Tag Archive for: #nonprofit accounting

Why Nonprofits Need to Switch from Cash-Basis to Accrual-Basis Accounting

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The type of accounting your organization uses could be holding you back from getting the most out of your accounting system. While many nonprofits start with cash-basis accounting due to its simplicity, this method often falls short of providing a comprehensive view of a nonprofit’s financial health.

Transitioning to accrual-basis accounting can offer a more accurate representation of finances and enhance long-term planning. Let’s look at the differences between cash-basis and accrual accounting and why you might want to switch.

Accrual-Basis Accounting

Understanding Cash-Basis vs. Accrual-Basis Accounting

Before we can know why to switch accounting systems, it’s important to understand how each system works. The main difference between cash-basis and accrual-basis accounting is when revenue and expenses are recorded.

In cash-basis accounting, revenue gets reported only when the cash is physically (or digitally) received. Likewise, expenses are recorded when money leaves the organization’s account. Cash-basis accounting is most common for smaller nonprofits, where financials tend to be less complicated.

Accrual-basis accounting, on the other hand, records revenue and expenses when they are incurred. The accrual-basis method records transactions with the assumption that the money will physically change hands in the future.

For example, a nonprofit provides a paid service to a community member and issues an invoice. The revenue from the service is recorded now, even though the invoice hasn’t yet been paid.

Limitations of Cash-Basis Accounting for Nonprofits

Cash-basis accounting is a simple method that’s great for new or small nonprofits. However, there are two major limitations to using the cash-basis method:

  • It inaccurately represents financial health.
  • It can cause challenges in long-term financial planning.

The timing of an organization’s income and expenses in cash-basis accounting can misrepresent the actual financial state of the nonprofit. Additionally, the cash-basis method can make accurate forecasting and budgeting difficult.

Say a nonprofit hosts a large fundraising event in the second quarter. The costs for the event are all paid in the first quarter, but donation funds and other revenue won’t come through until the second quarter.

By using the cash-basis method, this organization would look like it’s struggling financially in the first quarter but has a major surplus in the second. The reality is somewhere in the middle, but the organization may be tempted to under budget for the first quarter and over budget for the second.

Benefits of Accrual-Basis Accounting for Nonprofits

Switching to accrual-based accounting can have a lot of benefits for nonprofit organizations. Most importantly, making the switch can help your organization:

  • Enhance the accuracy of financial data
  • Increase transparency
  • Improve financial decision-making

Enhanced Financial Accuracy

By recording revenue and expenses when they happen, instead of when cash is exchanged, helps provide a more accurate picture of the organization’s financial health at any given time. You’ll get a better view of long-term financial transactions, rather than just seeing what cash is currently in an account.

Accrual accounting also helps keep related revenues and expenses together. Matching revenues with the expenses incurred to generate them reflects the true cost of running programs and services.

Improved Financial Transparency

Accrual accounting provides stakeholders with a detailed view of your organization’s financial activities, improving trust and confidence. Transparent financial reporting can also improve donor relations. With increased transparency through accrual accounting, donors can see how their contributions are being used and the impact they’re making.

Better transparency also helps you stay compliant with regulations or grant requirements. Many regulatory bodies and grantors require accrual-basis financial statements. Adopting the accrual method ensures compliance with Generally Accepted Accounting Principles (GAAP) and other relevant standards. By making the switch, you could open your organization up to more grants and funding opportunities.

Facilitates Better Decision-Making

A more accurate understanding of your organization’s financial health means nonprofit leaders can make better strategic, data-driven decisions. Accrual accounting provides the data needed to forecast cash flow, budget more effectively, and allocate resources where needed most.

An accrual-based accounting system also gives you insights into the efficiency and effectiveness of programs and services. Detailed financial reports generated using the accrual method can highlight inefficiencies and areas for improvement within your organization. By analyzing the financial performance of programs, you can determine which initiatives are delivering the most value–and which may need adjustments or more support.

