1. Do nonprofits need accounting and bookkeeping?
With millions of nonprofits registered with the IRS, the demand for cost-effective, specialized solutions is significant. Since nonprofit organizations operate differently than other businesses, accounting for a nonprofit organization can be complex. Fortunately, with the right accounting practices and organization, you can feel confident with complete compliance and transparency when it comes to your nonprofit’s finances.
2. What is nonprofit accounting?
Nonprofit accounting is financial management! It involves practices like recordkeeping and reporting, which are unique for not-for-profit organizations. Nonprofits rely on specialized accounting services because:
A. They have no owners or ownership interests influencing business decisions.
B. Receive contributions from outside organizations that do not expect returns.
C. Are fulfilled by completing a mission that is outside the scope of profit maximization.
3. What is the difference between not-for-profit and for-profit accounting?
While terminology is different, nonprofits and for-profits rely on similar accounting principles. But, differences remain:
A. Nonprofits have to keep track of the restrictions on their revenues; most for-profits have no restrictions
B. Nonprofits do not have equity. No one owns a nonprofit.
C. Nonprofits track revenues in the year the gift was pledged, despite expenses being incurred in future or different periods.
4. What is the best accounting software for nonprofits?
We have experience working with many nonprofit accounting software. Some of the software we have used includes: Quickbooks, Quickbooks Online, Xero, and Sage Intaact.
5. When do I need to hire an accountant?
Nonprofits look to hire an outsourced accountant or bookkeeper once they hit $150,000 in revenues. The accounting has now become complex with grant reporting and tracking. Transaction volume has also increased so much that the founder may not have the time to keep up.
6. How much does it cost to hire an accountant?
Many nonprofits realize they end up paying more for less. When you walk alongside The Charity CFO, you pay less for more. Check out our three-tier pricing system and find what will work best for your budget.
7. Do you help file our nonprofit IRS 990, IRS 990N, or IRS 990EZ?
Yes! As CPAs, we can prepare and file all of your tax returns.
8. What is a 1099?
A 1099 is a federal IRS form that states compensation to non-employees. This is required to be filed by January 31st each year.
9. Do you help with 1099s?
Yes! Many of our clients have us assist with the preparation and filing of 1099s.
10. Will you help me with my audit?
Each state is different with respect to audits. Use this link to see what rules and apply for your state. As former auditors and current CPAs, our team is equipped and able to help you successfully complete an audit. We help establish internal controls, organize the documentation, and clean up your books so that they are audit ready.
11. Do you perform audits?
There are restrictions on CPA independence. We cannot do accounting and bookkeeping for our nonprofit clients and do their audits. We only focus on nonprofit accounting and bookkeeping and leave the auditing to auditing firms. We are happy to offer a referral if you need one.
12. What does my state tax compliance requirements look like?
Each state has different requirements. Here is a resource that summarizes what each state expects for tax filings.
13. Do you require a minimum contract to work with your team?
We are so confident in the work that we do that we do not require clients to sign any long contracts. We also know that nonprofits are subject to funding cuts that make them have to make difficult decisions. If you had to stop working with us, we would not penalize you for that. We ask for a 30 day notice if you want to stop using our services.
14. What is the difference between bookkeeping and accounting?
Bookkeeping is the day to day processing of your transactions – getting the information into Quickbooks Online or a similar accounting software.
Accounting is the reconciliation, analysis, and understanding of the numbers. Preparing financial statements in a meaningful way for your board and management.
15. I want to switch accounting systems. Can you help me?
Yes! We have many clients with outdated accounting systems and chart of accounts. We can evaluate your needs and come up with an implementation plans with a FREE Strategy Session. Request a meeting with us today!
16. Can you pay my bills?
We pay bills for many of our clients. By having our team of bookkeepers process your bills, you can establish internal controls and segregation of duties. Your auditors and board members will be happy to see the checks and balances in place!
17. Do you process payroll?
We work clients all over the country in cities and states with unique payroll issues. We work closely with payroll experts to make sure our clients are in compliance with their local, state, and federal payroll tax needs.
18. Can you work with virtual nonprofits?
Many of our clients are 100% remote. Their teams are spread out all over the country. During the onboarding process, we figure out the flow of information so we can get what we need to complete the accounting and bookkeeping.
19. Is The Charity CFO team remote?
Our headquarters and the entire staff is located in St. Louis, Missouri. Although we are currently virtual (due to the ongoing COVID-19 pandemic), our team is located in one space. Having the team together makes for easy collaboration as we work on clients together.
20. What type of organizations do you work with?
We have clients in all industries within the nonprofit sector including: social service, education, family and children’s services, arts, humanities, animal rights, religious, homeless shelters, domestic violence, women’s rights, human trafficking, churches, international ministries, foundations, etc.
21. How long is the onboarding process?
Our clients are up and running within 7-10 days. Our full onboarding process usually lasts a full reporting cycle (about 30 days), however, the first week is information gathering and takes a little time from you. Our typical onboarding includes 3 meetings for about an hour each. The rest of the work falls to us!
22. What reports do you include in the financial statement?
Each client is unique and should have unique financial statements. Our core reporting typically includes: Statement of Financial Position (Balance Sheet), Statement of Activities (Profit and Loss or P&L), Statement of Cash Flows, and a Budget Analysis.
23. I already have a bookkeeper. Can you work with her/him?
Absolutely! Many of our clients keep their in-house bookkeeper. We can support this role by assisting in the more complex reconciliations and audit preparation.
22. Where can I find more information about how to grow, maintain, and evolve my nonprofit?
Fortunately, The Charity CFO has many resources available to help you improve your nonprofit. Subscribe to our YouTube Channel and Subscribe to A Modern Nonprofit Podcast, powered by The Charity CFO. You can also ask to join A Modern Nonprofit Facebook Group, where nonprofit professionals gather to converse about trending topics and tips.