That time of year when organisations need to get ready to do the end of year tax receipts and year end reporting is fast approaching! It can be overwhelming but with a little planning and a little help from infoodle, the whole process can be made easier.
In this blog post we share a few tips and hints to make it less stressful and to get you started.
What is the best time to start the receipting?
Depending on your organisation, if you issue all your tax receipts at the end of the year, it is best to process the transactions throughout the year and not leave it all to the very end. If there are any errors, they will be identified and can be rectified much easier. The more prepared you are, the better it goes. If you issue receipts throughout the year then any time is a good time, but the closer it is to the date when the donation was made, the better. For many nonprofits, it doesn’t matter when their receipting is done, so it can happen either as donations come in throughout the year or all at the end of the financial year. You may want to send a special acknowledgement for one-off larger donations but include them in the end of year receipt.
What is the infoodle best practice?
infoodle best practice is to send out statement(s) during the year and then generate receipts once a year. However, there are a variety of ways that different organisations choose to generate their receipts:
- One receipt run after year end
Some organisations, such as churches, often collate their transactions throughout the year, and then once the year end is completed, they issue a tax receipt which is a total of the activity for a person during the just completed year.
- On donation receipting
Other organisations receive occasional donations from individuals once or twice a year and wish to be responsive to them. They often issue a receipt at the same time they received the donation.
- Periodic receipting
For some organisations it may be more convenient to process their receipt run once a fortnight, month, or a quarter of the year.
- Mixture of the above
Depending on the type of organisation and donations received, there may well be a combination of the above receipting processes happening throughout the year.
What’s the difference between a Receipt and a Statement?
Different countries use different terms which can cause confusion.
A Receipt (also referred to as a Contribution Statement in some countries) is a tax document with a unique number given on receiving a payment or donation.
A Statement allows you to print off a summary of transactions/activity for a chosen period but does not generate a unique number as a receipt does, leaving it ready to be receipted at year end.
Does infoodle have a year end checklist so I know I have everything ready and set up before receipting?
infoodle does not have a year end process set up in the same way that an accounting system does. However, we do have a comprehensive checklist for you to run through to ensure that you and your data are ready for your year end, whenever it may be:
- Check your Finance system settings. Ensure your Tax year starting date is set, Details of the organisation issuing the tax receipt are entered, and charity registration number is correct.
- Create Email and receipt templates. Revisit your logo, colors, fonts and wording and update them if there have been any changes. Don’t forget to put in the correct year.
- Have all your forms and transactions processed and reconciled.
- Check whether your numbers match your accounting system.
- Check if your individual donors transactions, giving numbers match and if the receipts are to be issued to the individual, combined household or organisation.
- For infoodle clients check out the infoodle help centre for further details.
It may seem overwhelming, but don’t worry, just take it one step at a time. If you are an infoodle client and need some help, just give us a call or send us an email – our team is always happy to help!
If you are not yet and infoodle client, contact us for a demo on how we can make your tax year end a lot less stressful.