If your nonprofit uses QuickBooks Online, you have many different options for organizing your financial data. In the past, we’ve discussed three ways to track income and expense transactions in QuickBooks Online – the chart of accounts, class codes and locations. Using those three areas together provides flexibility in tracking transactions for your organization’s reporting needs. However, even these tracking methods can still fall short at times. If you’re looking for more ways to categorize your income and expenses, QuickBooks has another option – project tracking.
In QuickBooks Online, a “project” helps you track the income and expenses for a particular project or program without needing to set up a new class code. The projects feature is currently available in QuickBooks Online Plus, Advanced, and Accountant. This is a setting that will need to be switched on if you want to utilize it. To turn on project tracking, log into your QBO account and click on the gear icon to access account settings. Under the “Advanced” tab, locate “Projects” and turn on “Use project financial tracking.”
Once this feature is enabled, you will see the new field displayed in your expense transaction entry screen:
For revenue items – such as sales receipts, invoices, or deposits – the project will be entered under the “customer” or “received from” field.
If you use project tracking, you will be able to view the income, expenses, and profitability of all your projects at a glance. You can use drop-down menus to filter your projects by status and customer. Or click on a project name to view more details about the individual transactions coded to the project, and to run project reports. Once a project is finished, you can mark it as complete by using the status drop-down menu. QuickBooks Online also allows users to enter budgets for each project and to view Budget Vs. Actual reports. That option would also allow you to view the project reports side-by-side for comparison.
Every nonprofit organization has different tracking needs for their finances. While project tracking may not work for everyone, it can be a valuable tool for keeping track of time-limited projects or programs – especially when you don’t necessarily need or want to set up a new class code. Since QBO now places usage limits on the number of classes and locations you can have, project tracking can help add another layer of complexity without bumping your organization into a higher price tier. Don’t be afraid to experiment with different combinations of accounts, classes, locations, and project tracking until you find a unique solution that works for your nonprofit.