Accrual-Basis Accounting

Get Support for Your Cash-Basis to Accrual-Basis Transition

The cash-basis accounting method is simple, but simplicity could be holding your organization back. Moving from cash-basis to accrual-basis accounting can help your nonprofit better manage its financial health and improve transparency. 

While switching to accrual-basis accounting can be daunting, the easiest way to make the switch is to work with a trusted nonprofit accounting firm, such as The Charity CFO.

Our dedicated team of accounting professionals specializes in nonprofit accounting–ensuring your organization gets advice from accountants who understand the unique needs of nonprofits. Get in touch today to see how we can help you transition accounting systems!

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What to Look for in Nonprofit Accounting Services

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Choosing the right accounting services is crucial for the financial health of your nonprofit. The right nonprofit accountant helps your organization properly manage its finances, which improves trust and transparency with stakeholders and donors.

nonprofit accounting services

Let’s explore the key factors to consider when researching nonprofit accounting services–from the firm’s expertise to its technology recommendations–so you can be sure you’re getting the nonprofit accounting your organization needs.

1. Nonprofit Accounting Expertise and Experience

Nonprofit accounting isn’t the same as for-profit business accounting. Your organization needs a nonprofit accountant who understands the differences and has experience in nonprofit accounting. Look for accounting firms that specialize in nonprofit accounting when researching accounting services.

Specialized nonprofit accountants know the ins and outs of nonprofit accounting, so they can easily jump into managing your organization’s finances. Unlike a generalized accountant, nonprofit accountants already understand the unique challenges and regulations nonprofit organizations face. This can be especially important when it comes to reporting and filing requirements.

2. Services Offered

When selecting nonprofit accounting services, looking for a firm that offers a comprehensive suite of services tailored to your needs is important. There’s a wide range of accounting services your organization might need, including:

  • Bookkeeping
  • Financial reporting
  • Tax preparation
  • Audit support

These key services are vital to maintaining the financial health of your organization. Proper tax preparation, for example, can help your nonprofit stay compliant with financial regulations and maintain tax-exempt status. Likewise, an accountant who offers financial reporting services can help you choose and prepare the right financial reports for your board of directors, donors, or the general public.

Additionally, most nonprofit accounting services include specialized services for nonprofits, such as:

  • Grant management
  • Providing recommendations for best practices as your organization scales
  • Financial goal setting

Specialized accounting services like grant management help your organization efficiently manage funds to help meet donor expectations and plan for growth and sustainability.

3. Technology and Tools

The modern world is built on technology, and nonprofits are no different. Technology is one of the most important tools in modern nonprofit accounting. When researching nonprofit accounting services, aim to work with a firm that embraces and encourages technology like accounting software or donor management systems.

A good nonprofit accounting firm will work with you to find the right technology tools to help you simplify your bookkeeping. For example, they might recommend tools that make it easier for employees to track expenses using a mobile app. This eliminates the need to collect paper receipts from employees and streamlines your accounting systems.

You should also choose nonprofit accounting services that prioritize nonprofit data privacy. Data breaches can plummet public trust in your organization, so it’s important to use secure technology and software.

4. Customization and Scalability

You may not need the full range of your accountant’s nonprofit accounting services right now. But what happens as your organization grows? You’ll likely need expanded accounting services.

Your nonprofit accounting services should be customized to fit your current needs. However, you also want to work with an accountant who can scale your services to fit your future needs. Consider the future of your organization as you look for nonprofit accounting services.

5. Transparency and Communication

Accountants often work with sensitive financial data. It’s no surprise that should look for nonprofit accounting services from a trustworthy firm.

However, you also want to take the firm’s transparency and communication skills into consideration. Does the firm respond quickly to messages? Are they open and honest about the state of your organization’s financials? These factors can help you narrow down the right accounting services for your nonprofit.

6. Cost and Affordability

The final thing to look for in nonprofit accounting services is the price. Unfortunately, financial sustainability is one of the biggest challenges facing many nonprofits. You need to be sure you can afford the nonprofit accounting services your organization needs.

