Nonprofit financial statements, reports and jargon are the key to ensuring your organization, or business, can operate at its full strength. Thus, it is important that you can understand financials- which involves reading, creating, editing and analyzing your financial reports.
Financial reports will shine light as to how much money your organization operates with, how much donations you received and how much your staff are making. Understanding these numbers is especially important when tax season rolls around!
Sara Lahman of Annie Malone is this week’s A Modern Nonprofit guest!
Previously an Assistant Vice President of Residential Treatment Services with Great Circle, Sara knows a lot about helping the community. And as the CEO of an organization with a very influential mission, she knows how important nonprofit finances are.
If you want to learn how to understand nonprofit finances to help your nonprofit thrive, then you need to subscribe and listen to the latest A Modern Nonprofit Podcast episode!
Differences between being the head of a program vs. head of an entire organization
Tips and tricks to understand numbers
The most important thing(s) a nonprofit leader should know about their financials
Strategies to improve financial knowledge for beginners
And more!
Don’t forget to subscribe to our podcast for future episodes, as there’s tons of more exciting content coming your way!
So, you’ve listened to the most recent episode of A Modern Nonprofit Podcast. Now what?
Everything that Annie Malone does is aimed at ‘Making Lives Better’ for the children and families they serve. As a premier organization that provides a diverse array of services advancing the quality of life for children, families, and communities, Sara Lehman and her team at Annie Malone play a vital role in their community. To learn more about Sara’s organization and to support their mission, make sure to visit their website here.
For individuals who might have realized you’re in over your head with your nonprofit financials, then you are not alone. Have you considered outsourcing your bookkeeping and accounting? Check out the services and pricing that The Charity CFO has to offer, and get the help you need to ensure your financials are not only up-to-date, but efficient and modernized.
Fortunately, you’re not alone if you are struggling to understand nonprofit financials. That’s why Tosha and her team created A Modern Nonprofit Facebook group, which is filled with insightful comments, posts and discussions from industry leaders. The best part? It’s completely free to join this inclusive community! Learn more and join today using this Facebook link.
https://thecharitycfo.com/wp-content/uploads/2025/04/Blog-Body-Images-800-x-467-px-10.png467800Paul Cook/wp-content/uploads/2025/03/fileuploads_222926_8055634_252-8e05624973e20b5de823aebdbcfd37df_LogoLeftAligned.pngPaul Cook2021-03-21 00:32:052025-09-29 07:57:42From a Nonprofit CEO: How to Understand Your Financials
This problem is much more common if you’re a nonprofit organization. Whether you’re a public charity, private foundation, or civic leagues, the special rules on nonprofit payrolls can be taxing. You have varying HR elements, from volunteers and contractors to board members.
However, a simple solution is to hire nonprofit accounting services. Excited to overhaul your payroll management? Read on and learn these impressive facts about outsourcing accounting services:
1. Payroll Services Remedy Mistakes
Mistakes can lead to law-imposed penalties. If you’re losing money because of payroll errors, outsource your accounting services. These professionals are vigilant and can resolve them before they become troublesome.
Nonprofit accountants use automated audit software to verify each payroll. They’re proactive in letting you know when they encounter errors. It paves the way to corrections before processing the payroll.
You’ll get the accuracy nonprofit payroll software offers. These professionals check your work constantly. They help you avoid mistakes while giving you ample opportunities to learn.
Getting help means familiarizing your accounting department with the rules. It prevents complicated situations from happening. It allows you to be more decisive and have more confidence with how to go from there.
You need not take your chances when you have payroll experts. They will address various issues to ensure you’re following the law. You’ll get a provider that caters to your nonprofit accounting needs.
The software these companies use is complex and specialized. It aids with every step of the process when checking for accuracy. It saves lots of time since you need not retype information across reports.
2. Payroll Services Eases the Process
Nonprofit organizations often put too many roles on their HR and accounting departments. If it’s your situation, hiring an accounting company is beneficial. It allows you to focus more on other issues like finding proper connections to grow your donations.
