Nonprofit Accounting Basics

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Petty Cash

Petty cash is a small amount of cash kept on hand to pay for incidental expenses such as cab fare or postage, where it is not convenient to use a check or credit card.

Payroll

Payroll includes many components in addition to the wages paid to employees.

Line of Credit

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

  • 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

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

Grant Funding

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

Financial Reporting

  • 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

  • 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

  • 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

  • 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