Did you know that your nonprofit organization has most of the same needs as a for-profit business? For starters, it needs to at least break even, but it should have a planned surplus from operations to build a reserve for future projects or unexpected funding shortfalls. It has to carefully monitor cash flow, have available lines of credit, and meet the employment tax and regulatory requirements imposed on all businesses.
And yet, there are some major differences between for profit and nonprofit accounting. Accounting and reporting differences that require financial expertise in the nonprofit industry:
- Accounting specifics to the industry – What do the financial statements specific to nonprofit organizations mean? How do we manage temporarily restricted net assets or reimbursement grants?
- Fund accounting – how much is being spent on each restricted grant and will we be ready to report on the use of the grant? What are net assets? What is fund accounting? Let’s talk!
- Accounting systems streamlining – how do we implement best-in-class software to make your financial process as efficient and cost-effective as possible? Digital accounting systems are one of our passions.
- Federal grants – what systems do we need to implement to meet the stringent requirements of the federal and state grants? Is the financial system producing real-time information to keep grant directors informed of the expenses against their grants? Do you have a grant compliance checklist?
- Indirect Costs – how do we navigate the complexity of requesting an indirect cost rate through a NICRA? How do we plan and budget for fluctuating rates? How do you calculate indirect costs?
- Yearly Audits – do our financial systems produce auditable financial information and are we ready to go through an audit that results in a clean audit opinion? Do you have a thorough audit preparation checklist? Are you tracking restricted and unrestricted net assets? We can help!
- Profitability – is this possible and how much is allowed for nonprofits? How does the indirect cost rate affect profitability?
We are recognized as a leading Digital CPA firm within the nonprofit industry and our leaders are recognized as nonprofit experts within the CPA profession. The American Institute for Certified Public Accountants (AICPA) has relied on our expertise to participate on their boards, lead seminars to peer CPAs and to contribute articles to their website.
Our Chevy Chase firm is just the right size for your organization! We highly value each of our clients, regardless of your size or location. Call us today and we can discuss your nonprofit accounting needs and how we can help you.
Ask the Lumix team to take a look at your financial reports – get an expert’s perspective with a complimentary consultation!
Do your nonprofit financial statements make sense?
Are you seeing the tip of the iceberg of possible nonprofit accounting errors?
Do you know the story your financials are telling? Do you have a nonprofit accounting cheat sheet?
Schedule a complimentary 30-minute consultation. For a more thorough assessment, we charge a small fee and provide you with a confidential list of potential issues including questions to ask and ideas to improve your financial story. Schedule now by contacting us at (240) 395-4500.
”Two years ago, in my new role as Executive Director, I had an uncomfortable feeling about the accuracy of the financial information I was receiving from my accounting team but I couldn’t identify exactly why. I was referred to Lumix and within the first 30 minutes, Maribel confirmed that the reports were not making sense and that there was a lot of important information missing. That consultation changed the course of our organization. Our financial information is now clear, timely and correct. We are also able to plan and measure results accurately, which is helping us achieve our organizational goals. ”
Anonymous Executive Director