A payroll service offsets the hours spent reviewing and verifying payroll data in-house. It’s more efficient and can eliminate the risks of underpayments and late payments. It simplifies the process for your HR or accounting teams.
It’s also worth noting that the sooner you process payroll, the faster the payments are. It’s an important asset especially when your paid employees have limited budgets. With more steps eliminated, you won’t have to worry about low morale.
3. Payroll Services Enable Paperless Processing
Paperless payroll systems save more money while staying environment-friendly. Whether you’re looking for more efficiency or care about the environment, payroll services fulfill both. An online nonprofit payroll system streamlines the process across various departments and roles.
It also means you’re riding the wave of the future with paperless payroll. With enough expertise, you can collaborate with your accounting service. It helps you shift from paper to mobile payroll apps and document storage online.
You’ll have more functionalities with your payroll system. Employees can look at their payroll data in real-time. Your accounting department can change security levels to keep sensitive data from getting compromised.
4. Payroll Services Enable Real-Time Tracking
Things are easier when everyone gets quick information access. When professionals track your payroll system, you’ll know when problems happen. It means making timely changes to correct these issues.
It allows you to get closer to a hassle-free payroll process. You’ll always be on time, ensuring everyone’s satisfaction. This process becomes even better when using an integrated system.
You’ll always have an idea about the current labor costs situation. It allows your nonprofit to make more financially-sound decisions. It ensures everything is up-to-date and adherent to your cause.
Why Nonprofit Accounting is More Difficult
Without professional help on accounting for nonprofit organizations, you’ll encounter some hardships. The following are unique challenges for nonprofit payroll accounting. Use them to inspire your organization to outsource:
1. Financial Inexperience
Your board members are accomplished professionals. They have lots of useful skill sets that bring benefits to your organization. However, it’s uncommon for them to come from financial backgrounds.
Your organization must have a higher level of financial transparency. It gives your organization the right information for decision-making. Understanding the nonprofit’s financial aspects is necessary to help the board focus on a higher-level view.
Never let financial bookkeeping distract your leadership from the mission. Outsource professionals that specialize in nonprofit organizations. It maximizes your organization’s greatest potential.
2. Donor Expectations
As a nonprofit, your donor expectations are one of your priorities. Entities donate funds because they believe in your cause. Your funds must go to where your donors expect them, like programs that further your mission.
Your organization must do it without overspending. It means smart budgeting on administrations, expenses, and fundraisers. Keep your donors updated on your expenses to help build their trust.
3. Strict Audit Requirements
Nonprofit organizations have stricter audit requirements. People expect your reporting and internal control standards to be better. Most states require audits if you get at least $500,000 in donations.
This standard is necessary because the funding comes from public donations. It means everyone must know where the money goes. Your organization is accountable to use the funds correctly and advance your mission.
4. Public Trust
As said above, your funding comes from various public entities. It places the burden of public trust upon your organization. These people expect you to have an effective and efficient operation.
Often, they hold your organization to higher standards compared to for-profit businesses. Some organizations serve as watchdogs. They track your financial activities to ensure you’re using your funds as intended.
The same applies to your payroll management processes. To avoid discrepancies, invest in nonprofit technology. It can help you further your cause, helping you establish your local presence.
Hire Nonprofit Accounting Services Today!
Never let the lack of financial expertise ruin your nonprofit organization. Outsource nonprofit accounting services to take the burden off your shoulders. It allows you to focus on more important matters for the greater good.
https://thecharitycfo.com/wp-content/uploads/2025/04/Blue-and-White-Colorful-Gradient-Music-YouTube-Thumbnail.png7201280Paul Cook/wp-content/uploads/2025/03/fileuploads_222926_8055634_252-8e05624973e20b5de823aebdbcfd37df_LogoLeftAligned.pngPaul Cook2021-03-07 21:56:242025-09-29 07:57:45Using Nonprofit Accounting Services to Help with Payroll Management
Hosted by Dr. Patton McDowell, this episode dives into the specifics of nonprofit leadership. Further, individuals in this type of role need a wide range of skills and experiences to be successful.
