wave for non profits

robertrrobertr Member Posts: 2

Has anyone used Wave for a non profit entity?

Comments

  • JJTCJJTC Member Posts: 37
    I would think you use it the same way. I have a non profit client and I input their transactions and reconcile their accounts the same way I do a for profit client. This helps them when they have to file their taxes already have their main statements prepared.
  • CharlotteCharlotte Member Posts: 695 admin

    Thanks @JJTC ! Yes, there is not a specific nonprofit setup for Wave, but many such entities use Wave. @robertr if you could give us some insight into what must-haves you need in financial software, we'd be able to advise.

  • ScoutCPAScoutCPA Member Posts: 2

    Hi @Charlotte , can I follow-up on this post? For reference, I'm the treasurer for a cub scout pack, and also do a little non-profit accounting on the side.

    It seems that all transactions downloaded from a bank can only be categorized as Income or Expenses. It would be nice to have the flexibility to point activity to other Balance Sheet accounts. For example, if we are going to a scout camp, we could create an invoice to collect the fees from each participant, but I'd like to point that to a payable account, and not an income account. Similarly, when the camp fees get paid to camp, that is not an expense, but could reduce the liability. Then, all this pass-through activity can by-pass the Income Statement.

    I think to do this, you would just need to make is so the Invoice Item is not limited to income accounts. Similarly, payments would not necessarily be expenses, but would need to be able to point to other balance sheet accounts as well.

    edited July 1, 2019
  • BarsinABarsinA Administrator Posts: 260 admin

    Hey @ScoutCPA

    You can only set your invoices to be an accounts receivable in our system. However if you wanted to show a movement of funds you would do this using a journal transaction. If you consider that an invoice that is paid will only land in your income account, so to show it go anywhere else would not allow you to reconcile it accordingly. Therefore you'll want to simply create a journal transaction to show the funds moving from one account to another.

    When the transaction shows up on your transactions page, you can split the deposit to multiple income accounts, or fees that may have been taken off (which is technically considered an expense) however you cannot select any old expense account. The reason for this is because if you ever moved money to an expense, your bank would show this movement of money, unless you can give me an example of a transaction that isn't cash based where the funds would immediately go to an expense without the business owner manually making an expense payment.

    Otherwise I'd recommend either categorizing any transfer that is made via the bank as the expense you wish, or creating a journal transaction.

  • ScoutCPAScoutCPA Member Posts: 2

    Hi @Barsin thanks for the reply.
    I'm an accountant by training and practice, but I'm trying to set this up for a non-accountant treasurer to take over, and have it be simple and intuitive. I know from using Quickbooks that Items can be set up to point to any account, so the end bookkeeper doesn't really need to know what's going on in the background. I had considered using journal entries, but I'm not sure a non-accountant could do that on their own, and it would require two transactions to be entered for every invoice, of which there would be many.
    Reqarding expenses, I think the question is better posed as: "whose expense?" As a cub scout pack, there are some expenses we incur on behalf of our members, which are covered by dues, and it is all fine to include that in the income and expenses of the organization. But some optional activity we simply pay and then get reimbursed from the members. While it is relevant to account for those in receivables and payables, I think it arguably inflates our income and expenses, because the expenses are not commensurate with our dues. I suppose I could do separate income and expense categories for reimbursable items, but I thought it would be cleaner to keep those off the income statement altogether, by pointing invoices and bills to balance sheet accounts, like Quickbooks would allow.

  • MyronMyron Administrator Posts: 143 admin

    Hi @ScoutCPA , thank you for the response! Welcome to the Wave Community!

    One way to claim Reimbursable expenses incurred on behalf of your member is to include these expenses on the invoice when you bill your client.

    To record a reimbursable expense in Wave:

    1. Create an account for your reimbursements by going to Accounting > Chart of Accounts > Add a New Account (the blue button in the top right hand corner).

    2. In the Add New Account popup window, set the Account Type to 'Other Income' and the Account Name to 'Reimbursed Expense'. Save.

    3. When creating the invoice, the reimbursable expense you are recording will be a product line item with the Income Account set to Reimbursable Expense. To do this, when adding the reimbursable expense line, click "Edit Income Account", and select the "Reimbursable Expenses" account created in Step 2.

    4. Finish your invoice by adding any other products, your customer’s details, and any additional information you need to include.

    To record the initial expense you are being reimbursed for:

    1. Navigate to Accounting > Transactions. Select Add Expense. In the new window, enter the description, account, amount, the category (Refund for Income > Reimbursed Expenses).

    Now if you go to Reports > Account Transactions report, select the Reimbursed Expense account and select the Reimbursable Expenses account in the account drop down, You should see 0.00 for Reimbursable Expenses. This is because the income from the invoice you created and the expense entered on the Transactions page balance each other.

    This Help Centre article explains these steps as well: https://support.waveapps.com/hc/en-us/articles/115000588103-Claim-reimbursable-expenses-on-an-invoice

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