On the other hand, it usually doesn’t make sense to choose nonprofit accounting services based solely on cost. The key is to find accounting services that balance the cost with the quality of services provided.

Luckily, many nonprofit accounting services can be tailored to fit your needs–including your budget. As you look for accounting services, be sure to let potential accountants know your budget so they can build an accounting plan that meets your financial constraints.

nonprofit accounting services

Find the Right Nonprofit Accounting Services

Your nonprofit accountant is an important decision for your organization. Focus on these six factors when researching accounting services to ensure you find the right fit for your organization. The right accounting services will help your organization streamline financial processes, build trust with donors and stakeholders, and ultimately contribute to expanding your mission.

At The Charity CFO, we understand the unique financial and accounting needs of nonprofits. Our team specializes in nonprofit accounting and we take pride in being able to accurately and efficiently help nonprofits streamline their accounting processes. We’re here to help you better understand the financial health of your organization–and discover ways to improve.

Get in touch today for a free consultation on our nonprofit accounting services!

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7 Questions to Ask a Nonprofit Accountant

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The right accountant can be the difference between an efficient accounting process and a total mess. That’s why it’s so important to know what to look for in a nonprofit accountant.

So what happens after you’ve found a few firms that offer the services you need? The next step is to ask your potential nonprofit accountant a few questions to see if they’d be a good fit for your organization. 

Here are seven questions to ask a nonprofit accountant before working with them.

nonprofit accountant

1. What is Your Experience Working With Nonprofit Organizations?

As a nonprofit leader, you know nonprofit accounting isn’t the same as for-profit business accounting. Yet, it’s all too common for nonprofits to hire an accounting team with little to no experience in nonprofit accounting.

One of the first things to ask a nonprofit accountant is their experience with nonprofits. Working with someone who understands the unique financial challenges of nonprofits will make your partnership more seamless.

An accountant without nonprofit experience may need weeks or months to learn the ins and outs of nonprofit accounting before they can start helping your organization. Accountants with nonprofit experience, on the other hand, can hit the ground running to analyze your books and make insightful recommendations for your organization.

2. Are You Familiar With Nonprofit Accounting Regulations and Standards?

Tax filing or reporting mistakes could cost your organization its tax-exempt status. Your nonprofit accountant should have a good understanding of the current nonprofit tax laws and regulations related to your organization.

In addition, your accountant should be able to help you navigate unique nonprofit tax situations. For example, your nonprofit owns a for-profit business, which could lead to complicated tax requirements or even loss of exempt status. You want to know your accountant can help you figure out what needs to be done to stay in compliance as a nonprofit.

3. How Do You Approach Financial Reporting for Nonprofits?

Accurate financial reporting is essential to a nonprofit’s success. Having accurate reports helps promote transparency, showing your commitment to ethical conduct and integrity. This transparency also helps build trust with a variety of stakeholders, including:

  • Employees
  • Volunteers
  • Board of Directors
  • Donors
  • Beneficiaries

However, not all financial reports are the same, especially if you need to present different data to various stakeholders. You can ask your accounting team how they handle financial reports to learn if their system will work for your organization. For example, your accountant might suggest using an accounting system like Quickbooks to streamline financial organization and easily generate reports.

4. What are Some Success Stories of Your Past Nonprofit Clients?

This is a great question to ask a nonprofit accountant. You might think of asking for client success stories or case studies as asking for an accountant’s portfolio. This is a chance for them to show you how they’ve helped other nonprofits like yours.

You can dive in further and ask the accountant a few follow-up questions as well, such as:

  • What are some cost-saving strategies you’ve used with other clients?
  • How did using accounting software improve efficiency for other nonprofits?
  • How did your financial strategies help the financial health of an organization?
  • What’s your process for evaluating an organization’s financial needs?

5. How Do You Ensure Transparency and Clear Communications With Clients?

Clear and open communication channels help everyone stay on the same page when it comes to an organization’s financials. You need your accountant to be accessible to answer questions and provide advice in a timely manner.

