBooks online (or other online accounting software) and now qualified nonprofits can use QuickBooks online for FREE!

TechSoup, a charity that arranges free or discounted software for nonprofit organizations, offers

One year subscription to Quickbooks online for up to 5 users.

Do this NOW!

If you manage bring in than $20,000 in revenues per year I recommend you start using accounting software. If you have more than $50,000 in revenues in a year I HIGHLY recommend you start using accounting software and Quickbooks online is an excellent choice.

Make it a New Years resolution for 2017 to start using accounting software and be a better money manager of your homeschool organizations finances.

Lots of homeschool parents are depending on you to run your organization successfully.

The advantages are huge:

  • Multi-user so you don’t overburden one person with all the record keeping. Even a bookkeeper or CPA (like me) can log in remotely (with your permission).
  • Online backup so nothing is lost.
  • Email invoices so you can easily track who still owes you.
  • Create reports that show how much money has been spent.

Help is available

Are you afraid of accounting software? It can be complicated, but Tech soup offers some helpful videos.

Or if you prefer more personal help I can recommend some homeschool moms and dads with accounting and bookkeeping experience who can help you. They know QuickBooks and have experience with homeschool organizations. These wonderful bookkeepers can help you get setup (that’s the hardest part), do a monthly or quarterly check up to see if you’re using the software correctly, and answer questions you have.

Email me to get a recommendation of a homeschool-friendly QuickBooks expert.


There are a few catches to TechSoup’s free program:

  • You need to be a qualified nonprofit organization, that means nonprofits with 501(c)(3) tax exempt status.
  • You need to re-subscribe each year, but the renewal fee is free.

What have you got to lose?

If you don’t take advantage of this offer please tell me why in the comments or email me. I want to understand your concerns or obstacles.

Carol Topp, CPA

 

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What financial reports do we need to generate monthly?

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Hi Carol,
We have purchased QuickBooks and our treasurer is working hard to learn  the software. What financial reports do we need to generate monthly?  We need these reports to be a simple process.The Balance Sheet and Profit and Loss statements in QuickBooks looks overwhelming.

Hilary S.

Hilary,

QuickBooks  can be as simple or as complicated as it needs to be. The reports your treasurer generates is based on what the board wants to see.

When I was treasurer, I gave my board a Profit and Loss statement.  They really liked to see the budget in one column and actual income and expenses in another column.  Then they could see how we were doing compared to our budget. This report can be generated in QuickBooks as a Budget Report.

I also created a mini balance sheet.  I took the amount in the checking account and then listed payments to be made.  This gave the board an idea of how much cash we had on hand and where it was planned to go.

If the stCover Money Mgmt HS Orgatements in QuickBooks are too overwhelming, then perhaps you’re not using QuickBooks correctly.  I frequently see QuickBooks users make their Chart of Accounts too long.  Then the Profit and Loss becomes 2-3 pages long.  I recommend that a Profit and Loss be kept to one page or less.

My book Money Management in a Homeschool Organization could be a big help to your treasurer. It has tips, samples and lots of examples.

 

If your treasurer would like my help in setting up QuickBooks, I’d be happy to help.  She can e-mail me with what needs to be done and I’ll give you an estimated cost.

I hope that helps.  I wish you the best of success!

Carol Topp, CPA


Want more tips on managing money in your homeschool organization? Sign up for my email list and I’ll send you my list of “best practices.”

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Parents paying homeschool teachers is getting cumbersome

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Hello Carol,

I am the Executive Director of a 501(c)3 non-profit homeschool co-op. We have always had all parents pay teachers directly for classes. Of course the number of checks written by members each semester,and unraveling the missing/lost checks each semester along with the myriad of other payment mysteries has prompted to us to wonder if we can have all parents submit the teacher payments to our group, then we cut a check to each teacher.

We would essentially gather all the money and then direct it to each teacher. One check from each parent for all their children’s classes, and one check to each teacher for all the classes they are teaching.

Can we do this?

Holly

Holly,

Thank you for contacting me.

Yes, you can collect all the payments from parents and then pay the teachers, but there are some things to warn you about:

1. Managing more money means you need good accounting software (links to some of my blog posts with software recommendations), one that can invoice parents and track who has paid and who still owes.

2. Additionally, since you have a lot more income, you may have crossed an IRS threshold and now need to be filing the annual Form 990 or 990-EZ (YouTube video explaining which form you need to file).

3. Worker classification. You need to determine if the teachers are employees or  Independent Contractors (opens a blog post series on worker status). This is not an easy determination to make. You need to consider many factors.

I’m in the process of updating my book, Paying Workers in a Homeschool Organization. I hope to have it ready by November 1, 2016.

I’ll also be offering a consultation service to help homeschool groups make a decision about employee or independent contractor status.

Sign up for my email list to be notified when the book and worker determination consultations will be available.

Carol Topp, CPA

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Are discounts to homeschool board members taxable compensation?

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My homeschool group gives a fee waiver of our dues to our board officers. Would that discount be reported to our officers as taxable compensation?

Melissa

 

Melissa,

This is an excellent question because I’ve encouraged homeschool groups to offer discounts on membership fees to their volunteers or board members as a way to show appreciation.

The IRS defines compensation as:

compensation includes salary or wages, deferred compensation, retirement benefits…, fringe benefits (personal vehicle, meals, lodging, personal and family educational benefits, low interest loans, payment of personal travel, entertainment, or other expenses, athletic or country club membership, and personal use of your property), and bonuses.[i]  (emphasis added)

[i] Instructions for Form 1023 https://www.irs.gov/instructions/i1023/ch02.html#d0e1909

 So free or reduced fees that are educational benefits is taxable compensation to your board members.

So here’s my advice:

  • Keep your fee waivers to board members small and insignificant. The IRS does state that insignificant benefits to volunteers is not taxable income.
  • Consider showing appreciation with noncash gifts such as food, chocolate, or flowers. Buy resources to make their jobs easier including helpful books, hiring a payroll company (your treasurer will love it!), accounting software, etc.
  • Have the amount of fee waivers decided by a separate, independent committee or put it to the vote of the full membership. The board should not vote themselves a fee waiver. Its a conflict of interest.
  • Add a provision to your bylaws allowing a small fee waiver (or tuition discount) to board members or other volunteers. Consider granting a percentage discount instead of a dollar amount such as 20% off the fee.

 


Have more questions about compensation to board members in your homeschool organization?

payingworkerscoveroutlined

Paying Workers in a Homeschool Organization-2nd edition

$9.95 paperback
130 pages
Copyright 2017
ISBN 978-0-9909579-3-5

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Carol Topp, CPA

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