Bookkeeping & Financial Services for Non-Profit Organizations

Fortunately, many software companies offer free trials of their products. However, quality software can be expensive, and nonprofits often have limited budgets. With so many different options on the market, it can be difficult to know where to start. You don’t want your accounting how is sales tax calculated process to be a source of stress for you or your staff.

Best for Volunteer-Run Nonprofits

Nonprofit cash flow statements will refer to “change in net assets” instead of “net income,” and will sometimes list cash flows that are restricted to certain uses. The solution you decide on should also allow you to do some form of fund accounting. This means instead of piling your money into one big “cash” account, you’ll need to distinguish between and track separate buckets of money. Think about your budget like a roadmap to where you’ll spend your money. You have to know the area to plan a route, and the same can be said about your nonprofit’s budget. Accurate and timely bookkeeping practices will make the job of those tasked with budgeting much easier to tackle.

Accounting Services

Bank reconciliation is the process of ensuring an organization’s records (balance sheet, general ledger account, cash flow, etc.) are accurate. A nonprofit reconciles bank accounts by comparing the recorded amounts to the amounts on bank statements. Most nonprofit-friendly accounting software like QuickBooks Aplos or Nonprofit Treasurer will allow you to generate financial statements automatically. Although it’s possible to manually generate financial statements from your ledger or spreadsheet, it takes a ton of accounting knowledge and time to do it right.

Consider your budget.

Just because your nonprofit qualifies as tax-exempt under Section 501 doesn’t mean that all of your donors’ contributions qualify as charitable deductions. And it doesn’t mean that all of the activities your nonprofit spends money on aren’t taxable. Tax-exempt nonprofit employees are still subject to employment taxes, and your nonprofit could still be subject to sales, real estate and other taxes depending on which state it’s based in. Unrestricted net assets are any funds your nonprofit has received from donors that have no rules or conditions attached to them, like a pure cash donation. Learn how to build, read, and use financial statements for your business so you can make more informed decisions. The more transactions your nonprofit makes, the more often you should reconcile your bank statements.

Because of this, the IRS requires that you obtain nonprofit status from your state before applying for tax-exempt status. For the most part, nonprofits can apply to the IRS to become exempt from federal taxes under Section 501. For more information about how to create a budget, check out the National Council of Nonprofits guide to Budgeting for Nonprofits. If the value of the donation is small (below $5,000) the IRS will let you determine a donation’s fair market value yourself, usually based how much comparable goods and services are selling on the market. If the value of the donation is over $5,000, you should get the donation formally appraised by an expert. Once your vendor signs it, it’s a binding contract that tells you exactly how much you ordered from your supplier, how much you paid, and when the supplier agreed to deliver your order.

We’ll help you modernize your nonprofit accounting & bookkeeping systems to get consistent and accurate reports. And we’ll show you how to use those reports to make smarter decisions for your organization. Bookkeeping is the day to day processing of your transactions – getting the information into Quickbooks Online or a similar accounting software.

But when you’re trying to paste together your numbers with a part-time bookkeeper or a volunteer accountant, it’s nearly impossible to get the transparency you need to run your nonprofit organization. We’ll dig into your current processes and accounting structure and help you find new tools or reports that make your life easier. And we’ll implement solutions that are supported by the best technology, highly efficient, and 100% compliant with nonprofit best practices. Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.

Valuable Nonprofit Accounting and Finance Content Sent Right to Your Inbox

• When you walk alongside The Charity CFO, you pay just a flat fee every month for everything from bookkeeping to financial reporting to expert advice.
• The cost of an in-house nonprofit CFO (or even a phone call to your nonprofit CPA) can feel like an unnecessary expense.
• The nonprofit accounting software from NetSuite is an essential tool for nonprofit organizations.
• You should also hire a financial officer or a treasurer who knows how to do bookkeeping for a nonprofit and is familiar with specialized accounting software.
• We collaborate with you to provide a customized solution that is not only cost-effective but also strengthens your accounting function.
• In addition, QuickBooks Enterprise is also scalable, so it can grow with your nonprofit as your organization expands.
• All Xero plans offer reporting, payment acceptance, file storage, contact management, tax calculations and the ability to connect Xero to a bank account.

Sage Intacct is best for global nonprofits that must work across currencies and tax codes to manage their financials. Quicken is best for very small nonprofits that do not have employees for whom they have to process payroll. The entry should contain information such as the donor’s name, the amount of money, and the date. Fortunately, nonprofit professionals don’t have to worry about your financial information if you choose FreshBooks.

Best for Tailored Accounting Software

If you’re trying to balance a nonprofit budget on, well, a budget, Xero, Zoho Books, and FreshBooks are cheaper options, and Wave Accounting bookkeeping services for non profit organizations is completely free. Virtual outsourced accounting is a specialized service that provides one or multiple accounting functions to your organization. Chazin & Company can work with you as your entire accounting department or to support your current in-house department.