Nonprofit Bookkeeping & Accounting For Dummies Cheat Sheet

You can either assign this task to one of your staff members or trust a professional to handle it. One of GAAP’s (Generally Accepted Accounting Principles) principles is the Principle of Consistency, which discusses the importance of creating and keeping the same report every year.

You’ll need to record the car as an in-kind donation from the dealership, noting even details about the model and make of the vehicle. Adding this responsibility to an existing staff member’s to-do list will likely overwhelm your employees, and your books won’t get the undivided attention they need. That’s https://www.bookstime.com/ why your first step in the bookkeeping process should be finding a bookkeeper (and evaluating your outsourcing options). Outside of IRS requirements, payroll can be the most important role for a nonprofit bookkeeper. As your nonprofit grows, you must protect yourself and the organization from fraud.

Create financial statements

This person can be your organization’s board president, treasurer, or bookkeeper. The easiest way to do this is with quality accounting software that helps create standardized reports. Regardless of your nonprofit size, there are several accounting software options available.

It can be tempting to combine nonprofit funds with your personal accounts during this time since you aren’t bringing in a lot. When choosing a bookkeeper, updating financial information, and developing reports, you’ll want to keep in mind your organization’s mission and goals. Some nonprofit bookkeeping of the revenue your nonprofit receives will be restricted, or set aside for specific purposes by the contributor. GAAP is a foundational accounting concept that all nonprofits should be familiar with. For now, let’s get started by reviewing the principles that comprise GAAP.