Asking a nonprofit accountant how they handle client communications–and if they’re willing to use your systems–can give you a better idea if you’ll work well together. For example, you might prefer phone calls over emails. You’ll likely want to work with an accountant who will accommodate your preferences.

6. Do You Offer Additional Services Besides Basic Accounting?

Bookkeeping and standard accounting services are major parts of nonprofit accounting, but what if you want an accountant who can be your go-to for financial advice? Asking about additional services lets you see what an accounting firm has to offer.

You might be surprised by the additional nonprofit accounting services a firm offers, such as:

  • Fractional CFO services
  • Advising on growth strategies
  • Accounting system design
  • Paying vendors
  • Grant management
  • Preparing and filing IRS forms

7. What is Your Approach to Helping Nonprofits Reach Their Financial Goals?

Your mission is the main reason for your nonprofit. That’s why it’s important to work with an accountant who understands how to create a financial plan that aligns with your mission and objective. This ensures each step of your financial plan helps you reach your goals and expand your impact.

nonprofit accountant

Finding the Right Nonprofit Accountant to Reach Your Goals

Searching for a qualified nonprofit accountant can feel like a journey, but finding the right one is worth the time! Asking these seven questions can help you get a better idea of what nonprofit accounting services a firm offers, as well as their experience with nonprofit organizations.

At The Charity CFO, we’re happy to answer any questions you might have about our full-service nonprofit accounting and bookkeeping services. Our team specializes in nonprofit accounting, so you can be sure we understand the unique challenges and regulations that come with nonprofit finances.

Get in touch with us today to learn more about our services!

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How to Fix Your Nonprofit Accounting

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Your nonprofit accounting system might not be the most exciting part of your organization, but it’s one of the most important aspects. An effective accounting system helps you stay in compliance with tax and legal regulations–helping you maintain your exempt status.

However, effective accounting isn’t just about following rules. An effective nonprofit accounting system also helps your organization stay transparent, manage funds wisely, and build trust with donors and the public.

If your organization’s accounting has gotten a little off track, there are things you can do to fix it. Keep reading to learn more.

nonprofit accounting

Take a Close Look at Your Current Accounting Practices

You can’t know what needs fixing in your accounting system until you dive in and examine your current practices. Before you start trying to fix things, consider doing a full review of your accounting system. Taking a close look at your current system helps you identify problem areas in your financial recording methods.

Your analysis should show you where your accounting system is working for your organization and any gaps or areas of concern. For example, you may find that your system is great at recording nonprofit revenue, but lacks an efficient process for categorizing various revenue streams.

Consider making a list of the challenges or issues you find in your accounting system. This list will help you better define how these inaccuracies or incomplete records are affecting your overall accounting strategy.

Get Your Financial Policies and Procedures in Order

Does your organization have written financial policies and procedures in place? Do all of your employees and volunteers know what to do when faced with common financial tasks?

If not, one of the first steps to fixing your nonprofit accounting is setting up these policies.

Having documented financial policies for your nonprofit organization is essential and helps with:

  • Compliance: Documented procedures help your organization maintain accurate records and stay on top of compliance regulations.
  • Accountability: A defined accounting policy makes it easy for anyone in the organization to know what’s going on with funds–which helps build donor and board member trust.
  • Operational Efficiency: Having set financial guidelines makes it easy to track and record financial transactions, improving the overall efficiency of your nonprofit.

To fix your accounting system, you’ll need to create a standardized set of policies and procedures for transactions and reporting. As you create your policies, make sure everything aligns with legal and regulatory requirements.

Focus on Budgeting and Financial Planning

Like standardized financial policies, budgeting is an important aspect of your nonprofit accounting system. Your budget helps you plan out expenses and revenue in advance so you have a better idea of the financial health of your organization. It’s also an important tool for transparency within your nonprofit. A budget shows stakeholders like the board of directors or donors how you’re using funds to advance your mission.

You’ll need to develop a realistic budget for your organization based on real nonprofit needs and goals. The easiest way to create an accurate budget is to use budget tracking based on historical financial data. You’ll use past revenue and expenses to estimate future funding and expense needs.

