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"Begin with the end in mind" when implementing a new accounting system. "Begin with the end in mind" is based on the principle that all things are created twice. There's a mental or first creation, and a physical or second creation to all things. This concept is explained in The Seven Habits of Highly Effective People, the popular book by Stephen R. Covey.
The very first step in installing and implementing QuickBooks for your nonprofit organization has nothing to do with software or computers and everything to do with communication and understanding - and the good news is "communication and understanding" are normally among a nonprofit's strengths. Working with nonprofits for over 25 years has made it very clear (to me at least) that the "right brain" is dominant in most nonprofit organizations.
So, please, before you go and install a left-brained accounting tool into a right-brained environment - step away from your computer/server, put the QuickBooks disc back into the box, take a deep breath, and use your imagination to go to a vantage point where you can see the end goal that Covey speaks about so eloquently. Close your eyes and imagine that promised land where you can produce reports by grant or program or by the combined entity as a whole. Where you can satisfy the reporting needs of grantors, program managers, the board, your auditors, yourself.
Now that you have stepped back and are in that clarity-zone, setup a QuickBooks implementation and planning meeting. Invite ALL of the following (I know that this may sound like the tea party in Alice in Wonderland but just trust me on this one):
The main goal (but not the only goal) of the implementation and planning meeting is to best identify how information entered into the system should be grouped and presented for the purpose of providing useful reports to all of the readers and those who use financial information. The readers of these reports may include government and private funding sources, internal managers, data entry staff, board members, auditors, and others, and each may have a different focus on your organization. Once you have a vision and plan of how the reporting should come out of the system you can work backwards to determine the best structure and setup to use in QuickBooks.
To prepare for the implementation meeting, create a "QuickBooks Implementation Questionnaire" (since nonprofits can never get enough acronyms, we'll call it the "QIQ"). The QIQ will act as the centerpiece for the meeting. You will send this questionnaire out to all the participants prior to the meeting and have them complete it. At a minimum, the following should be included in the questionnaire:
I have developed and use a questionnaire in my practice when I assist clients in setting up QuickBooks and you are welcome to use it for your organization if it would be helpful: see http://mac-cpa.biz/resources-for-nonprofits/ or www.nonprofit-connect.com. The end result of this meeting should be a written plan that, at a minimum, defines your reporting requirements, chart of accounts, programs, and funding sources. This will be the raw material you will use to setup QuickBooks (there will be a future post in this series on how to setup programs and funding sources in QuickBooks, so stay tuned).
There is another equally important by-product. This exercise will promote team building and allow stake holders to walk a mile in another's shoes. People will come to see what a challenge it is to be a bookkeeper or accountant in a nonprofit and the accounting system will cease being called your system and start being called our system. Because good or bad, all the stakeholders had a hand in building it.
Watch for the next posts in this series, to learn more about configuring QuickBooks at your organization!
Mark McCallick, CPA, CITP has a practice dedicated to nonprofit organizations and small business - see http://www.mac-cpa.biz/.
He has served nonprofit organizations for over 25 years and is a
Certified QuickBooks Pro Advisor. He is also the founder of the website www.nonprofit-connect.com
whose mission is to provide nonprofit organizations with a forum to
collaborate with one another and share access to resources and best
practices in the nonprofit industry. You can contact Mark McCallick at firstname.lastname@example.org or email@example.com. These posts were updated by Mr. McCallick in February 2013 for our readers.
This information is extremely helpful. Thank you for being clear in the information you presented.
Wow this is good information, thanks for the notification on further training. We will take advantage of it all.
Thank you for the article, good information to help me get started on my QuickBooks programs.
Hi, I have tried to access the questionnaire you offered when setting up new books, and I get a 403 error, can you help please & Thanks