Nonprofit Accounting: Plenty to Account For
Nonprofit organizations add value to their communities and the world in ways that many for-profits cannot because they are focused on serving and taking care of the needs of society. While their success often comes from volunteer workers, it also comes from the effective use of donations and related funding. So, of course, accounting for the expenses and funding coming into your organization is crucial for its success. There are two critical questions to keep in mind when you are accounting for a nonprofit.
What is the Primary Mission?
What is the main reason your NFP does what it does? As the name implies, nonprofits are not built with the goal of earning a profit. That’s one of the reasons these organizations receive special tax treatment from the government. So what do you look for instead when accounting for your nonprofit organization? Because your primary mission isn’t to produce a profit, your NFP should have a secondary mission of keeping revenue above expenses, which seems simple, but many nonprofits fail at this and find themselves operating in the red within just a few years.
What is in Your Financial Statements?
When you are accounting for a nonprofit, you will notice that there are some distinct differences in the financial statements that are used. While a for-profit will use balance sheets, income statements, cash flow, and statements of stockholders’ equity, a nonprofit will use statements of activities, expenses, and financial position to judge where they are in relation to their goals. These different metrics really require a different set of financial tools for tracking and reporting.
How Serenic Navigator Can Help
Fortunately, Serenic Software has been working with nonprofit organizations like yours for over 15 years to provide an efficient way to manage all the accounting details specific to the NFP and public sector world. Serenic can improve the efficiency of any nonprofit by keeping them within compliance of grant requirements, cutting down on spending for projects, reducing labor costs, and simplifying the auditing process.
How it Works
Serenic Navigator is nonprofit accounting software that works alongside your business processes and mission to organize, simplify, and ultimately streamline all of your fundaccounting. This integrated approach enables you to provide complete transparency and remain accountable in order to secure future funding. This also keeps organizations aware of where they are in relation to their milestones and goals, so you are always tracking your secondary mission while remaining focused on your primary one.
If you are looking for a way to improve the accountability and management of your funding, see why so many other nonprofits are choosing to simplify with Serenic Navigator.
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