You should expect your budget to have minor variances from month to month. Try to review your budget every couple of months and make adjustments as needed to meet current financial needs.

Track and Report Donations and Grants

Properly recording and reporting nonprofit revenue should be a top priority in your new accounting system. If you don’t have them in place already, you’ll need to establish protocols for recording donations and grants. Your system should take into account any donor restrictions so you stay in compliance with donor or grant requirements.

You’ll also need to create a reporting system for donations and grants. Generally, organizations that receive funds are expected to report on the use and impact of the funds. Not only does reporting on fund use help you stay in compliance with donor wishes or legal requirements, it’s simply a great way to maintain transparency in your organization and with the public.

Monitor Cash Flow and Financial Health

An organization’s cash flow is often a good indicator of financial health. Regular review of your cash flow statements can help you spot financial problems before they grow into major issues. As you fix your accounting setup, you’ll want to start analyzing financial ratios for liquidity and sustainability. If you find your nonprofit is regularly over budget, it’s probably time to address expenses and revenue.

There are a few strategies to improve your cash flow management, including:

  • Reducing expenses, from cutting back on staff to delaying new programs or services
  • Looking for additional revenue streams, such as new donors or applying for grants
  • Adjusting timelines for accounts receivable invoices
  • Offering new payment options for donations or service fees, such as automatic payments or online payments

nonprofit accounting

Seeking Professional Assistance

Cleaning up a messy accounting system is often a tedious and overwhelming task. Not to mention, most nonprofit leaders have plenty of other things on their plates. Working with a professional accounting firm specializing in nonprofit accounting is a great way to fix your accounting system and save time.

Nonprofit accounting firms have specialized knowledge related to financial management for nonprofits. They know how to navigate the complicated legal landscape surrounding nonprofit accounting, so you can be sure your financial records comply with governing regulations. In addition, a nonprofit accounting team provides financial guidance tailored to your organization to help you use your funds more effectively and efficiently.

The Charity CFO is a nonprofit accounting firm that can help you clean up your current accounting issues and establish a strong accounting system going forward. Our team of nonprofit accounting specialists understands the needs and challenges of nonprofits.

Need help fixing your accounting issues? Contact us today to get started.

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The most effective ways to expand visibility and maintain funding in your business.

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On this week’s episode of A Modern Nonprofit Podcast, CEO Tosha Anderson invites Eric Ressler as her guest. Eric Ressler is the Founder and Creative Director at Cosmic, A Social Impact Creative Agency. Eric Ressler expresses his opinions and expertise about, “The most effective ways to expand visibility and maintain funding in your business.” Why do so many social impact organizations struggle to find, grow, and maintain funding? Eric breaks this question down and gives listeners tips to implement in your own processes. What does the future of social impact fundraising look like? Eric goes into the importance of your digital footprint and doing it in an authentic way. We cover why does social impact organizations invest in their digital strategy and platforms? We also hit on why should social impact organizations concern themselves with their brand when it seems like there are more important things to focus on? Finally why is the overhead percentage the wrong metric for assessing a social impact organization’s effectiveness? This episode is a wonderful conversation and a must listen.

Reach out to Eric Ressler @ [email protected]

Website: designbycosmic.com

6 Factors to Consider When Hiring an Accounting Service for Nonprofits

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Are you a nonprofit organization that’s looking to take back control of your financial situation? Maybe you need help with how to budget for certain aspects of your organization. If so, then you need the help of professional accounting service.

Hiring an accounting service can help you receive the financial advice you need, get accessed to professional bookkeeping, and set up your nonprofit for success moving forward.

However, you want to make sure that you hire the right service for the job. Be sure to see below for several factors you should consider when hiring an accounting service for your nonprofit organization.

1. The Return on Investment

Too many nonprofits make the mistake of either attempting to perform accounting duties themselves or hiring the cheapest service possible to save on price. However, in doing so, you might be setting yourself up for failure in the future.

Your intent should never be to find the cheapest accounting service possible. It should be finding a service that gives you the highest return for your investment.

