F IVE  

ACCOUNT ING

T IPS FOR

NON -PROF I TS

GURUPANDYAR .ORG

L IKE PR IVATE SECTOR FOR PROF IT COMPANIES ,

NONPROF IT ORGANIZAT IONS NEED TO KEEP TRACK OF

THE IR F INANC IAL RECORDS . IN ORDER TO BEST KEEP

TRACK OF THE ORGANIZAT IONS ’ F INANCES , I T WILL BE

VERY IMPORTANT TO FOLLOW A NUMBER OF STEPS .

WITH THE PROPER ACCOUNT ING PRACT ICES ,

NONPROF IT ORGANIZAT IONS WILL BE IN POS IT ION TO

STAY F INANC IALLY SOLVENT . THEY WILL ALSO BE ABLE

TO ENSURE THAT THEY ARE COMPL IANT WITH

GOVERNMENT REGULAT IONS AS WELL . IN ORDER TO

BEST KEEP TRACK OF THE IR F INANCES , NOT FOR

PROF IT ORGANIZAT IONS WILL WANT TO FOLLOW SOME

T IPS .

GURUPANDYAR .ORG

T IPS FOR NON -PROF I TS

GURUPANDYAR .ORG

The first accounting tip for nonprofits is to use a

bookkeeping system that works best for them. There are

two main types of bookkeeping methods that nonprofits

need to keep in mind. First, there is single entry

bookkeeping which entails entering income and expenses.

It is the most simple financial recordkeeping system and is

ideal for those with little to no accounting experience.

Nonprofits can also use double entry bookkeeping which

consists of entering transactions as both a debit and a

credit. For every debit, there must be a credit transaction

that offsets it. With the proper bookkeeping system, not for

profit organizations can keep better records of their

finances.

T IP # 1

ANOTHER T IP FOR NOT FOR PROF IT ORGANIZAT IONS I S

TO USE SPEC IF IC SOFTWARE . THERE ARE A NUMBER

OF DIFFERENT SOFTWARE PACKAGES THAT ALLOW

ORGANIZAT IONS TO RECORD F INANCES . FOR A

NONPROF IT , I T I S A GOOD IDEA TO USE SOFTWARE

THAT SPEC IAL IZES IN NONPROF IT ORGANIZAT IONS .

SOFTWARE PACKAGES SUCH AS QUICKBOOKS OFFER A

NOT FOR PROF IT F INANC IAL MANAGEMENT SOFTWARE

OPT ION FOR ORGANIZAT IONS TO PURCHASE . AS A

RESULT , THESE ORGANIZAT IONS CAN GET THE R IGHT

SOFTWARE THEY NEED .

GURUPANDYAR .ORG

T IP   #2

GURUPANDYAR .ORG

Not for profit organizations can also use

spreadsheet software. Using this type of

software enables them to have more control

over their transactions. They can use a

number of formulas to make calculations as

well as organize financial information. The

spreadsheets will provide organizations

with another way to keep very accurate

financial records.

T IP #3

ANY NONPROF IT ORGANIZAT ION THAT

OPERATES WILL NEED TO LOOK INTO POSS IBLE

TAX ADVANTAGES . FORTUNATELY FOR THESE

PART ICULAR ORGANIZAT IONS , THERE ARE A

NUMBER OF TAX INCENT IVES THAT CAN BE

USED TO HELP SAVE MONEY . TAK ING

ADVANTAGE OF TAX BREAKS WILL HELP THE

NONPROF IT ORGANIZAT ION KEEP MORE FUNDS

SO THAT THEY HAVE THE RESOURCES TO MEET

THE IR OBJECT IVES .

GURUPANDYAR .ORG

T IP   #4

GURUPANDYAR .ORG

As well as using a bookkeeping system and using tax advantages,

nonprofit organizations will need to have a good understanding

of their finances. Therefore, it will be important for these

organizations to put together financial statements. With these

particular documents, the nonprofit organization can find out

things such as their net worth as well as if they have a surplus or

deficiency. On documents such as a balance sheet, not for profit

organizations will be able to determine how much they have in

assets and liabilities. This will help them know more about the

amount of financial resources they have available. An income

statement will help them find out how much funds they are

making and how much they are spending. This will help a

nonprofit determine whether or not they are financially solvent.

T IP #5

THANKS FOR

YOUR T IME !

GURUPANDYAR .ORG