Running a non-profit organization takes plenty of hard work and careful attention to detail. Reaching your goals and creating positive change is only possible through efficient spending and saving. As a non-profit, there are certain standards you must adhere to, meaning you need to make sure your accounting and bookkeeping are being done properly. From preparing for audits to tracking yearly progress, developing some basic financing skills will ensure your organization is able to achieve its mission. Here are some tips regarding non-profit bookkeeping and accounting for dummies and how they can benefit your organization.
There are many financial components to a non-profit organization, making it difficult to keep track of all the grants, funds and expenses that are generated. It’s imperative that you keep financial records of all transactions, tax returns and legal filings associated with your organization. Keeping important documents in a secure, organized space will save you precious time and money in the long run. In the event of an audit, you’ll be well prepared to locate the proper documentation while avoiding major headaches down the road.
Know the Standards
It makes sense that a non-profit organization would have different rules and standards regarding accounting procedures than for-profit organizations, so you need to follow Generally Accepted Accounting Principles (GAAP) in order to ensure your organization is operating legitimately. From depreciating assets to modified cash accounting, you’ll need to acquire some basic bookkeeping skills so that you’re not at risk for legal complications.
Establish Budgeting Goals
At the start of each year, you should be creating and tracking financial goals that you want your organization to achieve. Mapping out your budget will help you establish realistic goals. This includes putting together a cash flow statement as well as a capital budget. Make sure you’re able to go back to your yearly goals on a regular basis to ensure you’re staying on track.
Assemble a Team
Let’s be real; trying to manage all of the accounting and bookkeeping responsibilities for your non-profit alone is likely not doable. Whether you train employees in-house or decide to outsource the work, assemble a team of specialists that can dedicate their time towards keeping an eye on the organization’s finances. Non-profit bookkeeping and accounting for dummies starts with accepting the fact that you’ll need help in order to achieve your mission. Make sure you place your work in the hands of reliable, proven professionals who can provide you with answers and support when needed.