By understanding these unique aspects of non profit bookkeeping, you can better navigate the complexities and ensure your organization’s financial stability and transparency. Nonprofits often receive donations with specific restrictions on how the money can be used. Bookkeepers must meticulously track these donor restrictions and ensure that funds are allocated and spent according to donor intentions. Every dollar that comes in and every dollar that goes out must be recorded. It is the role of a nonprofit bookkeeper to record revenue and expenses.

How Much Should You Be Paying for Bookkeeping Each Month?

Bookkeeping for nonprofit organizations mandates diligent recording of all payments and bank transfers to ensure every dollar’s journey aligns with your mission. Nonprofit bookkeeping software is invaluable for efficiently and accurately tracking each payment and transfer. Bookkeeping involves systematically recording and organizing all financial transactions for an organization to ensure accurate financial management and compliance. Nonprofit organizations have unique bookkeeping requirements that differ from those of for-profit companies. Sage Intacct because of its advanced financial management features and built-in HR and payroll modules. Specifically, its multi-entity consolidation helps nonprofits with multiple locations consolidate their financial data into one centralized dashboard.

Managing Donors in Nonprofit Accounting

Smaller organizations with fewer transactions might outsource bookkeeping. This provides accurate records without the need for a full-time employee. If your non-profit lacks the bandwidth or expertise to keep up with fund accounting rules, you could risk paying fines or losing your tax-exempt status.

Best Practices for Non-Profit Accounting

Invoices help nonprofits track funds and give donors proof of their gifts. Fund accounts make creating budgets easier by providing more details on where the money comes from and where it goes. As restricted funds enter your accounts, you may notice specific programs receive more donations. A bookkeeper with experience in fund accounting will create detailed fund accounting reports to help your accountant file quarterly statements and perform audits.

Criteria for Selecting Bookkeeping Software

Running a business is demanding, and keeping track of your finances can be a never-ending chore. Many business owners need The Key Benefits of Accounting Services for Nonprofit Organizations help with the complexities of bookkeeping, which can leave them frustrated and behind. An outside CPA can perform agreed‑upon procedures annually to test controls. Send thank‑you letters within 48 hours and year‑end statements before January 31 to aid donor tax filings.

Our expert accounting team has worked with nonprofits of various sizes and missions for more than 15 years, and we use our experience to create tailored solutions for every organization. We also offer bookkeeping services and fractional CFO guidance through the Jitasa Strategic Advisory Team (J-SAT) to develop a well-rounded financial management system for your organization. With millions of nonprofits registered with the IRS, the demand for cost-effective, specialized solutions is significant.

Recording & Allocating Expenses

This process helps identify and correct discrepancies, preventing potential issues down the line. Also known as the balance sheet, this statement provides a snapshot of the organization’s assets, liabilities, and net assets at a specific point in time. Wave is cloud-based, so you can update your accounting software anywhere, anytime.

• Start-ups and other small nonprofit organizations want to ensure their basic needs are met while keeping costs down as much as possible.
• Then, plan out how you’ll spend your income in a way that achieves those goals.
• Your statement of activities should categorize revenues into restricted, temporarily restricted, and unrestricted.
• You will use your passion for accounting and the nonprofit sector to make a lasting impact on our business and the way we deliver financial solutions.
• If you don’t hear back from the IRS within 90 days, call Customer Account Services to check on its status.
• Internal reviews build audit‑ready confidence and satisfy governance best practices.
• Whether you spend one dollar on paper clips or $1,000 on a venue for a fundraiser, every transaction must be recorded.

Professional Nonprofit Accounting & Bookkeeping Services

You can either assign this task to one of your staff members or trust a professional to handle it. The Charity CFO, LLC is an equal-opportunity employer and we value diversity at our company. If you require special accommodations during the recruitment process, please email our recruiting team whose contact information can be found at the bottom of our Careers page. Allow me to create a customized proposal that meets your goals and budget. Still have questions about how ZipBooks can meet your foundation’s needs? Our team of dedicated customer support professionals can’t wait to show you how much smoother your foundation will run on ZipBooks.

Correctly Understand Overhead Expenses

For example, if you spent $50,000 on fundraising and brought in $500,000, that’s 10 cents to raise each dollar. It may seem kind of obvious, but you need to keep copies of all your corporate documents, such as your Articles of Incorporation, bylaws and related amendments, and your corporate annual reports. What might be less obvious is board meeting minutes, which are the notes of what was discussed and decided in any board meeting. When you partner with us, you’ll pay a flat monthly fee (no hourly billing or overages). So you never have to worry about a “surprise” bill at the end of the month, no matter how many questions you ask. Only registered charities are required to file a return for income tax purposes.