Discussed in this episode of the Path Podcast
But, no single leader can manage all of the technical aspects of a growing enterprise without help. So, this episode is for any nonprofit leader who is looking to find answers to key questions such as:
What important contracts and agreements should you be focused on?
Why is it hard for people and your fundraisers to get along?
What is the best way to manage the accounting and bookkeeping part of your business?
And more!
If you are new in your leadership position, you may not even know where to begin. Fortunately, look no further than this podcast episode to get you started!
Next Steps for Nonprofit Leaders and Listeners
Interested in learning more about Patton and PMA Consulting? Need help identifying your organization’s points of pain? Looking to build a plan to knock them out? Hoping for the resources to help you be at your best? Then you need to check out this Patton’s website.
Do I need to hire a CPA firm for my nonprofit? Why can’t my finance person just take care of and publish my not-for-profit finance statements? Preparing for a not-for-profit audit is not something you should fear.
Plus, these are complex questions that only an expert accountant for charities can answer. There are a lot of standards to follow in finance! Unfortunately, these standards do not get any easier when you are asking if your nonprofit should seek an audit.
Preparing for a Not-For-Profit Audit
In fact, this is why Jeanne Dee, a partner at Anders CPAs + Advisors, was this week’s speaker on Episode 3 of A Modern Nonprofit Podcast. Tosha Anderson’s latest guest dove into the specifics of what a certified public accountant does. Additionally, Jeanne discusses the differences between a review versus an audit. LISTEN TO EP. 3: PREPARING FOR A NOT-FOR-PROFIT AUDIT WITH JEANNE DEE HERE.
Sometimes, different states have different expectations when it comes to the audit of a nonprofit. Nonprofit finances has a lot of standards that you must know! Fortunately, Jeanne highlights the types of expenses, fundings, and risk assessment process for not-for-profits. Plus, Jeanne explains the difference between procedures and policies. This distinction is important for having a good business mindset. Also, good documenting, risk assessment, and succession plans are points that auditors will want to consider.
So, why do nonprofits need to have an audit? Sometimes, an audit is required. Other times, an audit can be a valuable tool to understand the qualitative aspects of an organization. An audit will help you dig deeper! You can become a stronger charity because of it. This consideration is discussed later in Episode 3. Further, the two leaders discuss common mistakes and nonprofit fundraising, too. It’s a great discussion you don’t want to miss!
Prepare for Your Charity’s Audit
Plus, there are many benefits to having an audit. So, if you are looking for a nonprofit certified public accountant, The Charity CFO’s team of expert accountants are ready to help you work through your books. Schedule a free strategy session with us today if your auditors have started asking for spreadsheets. Or, if you are ready to take control of your nonprofit bookkeeping, we are here to help.
Lastly, if you would like to learn more about internal and external accounts with respect to the different industries, check out Jeanne Dee’s information.
https://thecharitycfo.com/wp-content/uploads/2025/04/it-audit.png426600Paul Cook/wp-content/uploads/2025/03/fileuploads_222926_8055634_252-8e05624973e20b5de823aebdbcfd37df_LogoLeftAligned.pngPaul Cook2020-12-17 06:34:222025-09-29 07:57:55Preparing for a Not-for-Profit Audit: Episode 3 of A Modern Nonprofit Podcast
A Modern Nonprofit Podcast is back for Episode 2. Tosha Anderson and Ben Golden of Golden Tax Relief discuss nonprofit taxes and the IRS!
But before we dive in, if you were lucky enough to donate to a charity this year, The Charity CFO thanks you. As expert accountants for nonprofits, our team knows that contributions of any kind are important. There is a lot of money involved in the nonprofit world, especially on the business side!
A Modern Nonprofit Podcast Ep. 2 covers nonprofit taxes and dealing with the IRS.
