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Many businesses have been doing what they can to help those in need during this terrible bush fire season. Retail and hospitality businesses are raising money from the sale of stock to the bush fire appeals. Others are donating stock directly to areas in need. This is a wonderful idea and if you are thinking of running your own fundraiser, we encourage you to do so.
First, make sure your donations are going to make an impact and be compliant with the ATO and your accounting system.
Fundraising For Organisations
The Rural Fire Services and other organisations have stated what they need most is money. Create an easy way for your customers to purchase goods as a fundraiser through your business.
Be sure to check out the websites of the RFS, CFA or any other organisation you want to raise money for to ensure you meet their requirements for fundraisers. If you have any questions it is best to contact them directly or download a fundraising kit from their site.
When you decide which organisation you would like to support state that clearly where your customers are making their purchases during the fundraising. For example, if you are a café and you are donating all coffee sales on a particular day to the Red Cross make sure it is well posted near the register so people know where their money is going.
If you are going to donate stock directly to the people in need or who are fighting the fires be sure it is eligible as a donation first.
You can do this by checking with an accountant or by looking at the information provided on the ATO website.
It is important to note that donations for fundraisers need to be recorded and reported differently in Xero or any other accounting system you use.
Check With Your Accountant
We highly recommend your check with an accountant to ensure you set up your accounting system correctly to track your goods sold for fundraisers. It is important that this is accounted for in your stock tracking system, so you know the true cost of your donation.
If you use Xero our principle Accountant Parikshit Kikla has recorded the step by step process for reporting the donated stock, watch the short video here.
We would like to encourage everyone to do what they can during this very sad time. If you have any questions about the information in this article please schedule a chat, we are always happy to help.