Nonprofit Accounting Basics

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For Starting a Nonprofit

Topics in this section have been chosen and arranged to provide guidance in strong financial management to someone who may be considering starting a nonprofit and who otherwise has little or no knowledge of or experience with nonprofits.

Payroll Expenses

Originally Posted: December 7, 2009
  • Every change impacting payroll (new hires, terminations, overtime, compensation changes, employee deductions, etc.) will be in writing and appropriately approved.
  • Randomly audit the in

Payables

Originally Posted: December 2, 2009
  • Verify that the vendor invoice has not been previously paid before processing the invoice for payment.
  • Do not pay from statements if a vendor submits both invoices and statements.

Allocating Expenses

Originally Posted: December 1, 2009

Expenses are allocated to show the total cost of activities, services, and projects.  It is very important for the board and management to know the total costs of activities, services, and pro

Other Issues

Originally Posted: December 1, 2009

Grant Funding

Grant funding may require accounting and compliance different from normal nonprofit operations.

Financial Reporting

Originally Posted: December 1, 2009
  • All financial reports are based on the general ledger.  Adjustments and estimates modifying the information from the general ledger will be documented.
  • Review interim reports agai

Meeting Expenses

Originally Posted: December 1, 2009
  • Meetings should have formal budgets.
  • Each meeting should be assigned a unique department or project code.  This will help with analyzing variances to budgeted expenses.
  • Al

Travel Expenses

Originally Posted: December 1, 2009
  • Create a standardized travel reimbursement request form with instructions for completion.  Excel can be used for the form so totals will be automatically calculated once the form is compl

Facilities Expenses

Originally Posted: December 1, 2009
  • All leases for office space should be reviewed by an attorney experienced in office leases.
  • Reconcile invoices for rent to the office lease.  Any additional charges invoiced by th

Expenses

Originally Posted: December 1, 2009

In this section we will cover:

  • Payroll
  • Facilities
  • Travel
  • Meeting
  • Allocating Expenses

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