Since nonprofit organizations operate differently than other businesses, accounting for a nonprofit organization can be complex. That’s why working with a CPA with nonprofit experience is a big benefit. Fortunately, with the right accounting practices and organization, you can feel confident with complete compliance and transparency when it comes to your nonprofit’s finances. It’s irresponsible and it’s a violation of your legal obligation as an officer or director of the board. You simply must have accurate accounting records, so plan for it from day one.

How does accounting software work?

• Additionally, Sage Intacct’s real-time reporting tools provide critical insights for effective program and resource planning.
• It is the role of a nonprofit bookkeeper to record revenue and expenses.
• When you walk alongside The Charity CFO, you pay just a flat fee every month for everything from bookkeeping to financial reporting to expert advice.
• In-kind donations require special handling in nonprofit accounting systems.

Additionally, Sage Intacct’s real-time reporting tools provide critical insights for effective program and resource planning. For larger needs, we recommend the Advanced plan, accommodating more than five users. Some of the accounting software options would be more suitable for smaller organizations and others for large-scale nonprofits with more complex needs. Accurate records of donor activity makes is much easier to solicit future contributions from your supporters. And, as we have discussed in other articles, building a fan-base of consistent givers is fundamental to your nonprofit’s financial health. Both state and federal regulations require that the financial records of your nonprofit be complete, accurate, and consistent with Generally Accepted Accounting Principles, or GAAP.

Step 10: Ensure Compliance with Nonprofit Accounting Standards

Their meticulous record-keeping and analytical skills support accurate reporting, informed decision-making, and compliance with nonprofit regulations. Nonprofits should provide transparency to stakeholders by publishing their financial statements, annual reports, and audited financial statements on their websites or other accessible platforms. Open communication https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ regarding financial information builds trust among donors, beneficiaries, and the public. Nonprofits should maintain complete and accurate financial records, including receipts, invoices, bank statements, and other supporting documents.

Gather statements

As mentioned previously, the best way to ensure your nonprofit’s finances are tracked and reported properly is to work with an accountant. To effectively track all of your nonprofit’s revenue streams, expenses, and restricted funds, you’ll need the right tools. While many organizations start out managing their finances in a spreadsheet, a specialized accounting platform will become necessary as your nonprofit grows. Nonprofit accounting involves closely monitoring the financial activities and progress of organizations operating for societal benefit rather than profit. Organizing and maintaining receipts is essential for transparent and accurate financial reporting and ensures you’re audit-ready. Bookkeeping for nonprofit organizations mandates diligent recording of all payments and bank transfers to ensure every dollar’s journey aligns with your mission.

In effect, it shows the amount of money a firm has left over after deducting the explicit costs of running the business. When compared to Aplos, our top pick, Wave serves well for fundamental accounting needs at no accounting services for nonprofit organizations cost, but lacks the specialized features for nonprofits that Aplos provides. In our experience, the Plus plan of QuickBooks Online is advantageous, offering features like location and class tracking, which are essential for segregating activities by fund and program service.