How to record a gift in kind
IMPORTANT: You should only be recording Gifts in Kind if your church or charity creates accounts on an accruals basis. If your organisation creates accounts on a receipts and payments basis, and you have received significant Gifts in Kind, then you may need to change to preparing accounts on an accruals basis. See this link for more details.
The easiest way to record gifts in kind via your organisation's Petty Cash account. You can either use an existing Petty Cash account for this purpose, or add a new Petty Cash account especially for gifts in kind.
Note: the advantage of using a Petty Cash account is that you can record the cash transaction and the income / expenditure all in one go. However, it's perfectly fine to record the virtual transactions in a normal bank account instead, then match these transactions to new income / expenditure transactions, if you'd prefer not to use a Petty Cash account.
Within the petty cash account:
- Click Record Petty Cash Expenditure and upload the receipt for the purchase made by the supporting individual or organisation.
- Click Record Petty Cash Income and record a Named Donation from the supporting individual or organisation for the same amount.
The two transactions in value will cancel each other out, so your Petty Cash account will have the same balance it started with (which should be £0 if the account is only used for gifts in kind).
The combination of these two transactions will correctly allow you to record the virtual transaction that took place, as if you had reimbursed the church member or supporter for the purchase and then they donated the money straight back.