Six Non-Profit bookkeeping tips to save you time and money
For people who work at non-profit organizations, every day is extremely busy, and you must juggle countless important tasks. It can be hard to prioritize what’s important and what can be left for another day.
Unlike other mission-critical tasks, bookkeeping does not always scream for your attention. However, putting it off is just not an option. More than that, when you do get around to attending to your financial records, you must be meticulous because you need to account for every cent.
Your financial data must be accurate and on time to comply with very serious IRS tax laws and provide a clear line of sight to essential donors and grant givers. If you are an NPO that lacks the best accounting tools and knowledge, you can still use these top tips to help you not only comply with the law but also avoid spending late nights and weekends trying to catch up:
1. Embrace The Move To Paperless
2. Don’t Overcomplicate Your Chart of Accounts
If you are a small NPO, chances are you don’t need a highly detailed chart of accounts. While it is essential to track your revenue and expenses to stay on top of your fund accounting and expense reporting duties, you don’t need to make it more complicated than necessary. A clean and uncluttered set of accounts ensures that your financial statements are easier to prepare and are simpler to read for your board and your grantmakers. You don’t get extra credit for creating fancy charts of accounts!
3. Keep an Annual Operating Budget
Whatever the size of your NPO and no matter your mission, you need an annual operating budget. Before each new fiscal year rolls around, you must create a new budget so your board of directors can examine and approve it. Each new operating budget is linked to your upcoming initiatives. This helps you know what is achievable. Annual budgets can be used as a strategic guide that stops you from making impulsive decisions. Make your budget realistic and simple. Connect it to your previous year’s budget and use it to focus on what you need to achieve in the now.
4. Monitor Your Finances
Keep a finger on your organization’s financial pulse. Financial reports must be scrutinized every month by you and your board to make sure that monies coming in and out match your budget. Financial management is about tracking income and expenses with accurate, up-to-date financial statements. Make sure your current financial statements are always ready before board meetings and can be viewed at any time.
5. Keep An Eye On Fundraising Expenses
When fundraising initiatives are going well they can be a lot of fun, but don’t forget to keep meticulous records of donor contributions and fundraising expenses. Remember, monies from authorized fundraising events are considered contributed income, meaning you should list them as a revenue item in your chart of accounts. Keep all fundraising revenue separate from other revenue lines like cash contributions. As you can see, this is a complicated area, which is why it’s best to speak to an expert.
6. Look For A Trusted Nonprofit Bookkeeping Service
NPOs concentrate on their mission and not their bottom line. This is true, but you should never run an inefficient organization that is unable to keep track of financial data. However, if you are stretched to breaking point, or even if you just want to get your bookkeeping right every time, now is the moment to outsource your bookkeeping so that you are in the best position once tax season comes around.
When you need reliable nonprofit bookkeeping services, turn to the experts at Accsurant. We are a top-rated firm with extensive accounting experience in the NPO field.
We help new or established nonprofits of all sizes and offer the flexibility and scalability to meet specific bookkeeping needs or take over all your financial record keeping. Call us for a discovery meeting.