When you started your non-profit organization your zeal for ‘the cause’ may have outweighed the headaches associated with administrative and bookkeeping tasks that are crucial for your organization to function optimally. Many executive directors and board members are not trained accountants and may not know where to begin with sorting out their finances and budgets. Non-profit accounting is also very different from for-profit accounting, but if you set the following 6 basic structures in place, it will be a great start to running your non-profit accounting system successfully.
6 basics for non-profit accounting
- Find a good non-profit accounting/bookkeeping solution
- Get an accounting solution that can do fund accounting
- Find a method to create and analyze financial statements
- You will need a way to record in-kind donations
- Open a separate bank account for your non-profit
- Start with bank reconciliation and set up some budgets
Bookkeeping for non-profits
You will need to appoint a treasurer or financial officer to keep track of your organization’s financial records. Your treasurer will need a good bookkeeping system and invest in some non-profit friendly accounting software. Here at Georgen Scarborough we use Quickbooks Non-Profit Edition. This will make your treasurers’ life that much easier in keeping track of your organization’s finances.
A budget is vital to make sure that your non-profit is on the right track financially. Budgets usually cover one fiscal year and have 2 main categories: Expected income and expected expenses. Creating a budget is easy if you keep in mind the following 4 steps:
- Set goals – assess what you want your non-profit to achieve in the year ahead
- Develop doable estimates for how much money it will cost to realistically achieve these goals
- Estimate your income sources for the year
- Alter budget to align expectations with reality
Your non-profit friendly accounting software should ultimately allow you to track how your income and spending for the year align with your annual budget goals.
Whether you are a new non-profit organization or not, let Georgen Scarborough Associates take the headache out of administrative tasks. For more information on accounting services for your non-profit get in touch with accounting company George Scarborough Associates today.