Nonprofit Taxes and the IRS Key Points
Aside from payroll, the leaders agree that compliance is the key. When considering nonprofit taxes, Tosha and Ben discuss the responsibilities of nonprofit board leadership. They also talk about why you must have plans for payroll, reimbursements, and compensation purposes.
Administrative work is important for nonprofits, but if you are wondering if a nonprofit gets taxed, then listen in as Ben talks about how nonprofits can save money with taxes.
If you haven’t already, listen to Episode 1 of A Modern Nonprofit Podcast here. Tosha talks with Eileen McGhee of Veer Up to talk about how to reduce racism, be a diverse organization and promote a positive nonprofit culture.
Additional Links
Questions about the IRS and your nonprofit? The conversation continues at A Modern Nonprofit Facebook Group. Here, professionals collaborate to talk about industry trends and issues. Don’t miss out.
Additionally, if you are seeking help with wage garnishes and delinquent tax returns, check out Ben Golden at Golden Tax Relief.
Lastly, forget to Subscribe to A Modern Nonprofit Podcast for future episodes, and make sure to share/tag us on your Twitter, Facebook, and additional social media feeds!
https://thecharitycfo.com/wp-content/uploads/2025/04/istockphoto-1178314435-612x612-1.jpg408612Paul Cook/wp-content/uploads/2025/03/fileuploads_222926_8055634_252-8e05624973e20b5de823aebdbcfd37df_LogoLeftAligned.pngPaul Cook2020-12-11 01:28:582025-09-29 07:57:57Nonprofit Taxes & the IRS: Ep. 2 of A Modern Nonprofit Podcast
Today, you might feel there are few things you have control over. Fortunately, taking control of your nonprofit finances is not one of them.
Since the novel COVID-19 pandemic has forced the world into a remote economy, nonprofits face a time of financial transition.
91% of global nonprofit organizations suffered operational damage in the crisis. This 91% is an improvement from the 96.5% recorded in March.
Waiting for normalcy is only a long-term solution that many organizations can’t afford. However, learning how to transition into a new normal can help your organization get back on its feet.
Understanding how to manage your finances is the best path to regaining stability. Here’s how you can start taking control of your nonprofit finances sensibly and effectively.
Taking Control of Your Nonprofit Finances
It’s important to consider how money transfers through different hands within your organization.
A board of directors should oversee general operations. An added financial branch of operation can still go a long way. Delegate financial tasks to a specific individual or group of individuals. That way, you centralize the information handled in the accounting process.
Along with financial managers, you can outsource your accounting tasks. Getting professional advice is a much more efficient way to get your finances in order.
Nonprofits that manage finances internally can appoint at least 2 or 3 people to manage. They can be direct points of contact between the organization and the finances.
You can also assign different functions to those in your financial branch. One member can manage executive functions while supporting members manage secondary tasks. This structure promotes organization, accountability, and transparency within your financial branch of operation.
Multiple Streams of Funding
Adding more streams of funding to your organization is essential to financial balance. Receiving support from more than a few sources adds to the revenue to collect.
It also adds more financial security. Instead of relying on one funding source, you open up more opportunities.
Collective revenue from various sources adds up and gives you more stability. If one stream dries up, you’ll still have the flexibility to focus on others in times of need.
Relevant Streams of Funding
While you grow more streams of funding, you should also make your sources relevant to the times. Prior to the pandemic, common sources of funding for nonprofits included:
Sponsorships
Grants
Programs tuition
Fundraising Events
Donations
Subscriptions
Nonprofits that focus more on in-person fundraising should consider more reliable funding sources.
Instead, there are more reliable, contactless methods of funding. These include sponsorships, grants, donations, and subscriptions.
Sponsorships and grants often involve some research and individual outreach. The scope of their awarding processes also requires waiting periods and gaps. Still, they’re useful sources to consider for long-term operations.
Tracking Expenses and Profits for Taking Control of Your Nonprofit Finances
Multiple streams of funding ensure that money flows into the organization.
