Bookkeeping for Non profit organizations
Monthly Bookkeeping, Payroll, Financial Statements or Tax returns for Non-governmental organizations (NGOs) and Social welfare organizations
Business Tax return filing by Certified
CPA / Enrolled Agent
(Starts at $350)
From houses of worship to youth associations to neighborhood assemblies of business, not-for-profit associations make our groups more bearable spots.
Not-for-profit organizations do not have business proprietors and thus, they depend on reserves from commitments, participation contributions, program incomes, money-raising occasions, open and private awards, and venture salaries.
Are you a part of a non-profit organization and struggling with your bookkeeping and accounting? You’re not alone. Managing finances for non-profits can be challenging, but it’s crucial to keep track of funds accurately to ensure the smooth functioning of operations in the long run.
For non-profit organizations, bookkeeping and accounting are essential in order to maintain accountability and financial transparency. Non-profit organizations are required to submit financial reports to various stakeholders, so it is important that their books are up-to-date and accurate.
What are the benefits of bookkeeping and accounting non-profit organizations?
There are several key benefits that non-profit organizations can gain from bookkeeping and accounting.
- It can help to improve financial management and accountability within the organization. This is essential in order to maintain public trust and confidence.
- It can provide valuable information for decision-making purposes. This includes insights into where funds are being spent and where money could be saved.
- It can help to ensure compliance with relevant laws and regulations. This is vital for any non-profit organization operating in a regulated environment.
- It can help to build a strong foundation for future growth. Proper bookkeeping and accounting practices can lay the groundwork for sustainable success in the long term
Why is there a need for bookkeeping and accounting for NPOs?
Bookkeeping and accounting are essential for non-profit organizations (NPOs) for several reasons:
- Financial Management: Bookkeeping and accounting help NPOs to manage their financial resources efficiently. They provide a clear picture of the organization’s financial position, which helps the management make informed decisions.
- Regulatory Compliance: NPOs are required to comply with various regulations, such as tax laws and accounting standards. Proper bookkeeping and accounting ensure that the organization complies with all the regulations.
- Donor Confidence: Donors, whether they are individuals or organizations, want to ensure that their donations are used properly. Accurate bookkeeping and accounting records help NPOs build trust and confidence with their donors.
- Transparency: NPOs are accountable to their stakeholders, including donors, members, and the public. Transparent financial records, including financial statements and reports, help stakeholders understand the organization’s financial activities and performance.
- Strategic Planning: Bookkeeping and accounting records provide valuable information for strategic planning. Financial records can help NPOs identify areas where they can improve their financial performance and make informed decisions about future investments.
Overall, bookkeeping and accounting are essential for NPOs to manage their financial resources, comply with regulations, build trust with donors, provide transparency to stakeholders, and make informed decisions about the organization’s future.
We intend to introduce some basic concepts distinctive to non-profit accounting.
Significant aspects of accounting for non-profit organizations:
Taxability of the donation received: It gives a detailed look at all the donations they took for the course of a year. It is very important that non-profit organizations keep a record of the donations they take in and from whom they accept. Although non-profits are exempt from paying income tax, except for a few rules for property income or capital gains.
Different donations received:
- Unrestricted commitment incomes: Unrestricted commitment incomes refer to donations that have no specific purpose or restriction from the giver. If the giver does not express the reason for commitment, then it will come under unhindered commitment incomes.
- Temporarily restricted net assets: Temporarily restricted net assets are donations that have been given with a specific purpose or restriction, such as for a particular program or project, but which can be used once the restriction is fulfilled. If the giver specifically states the use of the donation, it would go under temporarily restricted net assets.
- Permanently restricted net assets: Permanently restricted net assets are donations that have been given with a permanent restriction, such as an endowment or trust fund. These donations are such that the receiver can never use them in perpetuity at any point in time.
Accounting for Expenses: Expenses vs Expenditure done- Accounting of the expenses which are done for the long run that can be en-cashed, and the cost incurred to meet everyday and current financial needs of the business, generally for a short term is dealt with.