For example, find an accounting service that can help you just as much with your bookkeeping as it can with fundraising tips to kickstart your 501c3.

Any time that you reach out to an accounting firm, be sure to as about how much they charge and how they charge for their services. Some charge for each service they offer while others charge by the hour of work that those services require.

2. Communication With Their Clients

Hiring an accounting service for your needs isn’t just to perform the service, it’s an opportunity for you to learn! You’ll want to get an in-depth understanding of things like bookkeeping, fundraising, and so on.

To learn as much as you can, you need to find an accounting service that’s willing to teach you, not just perform the service. The more you learn, the better your nonprofit will be for it. 

An experienced accounting service can put complicated accounting aspects into layman’s terms for their clients. They can offer additional information and help give you tips on various aspects of your nonprofit’s costs.

3. Specialization in Nonprofit Accounting

Too many nonprofits make the mistake of hiring a business accounting service that doesn’t have experience working with nonprofits.

While there are a lot of similarities between nonprofits and for-profit businesses, there are also a lot of differences, and accounting is no exception. 

A nonprofit accounting service will have experience working with different programs that your organization is running. They’ll have an in-depth understanding of fundraising and how to maximize the donations that you receive.

They’ll understand the ins and outs of donor restrictions and how to keep your finances in accordance with the donor’s wishes. They’ll also help you delegate all funds you receive that are without restrictions and can be applied anywhere you have a need.

Make sure the accounting service you hire is dedicated to nonprofits. That way, you can ensure they will help you stay on-point with your funding and meet the expectations donors and volunteers have for your brand.

4. Variety of Services

If you’re hiring an accounting service for your nonprofit, then you want to make sure they can help you with several different aspects of your organization.

A reputable service will offer certified public accountants (CPAs) as well as bookkeepers to meet the requirements and requests of your donors. They’ll make it easy to track all the incoming and outgoing money for your nonprofit.

This all starts with the opportunity to reach out to an accounting service and tell them more about some of the accounting needs that you have. From there, they will sit down with you to discuss a game plan.

The plan that you and the accounting service put together will affect the pricing. They can outline the different solutions and services that they offer to meet your needs.

5. Check Online Reviews

For those of you that are planning to outsource your accounting needs, you’ll want to get a peek behind the curtain of what it’s like to work with them. There’s no better way to do that than checking the online reviews of previous and current clients.

They can give you insight into the accounting company’s process, communication, customer service, bookkeeping, and so much more.

Reading through their references and reviews can help you make an informed decision about which company to hire. 

Be sure to ask yourself some questions while you read through the comments. What services did those customers have the company perform? Were they happy with the service? What is the overall consensus of their customer support?

6. Goal-Setting Mindset

Your accounting troubles won’t be solved overnight. Remember, you want to find an accounting firm that helps you over the long haul.

For that reason, you should find a service that helps you set both short-term and long-term goals for your accounting.

You can tell them about your nonprofit’s five-year plan, and they can create an actionable set of goals to help you achieve it. 

“Your accounting troubles won’t be solved overnight. Remember, you want an accounting firm that helps you over the long haul.”

The Charity CFO

Use These Factors When Hiring an Accounting Service

Now that you’ve seen the several different factors that you need to consider when hiring an accounting service, be sure to use them to your advantage. 

Take the time to read this page to learn about how our services can help you with your nonprofit’s accounting and bookkeeping needs.

For more inquiries, please be sure to reach out on our contact us page and we will be happy to assist you further!

Nonprofit Accounting Tips, Tools, & Tricks Your Organization Needs to Know

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When people think about the nonprofit world, they often think about the work they do to help others. Their mission and impact come to mind, but the way they’re actually run rarely comes up. 

A nonprofit may not make money the way a traditional business does, but money still plays a significant role in the nonprofit world. Donations need to be made, some employees may need compensation, and the books need to be balanced.

Proper accounting is important for the longevity of any organization, but luckily, it’s easy to handle with the right background.

