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Non-Profit Accounting in Key West

Non-Profit Financial Statements

A non-profit organization doesn’t encounter less bookkeeping difficulty than a business, which may seem surprising given the aim of the organization. In fact, because most non-profit organizations accept public funds in the form of contributions and grants, they have a higher responsibility to produce reliable and accurate financial statements. Supporters often wish to be assured that their donations are used as efficiently as possible. Detailing the history of donations and their use in the financial statements allows current donors to remain confident that their continued support is well earned, and encourages prospective donors that the non-profit organization is in good hands and deserving of more support.

Non-Profit Bookkeeping

Some of the most complex bookkeeping and accounting issues I face are from Non-Profits. Non-Profits have different accounting rules than businesses do. From fund accounting and restricted accounts to the manner in which they book receivables and income, Non-Profit accounting can be quite challenging. On top of all of this, we advocate that non-profits use Class reporting in their data entry and financial statement preparation, which adds another level of complexity. Class accounting allows for separate Profit & Loss Statements for all of the individual Events and Programs the Non-Profit runs. Running after-the-fact reports, by class, for Grant purposes is easy when the bookkeeper enters in appropriate classes when entering transactions.

Most non-profit organizations are not solely financed by donations. Their other ventures to gain capital can complicate non-profit accounting. Not only must all streams of revenue be accounted for, their usage must be carefully documented so as to avoid misallocation of funds – or the appearance thereof. They must also pay sales tax on many of their other operations.

Non-Profit Audit Preparation

Audit preparation is an important responsibility of your accountant. We have a good working relationship with several of the better-known Non-Profit auditing CPA firms in South Florida. Being ready for your audit not only makes the audit run smoother but gives the auditors more confidence in the organization’s books. This hopefully leads to a shorter audit and most importantly, a favorable rating, known as an unmodified opinion, from the audit firm.

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