Nonprofit Accounting Basics

Recent Articles

Line of Credit

Originally Posted: April 30, 2023

Similar to a personal credit card, a line of credit (LOC) is a pre-set credit limit approved by a bank or another financial institution.

Payroll Expenses

Originally Posted: April 30, 2023
  • The initial information for each employee and every change impacting payroll (terminations, overtime, compensation changes, employee deductions, etc.) will be in writing and appropriatel

Allocating Expenses

Originally Posted: April 30, 2023

Expenses are allocated to show the total cost of activities, services, and projects.  It is very important for the board and management to know the total costs of activities, s

Other Issues

Originally Posted: April 30, 2023

Grant Funding

Grant funding may require accounting and compliance different from normal nonprofit operations.

Financial Reporting

Originally Posted: April 30, 2023
  • All financial reports are based on the general ledger.  Adjustments and estimates modifying the information from the general ledger will be documented.
  • Review i

Meeting Expenses

Originally Posted: April 30, 2023
  • Meetings should have formal budgets.
  • Each meeting should be assigned a unique department or project code.  This will help with analyzing variances to

Travel Expenses

Originally Posted: April 30, 2023
  • Create a standardized travel reimbursement request form with instructions for completion.  Excel can be used for the form so totals will be automatically calculated once the form is

Facilities Expenses

Originally Posted: April 30, 2023
  • All leases for office space should be reviewed by an attorney experienced in office leases.
  • Reconcile invoices for rent to the office lease.  Any addi

Revenues/Deferred Revenue

Originally Posted: April 30, 2023
  • Establish policies for revenue recognition.  Certain types of revenue (including: dues; subscriptions; and meeting registration fees) may be received in advance of the product

Payables

Originally Posted: April 30, 2023
  • Verify that the vendor invoice has not been previously paid before processing the invoice for payment.
  • Do not pay from statements if a vendor submits both invoices a
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