If you want to learn the best way to handle finances in the nonprofit world, you’ve come to the right place. Keep reading to learn some simple accounting tips and tricks that can help you in the long run.

The Simple Guide to Nonprofit Accounting 

A financially healthy nonprofit is one that has the right accounting setup. 

If you want to know how to handle accounting at your nonprofit, make sure you pay close attention to the tips in this post.

Understand the Law

Accountants that don’t understand IRS tax law could be losing the organization thousands in exemptions and filings. 

If you want to handle accounting right at a nonprofit, you need to understand the differences between managing money for a regular business and a nonprofit organization. 

The IRS has a comprehensive and free resource guide that nonprofits can use to educate themselves on the ins and outs of handling finances for their organization. 

Everyone on your finance team should be familiar with tax guidelines. Even if they aren’t necessarily handling filing your taxes, encourage them to take advantage of the IRS’ free courses. 

Have a Solid Budget

A budget is important for any business or nonprofit organization. It’ll help you set goals for the coming year, and ensure that you’re operating your business in the most financially healthy way possible.

A realistic operating budget is the first step to handling accounting the right way in your organization.

Keep in mind that an ideal budget should be able to evolve throughout the year. Money from donors can ebb and flow depending on the time of year and market forces that are out of your control. 

Think about the best and worst times to limit expenses. There are some times of the year where you can expect a lot of cash flow like the holidays, and other times where you’ll have to be leaner.

It’s also important to make sure that your board members understand and approve the budget. 

We all know how important the siting board is in a nonprofit organization. If they understand the rationale behind why you’re setting certain expectations and limits, they’ll be able to better understand upcoming initiatives and support them.

Have Several Checks and Balances 

Fraud can occur in any organization, but frauds for nonprofits and charities can be absolutely devastating.

Aside from taking money from an important cause, it can also undermine people’s faith in your organization. They may think that their money isn’t being spent correctly, and you could see your donations quickly dry up.

One of the best ways to protect against fraud and to keep your accounting books balanced is to have plenty of eyes on the numbers. This means creating a series of checks and balances to ensure that everything literally adds up. 

Never have one person only handle financial matters in your organization. Always have someone else that can double-check their work and make sure that their numbers, bank deposits, and projections make sense. 

Having a professional with no financial stake in your nonprofit can be a great way to keep things balanced. Some nonprofits go the extra mile to bring in an external accounting consultant during tax time or when they’re planning budgets. 

Get Software

Getting solid accounting software is one of the best things a nonprofit can do. Software doesn’t just make it easy to track expenses, it also gives everyone the opportunity to access important financial information. 

Take time to think about the kind of software you want. Some accounting software can come with special features like payroll and benefits tracking help. Others can hone in on specific nonprofit areas like fundraising and donations.

The Nonprofit Plus Account Suite is one of the highest-rated niche accounting software packages you can use.

Aside from this software being specially designed for non-profits, it can help you handle nearly every financial aspect of your business. You can manage donations, handle employee payroll, and use its stellar forecasting capabilities. 

Stay in the Loop 

Do you know whenever someone in the marketing/communications department goes to an event and charges their Uber to the company card? Could you easily find receipts from operations during their last office supply shopping trip?

Having a deep understanding of what’s happening in every department is critical for the financial success of every nonprofit.

You won’t be able to read people’s minds or be around for every purchase. That’s why it’s important to create simple systems for people to report expenses and keep key people informed about purchases. 

This is where having solid software can come in handy. A software system that makes it easy for people to report their expenses and easily track spending can save people in accounting a lot of time and stress.

Start off by training people in other departments the right way to keep you informed about expenses. Let them know that reporting small expenses and big purchases are equally important.

Get Help 

We covered a lot of ways to handle nonprofit accounting in this post, but there’s one surefire thing that will always be helpful for nonprofits: hiring the right people to handle accounting. 

If you’re in need of experts that can manage your accounting needs, we’re here to help.

We offer services that can cover every financial aspect of running a nonprofit. Be sure to contact us today so we can talk about the best way to handle your accounting and finance needs.