Important Rules for Non-Profit Accounting
In every business vertical, there are rules of operation for success and compliance. Whether those rules are unspoken or written down in black and white, keeping within these common-sense boundaries can make or break your operation.
When it comes to non-profit accounting, you may have more to consider than many other businesses. The rules below will get you started with some essentials for the accounting process:
Keep Your Yearly Audit in Mind
A year can go by in a snap, especially when you’re in the middle of a big project. Before you know it, your yearly audit will be right around the corner. You won’t have to panic if you’ve completed your routine financial management tasks with the audit in mind throughout the year. Make sure you have all of the information you know you’re going to need, easily accessible in an accounting program or provided by a third party professional. Mistakes can cost you in any business environment, but the stakes can be particularly high for a non-profit and the rules governing their business entity.
Manage Your Reporting Processes
Routine financial reports are the preventive health snapshot of your company. They can tell you where money is going and where it’s coming from in the form of grants or awards. They can also give you an idea of where to increase efficiency to reduce spending where necessary. When you have key reports to refer to, data management becomes less intimidating and you can more easily achieve granular analysis. You can set reports to run automatically in certain software or utilize the expertise of an accounting professional to crunch those numbers for you.
Take Fraud Management Seriously
It can be all too easy to lose track of money at a busy nonprofit, especially when you’re focused on fundraising and earning important grants. But if you aren’t paying attention, this becomes a window of opportunity for a less-than-ethical third-party to misappropriate funds. Track all bank accounts and cards closely and reconcile bank accounts on a routine basis. This way, you can easily spot inconsistencies and pinpoint where the fraudulent action emanated. Institutions who keep a close eye on their accounts are more prepared to handle routine problems.
Ask for Help Before You Need it
Even with some common sense financial management and monitoring, accounting for non-profits can quickly become confusing and intimidating. It’s important to know when it’s time to call in the professionals, and the right time is usually before a problem becomes serious. Before you start to feel underwater, reach out to a professional accountant with experience working for non-profits. Their backgrounds can help you avoid common pitfalls and take the stress out of important accounting processes.
If you have questions about not-for-profit accounting, call the professionals at Vitale & Company for a consultation. We help you navigate through commonly asked questions and provide the wisdom you need to keep your focus on running your organization.
Vitale & Company, LLC | 07/13/2018