This is a two-way stream. It’s possible for cash to flow out of an organization at a high rate.
Tracking the expenses shows you funds entering and exiting the budget. Your financial branch tracks expenses and two-way cash flow. The board of directors advises the active spending goals and habits.
The board and financial managers should meet on a regular basis. Your budget and the size of your organization should determine how often you meet.
It’s also helpful to automate some of the tracking process through software. You can use tools like Quickbooks or GetApp. Tools like these will allow you to begin taking control of your nonprofit finances.
These have specialized features for nonprofit organizations. They can also help you with the distinction between nonprofit and commercial operations. Many softwares also include tax forms and documents. You can use these to help your organization with legal compliance guidelines.
Basic Budgeting
Your organization should use budgeting to inform the other areas of financial management. Here are two basic budgeting tips to follow.
Budget Structures
Each nonprofit should have monetary goals relative to their operational goals. There are three main budgeting structures every nonprofit should know:
Surplus budget
Balanced budget
Deficit budget
These structures are often used in government or commercial spending. They’re useful guidelines to help you estimate profit margins and losses.
When your fundraising efforts exceed expectations, you have a surplus budget.
A balanced budget indicates the expenses are expected to meet profits. In contrast, a deficit budget means that expenses exceed profits. So, there’ll be a margin of lost funds to recover.
Your total budget operates within these structures. As you continue to fundraise, you can determine which type of budget your organization currently operates on.
Budget Timelines
A budget should also include a realistic timeline for specific goals. Be sure to include important landmarks in the year where you need to measure performance.
You can split the fiscal and calendar years into quarters to make goals more realistic. Then expand to an annual timeline to measure more long-term growth.
Board meetings should also align with your timeline of goals. Or, you can increase their frequency to keep up with constant changes.
Taking Control of Your Nonprofit Finances: Outlining Policies
The most important step in financial management is documentation. This includes recording tangible copies of your budget, funding sources, and financial goals.
However, you should also consider implementing or updating your operational policies. This includes spending and investment policies.
Updating your policies may crossover with budgeting. Typically, a budget tends to represent your organization in numbers. A policy shows the larger investment potential.
The content in your policy may also intersect with legal guidelines. For nonprofits, these guidelines often determine eligibility for certain funding opportunities or methods.
Manage Your Nonprofit Finances Now
Financial health is an essential part of any nonprofit organization. We can show your organization how to weather the storm and become financially resilient.
With our team of experts, you can get professional accounting and bookkeeping services. We’ll tailor your financial services to the needs of your organization.
To begin taking control of your nonprofit finances today, contact us, and request a meeting.
https://thecharitycfo.com/wp-content/uploads/2025/04/loadimage.jpg627940Paul Cook/wp-content/uploads/2025/03/fileuploads_222926_8055634_252-8e05624973e20b5de823aebdbcfd37df_LogoLeftAligned.pngPaul Cook2020-12-08 17:31:582025-09-29 07:57:58Taking Control of Your Nonprofit Finances
Are audit services on your mind as a nonprofit organization leader?
Do you run a non-profit and worry about your fiscal fitness? Are your productivity and scalability as efficient as it could be? If you’re concerned about these things for your organization, then you should consider an audit.
As a non-profit, you owe it to your donors to stay as lean and as efficient as possible. And in order to maintain your NPO status, you need to keep good record books. So enlisting outside audit services can be just what you need to be successful.
And don’t worry if the mention of an audit sent a shudder down your spine. We get it, nobody likes the idea of getting audited, but outside of the IRS, an audit can be a valuable tool to assess your current situation and look at the areas that can be improved.
If you’re concerned about how to fully utilize an audit, keep reading. We’ve got you covered on the different types of audit services as well as how they can benefit you and your organization.
Four Different Types of Audit Services
Nobody likes the idea of an audit. However, when it comes to maintaining the financial health of your nonprofit business, audits are necessary. An audit can take less time if you can keep your financial paperwork organized and thoroughly documented.
