Upgrading Your Nonprofit’s Accounting: The Real Path from QuickBooks Desktop to Online

Many nonprofits find themselves stuck between growing demands and outdated systems. If your organization is nearing the $1M mark, juggling too many roles, and still relying on QuickBooks Desktop—or a part-time bookkeeper—this episode is for you.

Amity breaks down the exact process she uses when nonprofits call saying, “We need a tech upgrade… help!” From converting a Desktop file to QuickBooks Online, to connecting bank feeds, cleaning your chart of accounts, automating reports, streamlining payroll, and integrating development software—she walks you through the system changes that save organizations 40–60% in accounting time and cost.

If you're overwhelmed, understaffed, and ready to modernize, this episode will show you what’s possible—and why the upgrade is worth it.

Transcript

SPEAKER_00 0:03

Welcome to Navigating Nonprofits with Lightboat Accounting. My name is Amity, and I'll be your captain today as we discuss hot topics around accounting for nonprofits. Lightboat Accounting is an accounting firm that works exclusively with helping nonprofits stay afloat. We cover everything from accounting to tech stacks, to strategic planning, 990s, grants, board development, and staff training. When I speak at conferences or board meetings, folks have always suggested to me that I needed my own podcast to tell all my stories and share my experience. So I'm excited to dive right in and to get to some of my favorite topics and share some special guests with you. Let me know if this sounds familiar. Your organization is around the $1 million mark or heading that way. You have enough work for an HR director, but you don't have one. You have enough work for a development or marketing communications team, but you don't have one. You may be on QuickBooks Desktop and have a traditional bookkeeper who is doing things manually or maybe comes in once or twice a month. Your reporting isn't what you need, and there are things that are off in your desktop file for your financials, which I call QuickBooks Desktop Ghosts. You're frustrated because there's simply too many hats, old technology, and you're not getting what you need. I receive this call at least once a week for years. And I just want people to know that it's totally normal. And simply it's time for a technology upgrade. Now it may mean that you have to change some of your systems, and unfortunately, you may lose your traditional bookkeeper, mainly because a lot of the desktop bookkeepers are also retiring at the same time that desktop is retiring or no longer being supported. And in their defense, QuickBooks Online is a totally different software than QuickBooks Desktop. And it does take a little bit of a learning curve. And with the retiring of traditional bookkeepers, you may need a techie accountant instead. And so I just want to go through some of the steps that I traditionally do when a client calls me and says, Hey, I'm really frustrated. We need a technology upgrade. We need to upgrade from desktop to online and talk you through some of the neat things and time savings and efficiencies that can be made with the system change. So here's some of the steps I've done a hundred times. We probably do at least one conversion a week. And um, so we've kind of got a system down. So hopefully this is helpful information for you if you're trying to make that decision. So the first step is that you need to do the conversion from desktop to QuickBooks Online. And if you have access to TechSoup, the website, it's a great resource for nonprofits to get discounts on a lot of software and tech. And you can get QuickBooks Online right now on there for $80 a year versus paying you know $80 to $125 a month on the QuickBooks Online website. So it's definitely a good deal. You also get a higher, a higher tier platform. So if you can get the TechSoup edition, you order it on the TechSoup website, they send you a link. And what we'll do is we'll take your QuickBooks file. I usually do them on the weekends. I'll start it on Friday so it's ready for Monday. And I'll upload it into the QuickBooks Online software. And pretty much QuickBooks does the rest. You do lose uh the bank reconciliations and budgets, but those can be easily redone and entered in. Once the conversion is complete, I double check the reports, make sure everything came over correctly, and then I start connecting all of the bank feeds, which is where you get a lot of the efficiencies. When you connect your bank accounts and credit cards and loans to QuickBooks Online, it automatically brings in the transactions for coding, and that alone saves a lot of manual input. It also reduces the number of errors from human error from inputting transactions. And then I'll make sure that everything's running smoothly for the current transactions, and then I'll go back and review the chart of accounts to make sure that we clean up all of the um items that are potentially sticking out, or maybe you have the paperclip expense separate from the pen expense, and it should all be office supplies. So we work on streamlining the chart of accounts and activating anything old, and then we'll go through and update the classes and the projects and the categories in QuickBooks based on what the organization tells us that will be helpful for them to tell their story. Plus, also have the functional expense accounting that is required for nonprofits. Nonprofits need to break out their expenses between program expenses, management expenses, and fundraising expenses at a bare minimum. From there, you can choose to have different programs and different tracking models. And projects are great for tracking funding sources or one-time non-permanent programming items. It's also great for grants and donors as well. Then normally what I usually do is I go through if they want payroll to make sure that we digitize timesheets because I can't tell you how many organizations still do timesheets on paper. And then the bookkeeper has to take those timesheets and enter them into a payroll system. And a lot of the time those timesheets don't have uh approvals or signatures on them, which is generally required by most states' departments of labor. And so just a general payroll upgrade to digital timesheets is a huge time savings, too. The other neat thing is the fact that you can track your time by funding sources or by grants. So that's a huge upgrade for a lot of organizations that if someone enters in 40 hours of their time and they allocate it to different funding sources or programs, it'll automatically code that into QuickBooks. Whereas in desktop, you had to manually create an Excel spreadsheet to allocate time and go through all of the processes of entering a journal entry. And then the next step is my fun stuff is that once the budget is entered, you can set it up to be uh automatically running and emailing staff their budgets versus actual reports on a regular basis in whatever format, monthly, quarterly, that you'd like. And no one has to ask how they're doing. And then I'll also automate the board report so that it's consistent and that the board's getting the same packet every single month in the same format. And all of these are templates that can be saved to use and save a ton of time. And I do find with folks that convert from desktop to online that the savings is usually 40 to 60 percent of what they were spending on accounting beforehand. You can also get into fun things like uh your development software. A lot of the development programs like Little Green Light, Neon, uh a bunch of them all connect and can be mapped into QuickBooks so that one person can enter the transactions and deposits into the development software and they carry over into the QuickBooks software. And that saves one person entering into the development software and then another person entering it into the QuickBooks software and having discrepancies too. So there's a lot of really cool techie nerdy things out there for nonprofits these days that can save organizations a lot of time, and that money can be put back into the mission versus paying for administrative costs. So I do hope folks consider the upgrade to online if you haven't yet. The other challenges with desktop is that there are vulnerabilities as the software kind of ages out and goes out of support, especially the older versions. Um, also with online, you can also do 1099 filings and a bunch of other things that maybe in desktop you were using, but since then it's been broken because the edition that you're using or the year that you bought it no longer supports future years. But that's kind of how we work through conversions is that we look at it and can and try to figure out as many options as possible to automate and streamline the actual transactionals. And then that way, more time could be spent on the analysis and the technology in making smarter decisions with less cost for each organization.