One of the fundamental decisions a nonprofit organization needs to make is whether to use the cash or accrual accounting method. The method you select will determine how you classify, record, and report on your income and expenses. What is the cash method of accounting? Under the cash method of accounting (cash-basis accounting), revenue is…
For Nonprofit Boards, Numbers Are a Necessity As a board member for a nonprofit, you’re expected to attend board meetings, oversee fundraising and management, prepare reports, and help the organization determine its strategic direction. You’re also expected—and, indeed, compelled by law—to oversee the organization’s finances. Every state has unique laws governing what board members must…
Will you be ready for your next audit? If your answer is “no” or “I don’t know,” you need a provided by client (PBC) checklist. What is a PBC? A PBC checklist is a list of all documentation, spreadsheets, and schedules that your auditing firm expects your organization to provide as part of your annual…
3 Keys to Being Prepared for Your Next Nonprofit Audit For many nonprofits, going through an annual audit is like undergoing a root canal—it’s a painful, stressful, and expensive experience. The good news is that it doesn’t have to be that way (the audit, that is.) Through advance planning, organization and knowledge of the audit…
What’s So Different About Nonprofit Accounting? If you’ve never worked in the nonprofit environment, you might assume that the accounting is fairly simple and straightforward. In actuality, proper accounting for a nonprofit is much more complex than accounting for a for-profit business. Why? For starters, most nonprofits operate on an accrual, not cash, basis. This…
4 Tips to Help Nonprofits Find the Right Accounting Partner For nonprofits, outsourcing accounting functions is a big deal. And just as you wouldn’t choose a new tax preparer or investment manager for yourself without doing some research, you’ll need to do your homework to find the right accounting firm to meet your nonprofit’s needs….
Rare is the nonprofit that looks forward to finance and accounting tasks, from bookkeeping to budget reviews and reporting. At a minimum, such tasks are a headache, and sometimes—as when an audit takes place—they become the bane of many executives’ existence. The difficulty of managing finances internally is one of many reasons nonprofits are increasingly…