Sage-50-charities-nfp-Mythbusters

Sage 50 Mythbusters: You cannot run a charity or NFP on Sage 50

In Sage 50, sage myths by Paul Newton

Reading Time: 6 minutes

The third incarnation of my Mythbuster series on Sage 50cloud Accounts. We will start as has become normal!

On my visits with Sage 50cloud customers throughout the last decade, several things have become fairly obvious to me.

In no order of priority:

  • Quiet carriages on the trains are not ever really that quiet.
  • The North-East of England and the North of Wales are very similar and are beautiful places to visit and live.
  • When going through security at airports how do people still not realise they need to remove their belts?
  • Karma absolutely exists when driving on the M62, if you drive with courtesy and kindness it leads to a trouble-free journey.
  • Charities very rarely exist off grants and funds from the government.

On this last point, it has become more and more apparent to me is that charities need to manage their accounts as all other businesses do.

There is a myth out there that this cannot be achieved using Sage 50. I’ve had it said to me on several occasions.

In this article, we will look at how to activate the charity options and some of the considerations around using them in Sage 50cloud Accounts.

Sage 50 Charity/NFP Myths: Myth Number One. “There are no options for charities or NFP’s in Sage 50cloud Accounts”.

Absolutely incorrect, there are many options for processing. However, out of the box, the setting for this is not turned on.

From an options point of view, once activated the main ones are.

  • SOFA (Statement of Financial Activities) report.
  • Ability to edit the default SOFA categories.
  • Assign SOFA to your nominal codes.
  • Funds – create, add balances and transfers between.
  • Gift Aid.
  • Assign customer accounts as members or donors.
  • Other charity reporting.

If you are new to Sage 50 and have not yet activated or added any transactions then activating the module is easy.

Log into your blank database, go to Settings > Company Preferences > Parameters > Others and check the box for “Enable Charity/Non-Profit options” as below.

Then click, OK – you have now activated the charity/NFP options in your company on Sage 50cloud Accounts.

If you are already processing in your Sage package and the check box is now greyed out, all is not lost – please get in touch with us so we can discuss your options.

Sage 50 Charity/NFP Myths: Myth Number Two. “Funds do not exist in Sage 50”.

As explained earlier they don’t exist out of the box, but once you activate the charity options they do, in fact, they have their own menu on the left side of the product.

To add a new fund click on charitable funds on the left of the screen and then on new.

You can then add a name for the fund plus a type of fund*, there are three to choose from.

  • Restricted fund – held for a specific reason, for example, a homeless fund.
  • Unrestricted fund – no restrictions on how this fund can be used.
  • Endowment fund – money donated and held to generate long-term income.

*hint – the fund type is purely for reporting, you can use the funds as you see fit, there are no actual restrictions in Sage Accounts.

Sage-50-for-charities-small-cta

You can then designate a nominal code to be used for this fund, this must be a code that sits within the Capital and Reserves type on your Chart of Accounts.

If there is an opening balance that can also be entered here, details required for this would be the bank associated (or suspense account), the date of the opening balance, any reference and of course the value.

Then there are a couple of optional fields around contact and institution that you may wish to associate with this fund.

Once you then click OK you have set up a fund.

Reporting I hear you ask! Ok, yes there are some specific fund reports within the product. These are found in Charitable Funds > Reports > Charity reports.

  • Balance Sheet by Fund.
  • Fund Analysis Report.
  • Fund Nominal Activity.

Sage 50 Charity/NFP Myths: Myth Number Three. “There is no such thing as donations in Sage 50”.

There are actually two ways of showing a donation in Sage 50cloud Accounts.

Option 1, use a good old fashioned bank receipt and choose the relevant fund and nominal code when posting, use the reference field to show as a donation.

So click on Bank Accounts > Bank Receipt and fill in the details of the receipt.

This will show a donation coming straight in with no customer details, so no option for Gift Aid later on.

For the eagle-eyed viewer, you may have noticed a new button along the top of the bank called “Donations”, let’s talk about this now.

Option 2, Donations option in Bank.

If you’re using customer accounts, specified as donors, and want to calculate the gift aid later that can be reclaimed then you would always use this button.

Again, go into Bank Accounts but this time then click on Donations. Complete the screen as you need and click Save.

This option posts both the Sales Receipt (SR) and the Sales Invoice (SI) onto your customer activity automatically.

Sage 50 Charity/NFP Myths: Myth Number Four. “SOFA reporting is not a possibility”.

The SOFA report is the Statement of Financials Activity report which can be needed for several appropriate bodies. Sage 50 does come with a default set of categories.

These are found in Settings > Nominal Defaults after the Charities option has been turned on. From here you can view, review and even edit if needed.

To check which categories are assigned to your nominal codes (Income and Expenditure) then you can do so by viewing your nominal record.

Go into the Nominal codes option on the left, then double click on the code you wish to check. You can change the category using the drop-down and then clicking on save.

The SOFA report is found in Charitable Funds > Reports > Charity reports, when run it should look something like this.

Conclusion

I do hope you have found this myth-buster around Charity and NFP options with Sage 50cloud Accounts of use. If you are an existing Sage 50 user, we offer Sage 50 support packages that boast phone first support with no automated queues and a friendly support team that gets to know you and your business. You can take a look at our Sage 50 Support, here.

If you currently do not have Sage 50 but you’re looking to learn more about how it can help you you can learn more about it here. If you’re a not for profit or charity, you can learn more about Sage 50 for charities here. We also offer personalised Sage 50 demos, they’re no obligation and tailored to your business, you can request one here.