Deposit through customer

[Mike or Penny Novack]

On 8/30/2016 8:21 AM, Jacqueline Greenleaf wrote:
> Making an invoice for each donation is how I did it when working for a nonprofit. We used QuickBooks there, as do many nonprofits.
>
> When using bookkeeping software for a nonprofit, just remember that for bookkeeping purposes, anyone from whom you receive money (or unkind donations) is a customer, and anyone who receives money (or unkind services) from you is a vendor. The underlying algorithms don’t care whether you call a person a customer or a donor.
Agreed, that is what most do. Especially when "membership" organizations 
and members want statements. Usually they want unified statements 
showing "dues" and extra donations. But the thing to remember is that in 
spite of how your accounting package will consider it (and QuickBooks 
has the same problem) when using the invoice feature will treat "due" 
amounts as receivables. Except .........

a) Membership dues are NOT actually "receivable". With voluntary 
organizations, allowed to quit at any time regardless of organization 
rules << you might have to pay "back dues" to rejoin, but that is 
another matter >> In other words, failure to have given notice of 
dropping out, failure to have received permission to drop out, etc. does 
NOT make "owed dues" collectable in law.

b) On the other hand, pledges ARE receivables in spite of the fact that 
non-profits are rarely in a position to try to collect unfulfilled 
pledges. This, BTW, is why many such organizations push for "pledged 
monthly donations" etc. since they are allowed to "book" that as 
income.  Another complication with pledges (that available packages do a 
poor job with) is that while a pledge is receivable, it is receivable 
only by the terms of the pledge. In other words, if a donor pledged "one 
thousand a year for the next five years" that would NOT be $5000 
receivable NOW.

We should not fault gnucash. Packages like QuickBooks have the same 
problem. And back to the suggestion that "donors/members" are customers, 
yes, that is what you have to do but the organization might also have 
REAL customers<< say the church also rents out its social hall for 
events >> We just have to realize that nobody is (yet) making a package 
that has features to handle the peculiarities of accounting for a 
non-profit.

Michael D Novack