Online giving makes it easier than ever for your donors to give, but it’s not without some challenges. Accepting donations online requires your nonprofit to constantly reconcile the bank account to the Contributions Management module.
Waiting until the end of the month to do this is a big mistake! The best thing to do is to reconcile at least on a weekly basis. (We recommend daily if your nonprofit receives more than twenty cash donations a day).
The simplest way to account for the contributions received and balance with your checking account is to enter the contributions the same way they are reflected in your banking records. This keeps the audit trail clean!
Check out the spreadsheet below. In this example, the bookkeeper signed into the nonprofit’s banking website and found that $12,017.34 was electronically deposited on June 30th. She then used her online giving statements to reconcile the banking records. The bookkeeper is using the bank’s EFT number as the memo. (Remember good internal controls will not allow this same person to write checks).
Here is an explanation of the spreadsheet:
- A = The total donation received (Ania writes a check for $50). This amount should match what is reported on the Contribution Statements
- B = Fees charged by credit card provider, online giving service, etc. that are related to transaction
- C= A-B Cash less fees (this is the amount of cash your nonprofit ends up with)
- D = This is the journal entry if you are not using a *Contribution Management app that does it for you.
*In Aplos Accounting Software’s Contribution Management app you would enter the gross contribution. Then, do a Journal Entry for the banking fees. This would be a debit to fees and a credit to cash.
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