Financing a Non-Profit: Accounting Tips That’ll Help You Save Money
Nonprofits consistently serve a role in the community and are often on the cutting edge of activism and research.
However, before you can help anyone else, you will need to make sure that your nonprofit organization is in a position to help itself. Think about the airplane analogy.
When the flight attendants go over the pre-flight instructions, they always tell you that before you help someone else in the event of an emergency, you need to put your own mask on.
Your nonprofit will be a much bigger help to the surrounding community when it is able to handle its accounting needs without an issue.
As such, you should follow the accounting tips in this article so that your nonprofit accounting is always in good standing.
1. Budget Like Your Business Depends on it — Because it Does
If you don’t have a budget for your nonprofit, you’re already several steps behind.
Unfortunately, a lot of nonprofit organizations have their hearts and intentions in the right place, but just don’t have the business savvy to go with it. In this regard, you will need to master the basics by making sure that you first and foremost set up a quality budget.
What’s more, stick to your budget to be sure that you are taking account of every dime that goes in and out of the organization. This will be the difference between success and failure with your non-profit, so get it right the first time and make sure that you follow the budget impeccably.
2. Develop Serious Accounting Campaigns and Keep Track of Each Donation
Nonprofit organizations also live and die by the donations that they receive.
As such, you will need to have thorough campaigns to take in these donations, rather than just asking for money. People will feel more compelled to help you out when you are putting out the right information and being a good steward over your brand.
Start on the front end by knowing exactly how much money you need, and how you will move forward with your campaign. As you start taking in the donations, you will need to also keep thorough accounting of each, so that you can track it and hit your goals.
This will also be useful to you when tax time rolls around.
3. Set Actionable Goals For Your Non-Profit and Track Them
Failing to set proper goals is one of the worst accounting mistakes that you can make.
When you know where you are headed, it not only helps you to dream big, but it also helps you to account for potential financial pitfalls. It will allow you to catch issues as they come along, and you can set up contingency plans that count.
Be sure that these goals are actionable so that you can set the proper courses of action and take the steps required.
4. Make Use of Accounting Software Specifically For Nonprofits
Rather than just grabbing Quickbooks or standard financial software, take the time to invest in software packages that are specifically for nonprofit organizations.
Nonprofits have their own sets of issues that you need to know about, and these software packages will help you to track your data and account for every matter.
5. Consistently Audit Your Spending
Without question, a lot of nonprofit organizations year in and year out find themselves struggling financially. This generally happens when you spend recklessly without correcting your mistakes.
For instance, you will need to keep track of everything from business travel expenses to the cost of gas money and equipment.
When you notice areas that are ruining your budget, it is important that you audit and correct course so that you are able to stop the bleeding. Failure to do this will cripple your organization sooner than later.
6. Put the Right Financial Professionals in Place
It’s vital that you handle the way your organization is set up.
For instance, you will either need a full-time certified public accountant (CPA) on staff or a third-party that you contract with from time to time. You will also need a finance department and assistants that can provide you with checks and balances for your company.
By having access to the best financial professionals around, you will be better able to handle all accounting matters with fewer mistakes.
7. Automate Processes Whenever Possible
No matter what sort of non-profit organization you run, business automation will be key.
Automation is here to stay, and you can expect artificial intelligence (AI) and machine learning to be a huge piece of this puzzle as your company grows. This will reduce your workload and expenditures while making sure that your accounting is more accurate and complete.
Figure out which accounting processes are feasible and helpful to automate and you will find that your business gets leaner as a whole.
8. Keep Some Money in the Coffers
It’s important that you take the time to set some money aside for your savings so that your company is better off for it.
This way you’ll be able to handle shortfalls as they come along. What’s more, keep track of your inventory and make sure that you do everything necessary to handle taxes and fees, so you can maintain your nonprofit status.
It’s vital that you do everything necessary to keep your nonprofit status compliance in check.
Utilize the Accounting Tips That are Helpful For Your Nonprofit
Let these accounting tips help you out when you want the best for your nonprofit. Manage these tips and you’ll be taken care of.
Need accounting help? Take the time to reach out to us today.