Accounting Policies and Procedures Manual

A robust Accounting Policies and Procedures Manual (APP manual) is the organization’s written blue print defining the process and responsibility of each accounting/financial function in the organization.   With the recent changes in the accounting profession which affect a not-for-profit’s governance and reporting to the Internal Revenue Service, the APP manual has become increasingly relevant but also in desperate need of revision.

The process of writing an APP manual must begin by integrating the current processes used by the staff in the organization with adequate internal controls, segregations of duties and authorizations. It is always a difficult task to improve an environment of good internal controls given the specific limitations of the organization such as small staff, different locations or even a virtual environment.  During the creation process, this delicate balance is juggled and discussed with management and the Board.  Ultimately, the Board of Directors must approve the APP manual and any subsequent changes.

The APP manual should address several areas of financial oversight:

  • Establishing a set of reasonable internal controls that will protect the resources of the organization but do not become so burdensome that they reduce the efficiency of the organization’s processes.  A fully documented system of internal controls also adds assurance during a financial statement audit.
  • Protecting employees by providing them a set of clear guidelines to be followed, which include proper documentation and approvals of the work they perform regularly.
  • Providing a rich reference and training tool for staff and the Board.  The APP manual allows for the current and new staff to follow standard methods which leads to reliability in the financial statement balances.
  • Assigning clear responsibility to each staff member.
  • Consolidating all other board policies required under new rules:
    • Record retention policies
    • Whistleblower policies
    • Audit committee responsibilities and procedures
    • Conflict of interest policies
    • Policies on executive compensation
    • Insurance coverage

If your organization’s APP manual has not been updated in more than 3 years or if your organization has changed in the last years (growth, new programs, becoming virtual, etc…) we recommend that you take a thorough look at the APP manual soon and make sure it continues to address your organization’s current needs.  Also make sure that your APP manual addresses the new requirements from the SOX Act and Form 990 disclosures.

We have extensive experience in writing APP manuals for organizations of every size and would be happy to assist you.  We can also assist in writing procedural manuals for isolated functions such as event planning and reporting.