There are several different types of audits that are done by different people and will give you different outcomes based on your goals. Some audits are done internally while others are external and require an outside point of view.
When many people think of audits they think of accountants scrutinizing your finances. But operational audits are also just as valuable to your organization.
1. Operational
An operational audit will look objectively at the systems and functions of your business. The audit will assess your business’ systems and productivity as well as your available resources. They will then make their recommendations for how these areas can be improved and what additional resources will be necessary to make the changes needed.
Operational audits can look at your systems and processes as well as your various departments; these can include IT, HR, and staffing. Additionally, if you find your organization continually missing your goals and objectives, then an operational audit can shine a light on this. You can learn why these goals weren’t met and what can be changed to start meeting your goals and objectives in the future.
2. Financials
A financial audit will evaluate your current financial situation for your business or nonprofit organizations. After their complete assessment, they will give their recommendations for how you can improve the fiscal health of your charity.
They will look at your accounting records as well as your financial reporting of accounts receivable and payable. So, it is vital to keep good records so you can get an accurate assessment of your financial situation within your nonprofit.
If you want your nonprofit to help as many people as possible, you must be fiscally responsible year after year. If you find your organization continually behind with your accounting then the help of a CPA can benefit your company.
A professional bookkeeper will help you keep your records so that you never again dread another audit. Audits are helpful and beneficial tools for your company. And having good records can make them smooth and seamless which will allow you to learn from them rather than stressing out about getting them the right records for their audit.
3. Internal
An internal audit is usually done by and for the management of your company. This form of assessment gives light to how your company can make improvements and grow in the company years.
Regular internal audits are important to shine lights on possible areas of growth within your company. It doesn’t do your business any good to continue to do things as they’ve always been done when there is a better way of doing it.
In order to truly grow your company and help more people with your non-profit, you need to continually be open to new ways of doing things.
4. External
An external audit is done by a neutral third-party person or group looking at your business or nonprofit from an outside point of view. These audits are just as important as internal audits and will provide your company with a much-needed alternate viewpoint.
Additionally, by conducting an external audit you open your business up to learning about possibly blind spots that you hadn’t noticed before. This external point of view is vital to growing a healthy business so don’t shy away from it. It can be difficult to ask the opinion of someone outside of your organization, but it is imperative to healthy growth.
By bringing in an external CPA to look at your records regularly you can ensure that your charity will be able to help as many people as possible. While it can be difficult to bring in an outside group of people to dive into your finances, this is a vital step to providing valuable insight and reassurances that you’re operating a successful business.
Keeping good records in accounting software is vital to quick and easy audits. Additionally, having a bookkeeper can improve your audit experience. By having a professional help you keep good records in an organized manner can help you to have a better audit.
Bottom Line: Keep Your Business Financially Healthy
As you can see an audit doesn’t have to be scary. In fact, it can be a healthy process to learn where your non-profit can improve over time.
And enlisting the help of external audit services can be a great way to take an objective look at your non-profit. You’ve put your whole heart and soul into helping those who can’t help themselves. Don’t risk everything by not keeping your organization running efficiently and financially responsibly.
So, if you think that an audit would be a good experience for your non-profit, then find a CPA you can trust to come and take an objective look at your company today. With the help of an experienced professional, you can ensure that your non-profit will be around for years to come to help many more people.
So, if you’re looking for help on anything from filling out your Form 990 to updating your bookkeeping, then let’s chat. We offer affordable services and can help you set up your non-profit for success today.
https://thecharitycfo.com/wp-content/uploads/2025/04/Screen-Shot-2020-10-12-at-11.10.33-AM.png318464Paul Cook/wp-content/uploads/2025/03/fileuploads_222926_8055634_252-8e05624973e20b5de823aebdbcfd37df_LogoLeftAligned.pngPaul Cook2020-10-12 16:17:032025-09-29 07:58:03The Different Types of Audit Services and What They Mean For Your Nonprofit
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Discussed in this episode of the Path Podcast
