A New Audit Standard Affects Me??? Really?

Many nonprofits are subject to annual audits. Although they can be challenging, they are often required for one or more reasons. A byproduct of that requirement is that audit standards can and do change and those changes can and do impact your organization. This year is no different. A new “Statement on Auditing Standards (SAS)”…

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Creating Good Accounting Habits Is Important for New and Smaller Nonprofits

Leaders of nonprofits that are just getting started, or are relatively small, are generally focused on getting their organization up and running, raising money, and delivering on their mission. That’s to be expected. Properly tracking the financial activity of the nonprofit, and installing best practices, does not tend to receive the attention it deserves early on. There are accounting rules that…

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How to Review Financial Reports: A Guide for Nonprofit Boards (Part 1 of 3)

One of the most important duties as a member of a nonprofit’s Board of Directors is the stewardship of the organization’s financial resources. Board members play a pivotal role in monitoring the financial health of the organization. In fact, it is the fiduciary responsibility of the Board to do so. One of the ways the Board achieves this is by regularly reviewing several different financial reports. These financial documents…

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The Difference Between an Audit Committee and a Finance Committee and Why a Nonprofit Needs Both

For nonprofits, deciding on a board committee structure can be a challenge. Often, the decision is solely based on the number of board members and their talents and expertise. Proper financial oversight, however, is important to the success of a nonprofit because it ensures that the organization is in compliance with applicable laws, is acting…

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The Importance of Investment Policies

5 Steps for Nonprofits to Develop a Wise Investment Policy Nonprofit boards have a fiduciary responsibility to protect the organization’s assets and ensure that they’re used to further the mission.  Often, an important part of the board’s responsibility is deciding how to invest the nonprofit’s cash. That requires implementing a sound investment policy that balances…

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The Importance of Reserve Policies

5 Keys to Develop Your Operating Reserve Policy Every nonprofit needs to have sufficient cash flow to meet obligations. Setting aside an operating reserve is a smart practice as it provides a cushion against unexpected events that could temporarily impact the cash flow. Following are five best practices to follow when establishing your operating reserve…

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What’s So Different About Nonprofit Accounting?

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…

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