Setting Up Your QuickBooks for Grant Tracking and Reporting

Grants are vital to any nonprofit organization’s operations. And while you may breathe a sigh of relief once you have gone through the difficult process of finding, applying for, and receiving a grant, your work isn’t done there!

Grant tracking is just as important for bookkeeping for nonprofits as the funds you receive. Thankfully, you can use QuickBooks Online bookkeeping services to track your nonprofit grants.

Whether you’re a new nonprofit on the rise or an established organization, Good Steward Financial Company can help!

We are a nonprofit bookkeeping service that offers a wide variety of 501c3 services, including full-service bookkeeping for nonprofits, fractional CFOs, annual audit assistance, payroll processing, and QuickBooks bookkeeping services.

Why Does Your Nonprofit Need to Track and Report Grants?

Accurate grant tracking ensures that you will be able to keep and use the funds you have been awarded–and that you won’t have any issues with auditing or getting other grants down the line.

Grant tracking records where every cent of the grant funds went. Although your grant tracking process begins with a budget, the actual way you use the money will almost certainly fluctuate as you accomplish your project.

Grant tracking is so important that, for many grants, it is a requirement to receive funds. However, even if your organization isn’t required, it is still best practice.

Grant tracking allows you to:

• Optimize grant fund allocation
• Ensure proper bookkeeping for your nonprofit
• Meet grantor requirements
• Develop a track record for using funds that future grantors can trust
• Build a reputation as a reliable nonprofit organization
• Create strong relationships with grantors
• Prepare an accurate grant report

That last point is especially important! After using your grant funds, you will have to create a grant report, and the information from grant tracking is key to creating your grant report.

A grant report should include:

• A summary of how you used grant funds, based on your grant tracking
• A description of your project’s goals and outcomes
• Strict adherence to the specific grant’s reporting requirements (which will be outlined in your award letter)
• An impact reports
• Sincere thanks to the grantor

Diligent grant tracking and recording create mutual trust between your organization and the grantor–making it easier for you to get more grants in the future!

How To Track Grants with QuickBooks Full-Service Bookkeeping

Thankfully, QuickBooks Online is well-equipped to help your nonprofit organization with grant tracking and reporting.

There are a few helpful tools within QuickBooks’ bookkeeping services that can assist with your grant tracking.

First, QuickBooks “classes” allows you to designate transactions to a specific group, or “class,” that tracks revenue and expenses for a program. You can also create sub-classes within other classes.

You may want to create a class for each specific grant or grantor. When you use the class feature, your income statement will be divided into separate columns for each class, and you can filter by the program.

However, many QuickBooks full-service bookkeeping experts recommend using your classes for other program activities, such as education. So, if you need the classes for something else, consider other options.

One such option is using QuickBooks’ “job” feature. You can create a “job” for each grant as a sub-customer to a customer (donor), allowing each transaction to be assigned to a grant. Then, you can generate a grant-specific report.

Finally, the Association of Nonprofit Accountants & Finance Professionals recommends using the “projects” features. Make each grant its own project, and then you will have access to time tracking and a useful status dashboard.

QuickBooks Full-Service Bookkeeping with Good Steward Financial

If you’re unsure which grant tracking method is the best for your organization, reach out to a nonprofit bookkeeping service like Good Steward Financial.

We are your bookkeeping and accounting experts, and we can help you take advantage of all of QuickBooks’ bookkeeping services to keep your nonprofit organization’s finances running smoothly.

As part of our QuickBooks Online bookkeeping services, we are currently offering a FREE QuickBooks review to optimize your software usage.

We also provide a variety of 501c3 services that can enhance your nonprofit’s impact, including:

• Fractional CFOs to guide your organization’s finances
• Payroll processing to keep payroll easy, secure, and compliant
• Cash flow management to make sure you always have a clear picture of your organization’s accounts

Contact us today to learn more about innovative bookkeeping for nonprofits and our free QuickBooks review!