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Bookkeeping Essentials For Non-profit Organizations That You Must Know
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There comes a point for executives at a high level when they shift, or get involved in a non-profit organization. If you are going through the same situation, you need to understand the similarities and differences between for-profit and nonprofit sector. Every organization has its own set of financial requirements. As nonprofits function on a tight budget, buying an accounting software to manage cash-flow is not always within reach. Cloud computing provides an ingenious alternative, hosting QuickBooks remotely. By hosting QuickBooks on a Server, you get a reliable accounting software with cloud benefits minus the hassle of maintaining technical equipment.
Nonprofits focus on demonstrating the organization’s charitable purposes through their use of finances. They have different requirements and terminologies. For example; they have donors and volunteers instead of customers and sales. Most leaders are busy throughout the year in generating revenues and serving their mission of helping people, they may not be able to pay much attention to financial records and bookkeeping. But when it is time for the annual audit, they will have to pause their efforts and work on audit-books. Here are a few bookkeeping essentials that you must know.
1. Accounting Standards to be Followed
This may seem obvious, but you might be surprised to know that many organizations do not strictly follow current accounting industry standards. The American Institute of Certified Public Accountants (AICPA) and the Financial Accounting Standards Board (FASB) outline some generally accepted accounting principles (GAAP) for nonprofits and serve as reliable, up-to-date resources for non- and for-profit businesses and organizations.
2. Keeping Track of All Contributions
It is not unusual for a nonprofit to receive donations in the form of goods and services. Keeping track of all grants made, whether monetary or in-kind is essential. Some businesses or foundations match contributions made by their employees or their subsidiaries with grants. These kinds of donations also must be tracked by the nonprofit for the application of matching funds.
3. Accurate and Up-to-date Financial Reports
Compiling all your financial data in the year-end is not a healthy practice. One should keep a few hours aside every week for this task. Every nonprofit organization should have an annual budget and as its leader, you should know where and how the money is being spent. Nonprofit bookkeeping profit & loss statements also play a major role in helping leaders understand profit within programs, as well as to make informed decisions about fundraising and spending needs.
Cloud hosting of QuickBooks is a great way to enjoy the benefits of the famous software. QuickBooks is widely used across the globe by businesses of all kinds and sizes to streamline their accounting practice. It offers a perfect, user-friendly interface for working, it is easily customizable and has evolved as a brilliant tool to uplift the overall performance and efficiency of organizations.
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