Spending from Corpus: The spending from the whole collection of donations accounts for a specific reason.
Budgeting
- Approval of budgets by trustees– A budget is an estimation of revenue and expenses over a specified future period. It is then approved by the trustees of the non-profit organization after a timely review of financial reports and planning.
- Spending vs budgeting reports– The budget report is made by trustees and the annual spending report is compared, and then a balance is made of all the spending.
In addition to the points mentioned, here are a few more aspects of accounting for non-profits:
- Fund accounting: Non-profits use fund accounting, which is different from the standard accounting system used by for-profit organizations. Under fund accounting, the organization’s financial information is grouped into separate funds, each representing a specific purpose or program. This enables better tracking of how funds are being utilized.
- Donor restrictions: Donors may specify restrictions on how their donations can be used. Non-profits must ensure that these restrictions are followed and report on how the funds are being used.
- Grant reporting: Non-profits often receive grants from government agencies or private foundations. These grants may come with specific reporting requirements, such as detailing how the funds were used and the outcomes achieved.
- Transparency and accountability: Non-profits are accountable to their donors, stakeholders, and the public. Accurate and transparent financial reporting helps build trust and maintain the organization’s reputation.
Overall, bookkeeping and accounting are crucial for non-profit organizations to effectively manage their finances, maintain compliance with regulations, and achieve their mission.
In terms of expenses, it’s important for non-profits to differentiate between expenses that are incurred for the long-term, such as capital expenditures, and those that are for short-term needs, such as operational expenses. Non-profits must also carefully track and report on how they spend from their donations, ensuring that funds are being used in accordance with their stated purposes and restrictions. Finally, budgeting is a crucial aspect of non-profit accounting, with budgets being approved by trustees and compared to actual spending to ensure financial responsibility and transparency.
How to set up bookkeeping and accounting for a non-profit organization?
Setting up bookkeeping and accounting for a non-profit organization can be a complex process, but here are some general steps to follow:
- Choose an accounting method: There are two accounting methods for non-profit organizations: cash and accrual. The cash method records revenue and expenses when cash is received or paid out, while the accrual method records revenue and expenses when they are earned or incurred.
- Set up a chart of accounts: chart of accounts is a list of all the accounts that the non-profit organization will use to track its financial transactions. It is important to set up a chart of accounts that is tailored to the specific needs of the organization.
- Set up a system for tracking donations: Non-profit organizations rely heavily on donations, so it is important to have a system for tracking them. This can include setting up separate accounts for unrestricted and restricted donations, as well as tracking in-kind donations.
- Develop a budget: A budget is an important tool for non-profit organizations to plan and manage their finances. It should include projected revenue and expenses for the upcoming fiscal year. This can also help them avoid overspending and ensure that they have enough funds to cover their operating expenses.
- Choose accounting software: There are many accounting software options available for non-profit organizations. It is important to choose one that is tailored to the specific needs of the organization. Accounting software can help non-profits streamline their bookkeeping process, automate certain tasks, and provide accurate financial statements.
- Hire a bookkeeper or accountant: Non-profit organizations may choose to hire a bookkeeper or accountant to manage their finances. Non-profits may benefit from hiring a professional accountant to help them manage their finances, prepare financial statements, and ensure compliance with tax laws and regulations. Alternatively, they may choose to outsource their accounting needs to a third-party accounting firm.
- Establish internal controls: Internal controls are policies and procedures that help ensure the accuracy and integrity of the organization’s financial records. They should include procedures for authorizing transactions, reconciling accounts, and preventing fraud.
- Maintain accurate records: It is important to maintain accurate financial records in order to comply with tax laws and regulations, as well as to provide transparency to donors and stakeholders. This includes keeping track of all financial transactions, reconciling bank statements, and preparing financial statements.
- Track restricted and unrestricted funds: Non-profits should keep track of the donations they receive and classify them as either restricted or unrestricted funds. This helps ensure that restricted funds are used for their intended purpose and that unrestricted funds are used for general operations.
