I was recently asked how to handle a donation transaction in Teesom. Of course, this is very easy to handle in Teesom but what really matters is, if you are using QuickBooks, what happens in your accounting program.

First things first, I instructed the user to create a payment option called Donation. Whether the amount you are donating is the total amount of the order or only part of the order, you will use the Donation payment to ?pay? the part of the order you are donating. However, when it comes to QuickBooks you will not send this payment option over. Instead, you will use the ?Mark As Sent? option on the donation payment and use the Credit Memo in QuickBooks to log it as a donation. Done and done.

Now comes the hard part. The IRS only considers 501C charitable organizations as true charitable tax deductions, so that donation you made to the local soccer team or to your neighborhood school isn?t really considered a donation in the eyes of the IRS. In this case it?s more of a discount, and discounts are marketing expenses. I?m using this discount to drum up more business. You can also look at it as a sponsorship, as well. The benefit of calling it a sponsorship now means I can print my logo on their shirts to promote my business. Win win.

If you are going to call this a discount, well then, your Discount in your Sales Category should already be linked up to your Discount in QuickBooks, so you are good to go. If it’s not, just contact our tech support and we’ll be happy to help you set it up.

Finally, the best advice I can give you is to annually set a budget of how much you want to set aside for sponsorships. And once you have your amount, stick to it. If your amount was $500 and you’ve already hit that amount, tell the group that they need to come to you earlier next year to get a piece of the pie.

No matter what you are doing; donation, discount, or sponsorship, it all affects your bottom line so be smart with it. Don?t dilute your brand by discounting so much that people know all they have to do is balk a little to get you to lower your price. (That’s a conversation for another day).