Nonprofit Accounting & Financial Statements

Experienced financial experts will help you maximize your budget so that you can make the largest impact on your community without breaking the bank. Because nonprofits don’t pay federal taxes, they don’t need to be audited to ensure they’re providing the government with the proper amount of funding. Rather, nonprofits are audited to ensure their internal controls are up-to-scratch and sometimes to confirm they’re using funds appropriately. These reports are one of the major reasons that it’s important for your organization to leverage effective software. The right accounting software that’s specifically designed for nonprofit organizations allows you to pull the proper version of these documents rather than trying to make do with the for-profit versions.

MIP® true fund accounting is purpose-built for nonprofit organizations and government entities. Say goodbye to using cobbled-together, disparate systems or unreliable workarounds to stay compliant or within controls. As your funding sources grow in complexity, your fund accounting, human resource management, and payroll needs will change as well. MIP grows with you and is configured to the unique needs of your organization. Our clients are provided a deeply-discounted subscription to the leading, cloud-based accounting software platform available, Quickbooks Online. You’ll have secure, 24/7 access to your books and records, from anywhere you have a broadband connection.

Best Practices for Nonprofit Accounting

Any connections between you, your bank accounts, and Wave are protected by 256-bit SSL encryption. We’ll work with you to set up your QBO and adapt it to the unique needs of your nonprofit. nonprofit accounting Academy has been an integral part of our team. We have relied on thier expertise and guidance to make informed decisions about our financial structure and growth. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

The default version is only available via desktop, so employees cannot access it remotely. If you want to add cloud-based access, you’ll need to pay an additional fee for hosting for each user that will be using the program. For example, the cost for two users to remotely access the Diamond plan is $3,572.40. QuickBooks Enterprise Nonprofit is issued by Intuit, the financial services and tax software company. Since its launch, it has become a household name, earning over $7.7 billion in revenue in 2020.

Accounts Payable

Like the statement of financial position, you must report revenues with or without donor restrictions. You can use QuickBooks Enterprise Nonprofit to track expenses and donations, budget by program and compare to actuals, and create donor and grant reports. This version of QuickBooks allows you to accept donations and securely store donor information in your database. If you upgrade to the Gold, Platinum, or Diamond plans, you can even get payroll services for your organization and pay your staff directly through QuickBooks. For example, if a donor restricts their donation to ensure it’s only used to fund that organization’s scholarship fund, that money would be added to a restricted fund set aside for the scholarship. If a donor does not restrict the donations they provide, that money can be added to your organization’s annual fund and used for overhead, programs, or any other expenses. Choosing the best outsourced nonprofit accounting firm for your nonprofit is an important step for ensuring that your nonprofit’s finances are safe and well-managed.

• Nonprofits run the risk of fraudulent activity if they don’t carefully manage bookkeeping and accounting.
• Volunteers, for example, may provide unpaid labor, but that labor still has value that can affect your taxes and overhead.
• This nonprofit accounting statement breaks down the operating, financing, and investing activities to show how cash moves at the organization.
• For-profits don’t usually have restrictions placed on many of their funds.
• This is essentially the nonprofit accounting version of the balance sheet equation.
• Moreover, these accountants need to uphold the ethical values and code of conduct outlined by the American Institute of Certified Public Accountants .
• We’re here to help you with your nonprofit financial management journey.

You can choose a cash-basis or an accrual accounting system for nonprofit organization. With Sumac’s fundraising program, staff can access critical data from anywhere, and they can view databases at the same time, so they always have the most up-to-date information. The program allows you to create customizable donor profiles so you can adjust fields to meet your organization’s needs.