There is a set of reports required by GAAP (generally accepted accounting principles) that are standard components of an audit. These are the Statement of Financial Position, the Statement of Activities, the Statement of Functional Expenses, and the Statement of Cash Flows. (See links below.) Between audits, an organization produces interim reports internally, which can be formatted a little differently while still tracking data that will comply with GAAP requirements. These reports serve various management purposes.
According to much research, about 65% of the general population are visual learners, and providing visuals along with data improves both comprehension and retention. So, adding a dashboard or snapshot summary as the cover page for the more detailed financial report packet, featuring charts and graphs showing trends and comparatives, is likely to enhance understanding among your board members and other key stakeholders of your organization’s financial data.
Liability accounts reflect what you owe to others and what you hold on others’ behalf. For small and midsize nonprofits without overly complex systems, 4-digit account numbers are usually adequate. Longer numbers can certainly be used, but that requires more keystrokes and may be harder to remember. Liability account numbering usually begins with 2.
Assets accounts reflect what you have (cash, investments, fixed assets), what others might owe to you (receivables, deposits), or what you might have invested for the future (prepaids, inventories). For small and midsize nonprofits without overly complex systems, 4-digit account numbers are usually adequate. Longer numbers can certainly be used, but that requires more keystrokes and may be harder to remember. Assets account numbering usually begins with 1.
An all-volunteer national advocacy effort to increase financial sustainability among nonprofits through building and maintaining operating reserve funds.
Mission
To define, promote, and facilitate the practice of building and maintaining operating reserves throughout the nonprofit sector as a key strategy toward ensuring the long-term sustainability of the organizations and programs that save and enhance our lives.
