While the challenges of establishing and maintaining proper accounting and bookkeeping procedures can be a major challenge for for-profit corporations, the difficulty non-profits face with these operation-critical tasks is much greater.
The federal and state requirements of accounting for the various income streams (grants, donations, etc.) can leave those without the proper training in a legal quagmire. Considering that the vast majority of America’s non-profit agencies have fewer than 10 people on staff, it is highly unlikely that most possess the organic knowledge in-house to adhere to the differing nonprofit accounting/bookkeeping best practices, GAAP procedures and tracking methodologies.
If this is true of your non-profit agency, here are a few Nonprofit Accounting Bookkeeping options you might want to consider:
Working within the confines of the typically minimal non-profit startup budget, it is often best to just hire a professional services firm to handle your books. Ideally, you’ll want to find an accounting firm that also offers bookkeeping services so they can handle your entire financial management system. This is because accountants set up bookkeeping systems, monitoring and managing the information it produces, while bookkeepers perform the critical day-to-day tracking and journaling tasks that ultimately provide your organization with the helpful operations information used by accountants. So, for a complete solution, you need to partner with a company that understands and has the capacity to provide both, according to accepted nonprofit accounting/bookkeeping best practices.
Alternately, you might want to seek out a shared service solution. Shared services firms offer ala carte accounting and bookkeeping assistance specifically designed to meet the needs of your non-profit agency. Their services range from working closely with your in-house staff on the one side to providing all accounting services on the other side. By sharing the skills and experience of one of these unique consulting firms with other non-profit clients, you are able to find an accounting-bookkeeping solution that fits your growing needs.
If you can’t find or would rather not use a qualified accountant or bookkeeping firm, you might want to hire an accounting/bookkeeping training company to bring your organization up to speed. There are a few best practices when it comes to using outside professional training. First, it is recommended that the training firm you select specializes in educating on the unique challenges of non-profit accounting and bookkeeping processes. Second, it is a good idea to have more than one key person sit for the training. Third, weigh carefully the realistic capacity of your current staff to assume these focused responsibilities. If you follow these 3 suggestions, you are more than likely on the right path.
While some non-profits in the past have tried utilizing the skills of volunteers for their accounting and bookkeeping needs, they have found the prospect to be unreliable at best. Volunteers can be a valuable asset to your non-profit organization, but shouldn’t be relied upon for something as mission-sensitive as accounting and bookkeeping.
Regardless of your opinion toward accounting and financial management, compliance will determine your success or failure as an organization. Invest wisely in this all-important operation system and you’re that much more likely to enjoy the benefits of better information and decision-making abilities.
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