Nonprofit Accounting Basics

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Should I Use Accounting Software?

Deciding whether to use an accounting software is a matter of personal preference and the needs of management.

Reconciling Your Bank Accounts

Reconciling Your Bank Account(s)

Accounts Receivable

Accounts receivable (AR) is an asset account found on the Balance Sheet or Statement of Financial Position that represents money due to the organization from another party.

Petty Cash

Petty cash is a small amount of cash kept on hand to pay for incidental expenses such as cab fare or postage, where it is not convenient to use a check or credit card.

Payroll

Payroll includes many components in addition to the wages paid to employees.

Line of Credit

Similar to a personal credit card, a line of credit (LOC) is a pre-set credit limit approved by a bank or another financial institution.

Payroll Expenses

  • The initial information for each employee and every change impacting payroll (terminations, overtime, compensation changes, employee deductions, etc.) will be in writing and appropriatel

Allocating Expenses

Expenses are allocated to show the total cost of activities, services, and projects.  It is very important for the board and management to know the total costs of activities, s

Other Issues

Grant Funding

Grant funding may require accounting and compliance different from normal nonprofit operations.

Financial Reporting

  • All financial reports are based on the general ledger.  Adjustments and estimates modifying the information from the general ledger will be documented.
  • Review i