Nonprofit Accounting Basics

Financial Management

A Picture is Worth a Thousand Numbers

Originally Posted: February 15, 2021

Not surprisingly, many nonprofit board members do not fully understand financial statements—despite the fact that understanding those statements is key to good governance.

About Operating Reserves for Nonprofits

Originally Posted: April 7, 2021

About Operating Reserves" - What are they and why have them?

Assessing Fraud Risk

Originally Posted: October 1, 2020

One question I frequently ask nonprofit organizations I speak to is, “What processes are in place for identifying, responding to, and monitoring fraud risks?” Most times, the response describe

Budgeting and Financial Planning

Originally Posted: September 1, 2022

Effective financial management is an ongoing process that features a cycle of good management habits.

Budgeting for Capital

Originally Posted: July 28, 2010

An organization's financial plans should include budgets for operations and for capital.  Together these comprise what I refer to as an Organizational Budget.

Capital Budgets Play an Important Role in Nonprofit Planning

Originally Posted: November 26, 2021

Annual operating budgets for nonprofit organizations will always be center stage, drawing the attention of senior management, Board, and staff.

Choosing the Right Commercial Checking Account for your Nonprofit

Originally Posted: January 3, 2015

Throughout the year, nonprofit organizations review their processes for improvement, cost savings, and areas where they can create greater operational efficiencies.

Debt to Assets Ratio

Originally Posted: April 11, 2022

This is one of many leverage ratios used to determine the financial viability of an organization.

Designing a Four Star Dashboard

Originally Posted: September 30, 2021

In a previous article, we described the importance of including multiple internal stakeholders when selecting and implementing an Association Management System (AMS).

How Can I Explain the Bottom-Line Budget Impact of Multi-Year Grants?

Originally Posted: August 6, 2021

Question: I am the Executive Director of a nonprofit organization that was recently awarded a 3-year grant. We recorded the grant in full last year.

How Nonprofits Can Better Manage Overhead Expenses

Originally Posted: January 23, 2023

Managing a nonprofit organization’s overhead (management and general) expenses is just as important as managing program and fundraising expenses. Most nonprofits would not dispute this statement.

Internal Controls for Medium and Large Non-Profits-Part II

Originally Posted: October 9, 2020

Internal Controls for Medium and Large Non-Profits-Part II, which is presented by Shawn Miller of Calibre CPAs, continues the discussion relating to controls that can be implemented to mitigate the

Internal Reports Introduction

Originally Posted: September 1, 2022

Reporting is a key component of the Financial Management Cycle.

Is It Time to Be Proactive with Your Office Lease Situation?

Originally Posted: December 1, 2020

A familiar scenario has played out month after month for many nonprofit organizations during this prolonged period of financial uncertainty, remote work, and virtual programs and meetings.

Looking at the Nonprofit Financing Puzzle!

Originally Posted: January 10, 2021

If you’re like most nonprofit leaders, you may have considered or even taken steps towards evaluating financing alternatives for your nonprofit organization.

Managing Information Technology - The Case for Outsourcing

Originally Posted: February 22, 2021

The term “outsourcing” can have negative connotations, but for many nonprofit organizations it can be an effective tool to help move the organization forward.

Net Investment in Fixed Assets

Originally Posted: April 11, 2022

This calculation subtracts any existing long-term debt related to fixed assets (e.g., vehicle loan, mortgage, leasehold improvement loan, etc.) from the value of fixed assets.

Nonprofit Accounting: Serving the Mission

Originally Posted: August 31, 2020

Though not usually involved in customer service to donors or members, the accounting and finance department of a nonprofit often provides customer service to the rest of its organization.

Nonprofit Operating Reserves Initiative Website

Originally Posted: November 3, 2017

Beginning November 1, 2017 the NonprofitAccountingBasics.org website added an important new resource it its “Fundamentals” section.

Operating Reserve Ratio

Originally Posted: April 11, 2022

This ratio is a focused variant of the Months Cash on Hand ratio.

Operating Reserves: The Key to Building Financial Flexibility

Originally Posted: September 23, 2015

The Nonprofit Operating Reserves Initiative Workgroup (NORI) first began meeting in 2007 to address the alarming

Outsourced Accounting Services

Originally Posted: February 15, 2021

Outsourcing is a contract with a third party to perform services which are normally done in-house. These services typically are provided by companies who specialize in the field.

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