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Nonprofit Accounting Basics
Dear (Partner of Independent Audit Firm):
Annual Budget Process Example Template (Author: Elizabeth Foley)
The IRS maintains a listing of the code sections that apply to exempt organizations.
An organization must balance its checkbook at least once a month to know how much cash it has to operate.
Accounts receivable (AR) are monies owed to the organization by another party.
Petty cash is used for small, incidental expenses where it is not convenient to use a check; like for a taxicab.
Processing payroll is time consuming and tricky given the various state tax laws. It is recommended that you outsource your payroll processing to a payroll-processing firm.
An account payable is an outstanding bill from a vendor that the organization has an obligation to pay.
If an organization decides to open a line of credit, it does not actually appear on the books of the organization until it is put into use.
The following are the entries necessary for cost-reimbursable government grant (assuming the grant is determined to be an exchange transaction):