Proper record keeping is the foundation of any healthy organization but getting the books in proper accounting shape can be overwhelming. In this series we’ll be sharing simple, bookkeeping quick tips for maintaining best practices when it comes to a nonprofits’s accounting functions.
Accounting General Tasks
- Schedule time on your calendar to tend to the accounting needs of your organization on a regular basis. Accounting tasks are often brushed under the rug, resulting in a monumental task to be undertaken at year end.
- Take time to get organized. Create a filing system to segregate paid invoices, unpaid invoices, deposits, and statements.
- Contact your bank and request a statement with a month-end cut-off date (as opposed to a mid-month cut-off date). This will reduce the amount of time and effort required to reconcile the books at month-end.
- Don’t overcomplicate the Chart of Accounts. Keep accounts simple but meaningful to the organization.
- Keep a well documented audit trail — whether or not your organization needs an audit right now. Documentation is essential to a strong accounting infrastructure, and it is much easier to collect as you work through it than it would be to attempt to accumulate upon closing of your organization’s accounting year. If your accounting software allows you to scan/save documents directly in the software, it is highly recommended.
- Think about all the data points you may need to analyze (type of donor, type of donation, program to which a donation or expense applies, address of donor) and build those fields into your data entry. Ensure that those fields are completed for every transaction.
- Collect form W-9 from every vendor you pay as you go so there is not a mad rush in January.
- Cash is king. Monitor cash flow and projected expenditures before shortages arise.
Was this article helpful? Stay tuned for Nonprofit Accounting Quick Tip #2 or check out How to Prepare for a Financial Audit (the Easy Way).