- Maintain proper documentation: Non-profits should maintain proper documentation for all financial transactions, including receipts, invoices, and bank statements. This helps ensure that all financial transactions are accurately recorded and can be easily audited.
- Reconcile bank accounts regularly: Non-profits should reconcile their bank accounts on a regular basis to ensure that their financial records match their bank statements.
Meru Accounting is a well-known accounting firm. We specialize in maintaining accounts for non-profit organizations.
To know more about our pricing and services, contact us today!
Meru Accounting provides world-class services that cater to all the needs of cloud accounting and bookkeeping of your business.
We work on the best accounting software like Xero and Quickbooks, as well as add-ons that will make sure all your work is up-to-date.
Help you with switching from your traditional software to Xero and Quickbooks.
We also manage VAT, BAS, Sales Tax and Indirect taxes for you so you are always ready at the end of the financial year.
When you choose to outsource your accounting work with us, it benefits you in the following ways:
- 1. Cost-saving
- 2. Access to skilled and experienced professionals
- 3. Better management of books of accounts
- 4. Decreased chances of errors
- 5. Improve business efficiency
- 6. De-burdens in-office employee’s dependency
- 7. Better turnaround time
We work on virtual technologies like Team Viewer, Virtual Private Network (VPN) to share and access data from your system.
You have to share your accounting software login details.
Through that, we complete all of your work and update it on the cloud, so you can have access to your data from anywhere and at any time.
Software is not a barrier for us. Due to our strong and professional accounting knowledge, we can prepare your books in almost any of the accounting software.
Our experts are always all ears to listen to your queries regarding bookkeeping and accounting or our services. You can contact us anytime by visiting: Contact Us page.
We provide our bookkeeping services at the rate of US $10 per hour. So, you only need to pay for the amount of time actual work is done.
We take certain preventive measures to secure your data, like:
- Cyberoam Firewall to prevent any kind of foreign threat.
- Dual-step authentication
- Implement anti-virus
- Limit user access so that login details are with a few people.
Meru Accounting work on some of the best accounting software’s like:
- Xero
- Quickbooks
- Netsuite
- Saasu
- Wave
- Odoo
Along with that, we also work with many add-ons like Workflow Max, Receipt Bank, Slack, TradeGecko etc., to extend your software’s capacity and improved work experience.
To book for trial, call us on our numbers or Please fill out the form here.
We have combined team of Professionals. Seniors are generally Certified Chartered Accountants. Junior Bookkeepers are having Qualifications like Bachelors of Commerce, Masters of Commerce, Masters in Business Administration in the subject of Accounts and Finance, Intermediate level Qualification of Chartered Accountancy, etc.
For information visit our work methodology page.
We prepare a checklist of information required for bookkeeping and send you at timely intervals so as to ensure that we can do bookkeeping faster.
We can provide to you once we move ahead in our interview.
We serve clients on MYOB and have expertise working in Essentials, Account Rights Plus, etc.
Yes, We are presently processing Payroll for Number of clients in US , UK and Australia and take care of complete payroll activities.
Goods and Service tax (GST) is levied on sales of all the goods and services in Australia. GST is generally chargeable at 10% of value of sales.
Business Activity Statement is a predefined form to be submitted to the Australian Tax office by all the business persons in order to report on their all the tax obligations during the period covered.
BAS is generally required to be filed quarterly by various businesses.
Yes, Owner of the business can prepare sign and lodge the tax return on his own. Its not mandatory that the Tax return needs to be signed by an EA or CPA.
No , its not mandatory that it should be prepared by only CPA or EA. It can be prepared by anyone who has PTIN.
We have Enrolled Agent who has the Authority to sign the documents for our clients after completing the through professional check.
Meru Accounting has its operational centre in India and hence the prices are quite less as compared to US based CPA’s and Enrolled Agents.
Meru Accounting has a team of Tax experts. Each Tax expert prepares around 300-400 Tax returns every year for various CPA’s in United States and Individual Businesses like yours. Due to this vast Experience and Robust Quality Check processes in place we can ensure you about correct Tax planning for your firm.
