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Nonprofit organizations, associations, churches and faith-based ministries face different challenges than their for-profit counterparts. Among these challenges are a nonprofit’s accounting needs. With limited funds for administrative tasks and strict reporting requirements like FAS 116 and 117, nonprofit organizations can save time and money, while reducing the likelihood of reporting errors, by implementing a nonprofit accounting system.
Nonprofit accounting solutions provide organizations of all sizes the tools they need to manage income and expenses efficiently. Because nonprofits are subject to federal audits, it’s important to accurately record all of an organization’s financial details. These systems track an organization’s donations, grants, expenses, assets and transactions.
Nonprofit financial software, sometimes called fund accounting software, helps achieve fiscal transparency, ensure federal reporting standards are met, maximizes donor dollars and minimizes unnecessary expenses.
Accounts in Blackbaud Financial Edge
These features work together so a nonprofit organization can make the most of their assets, maintain fiscal visibility, nourish their reputation and acquire lasting trust from supporters.
As another fiscal year closes, nonprofit accounting regulations and end-of-year acquisitions and partnerships are a regular topic of discussion in the news. Here are some of the trending discussions right now:
Keep fund ledgers separate. Nonprofits must keep different ledgers for all of their fund sources: direct donations, grant monies, fundraising dollars, pledges etc. Not for profit accounting software independently tracks fund sources and expense types, simplifying reports and ensuring accuracy.
Prioritize expenditures. Ledger reports provide a holistic overview of an organization’s financial landscape. This allows an organization to strategically prioritize future investments and upcoming expenses.
Document and meet budget goals. Having a holistic picture of an organization’s entire financial portfolio allows board members to create realistic budgets and meet associated goals.
Simplify tax preparation. Many nonprofit accounting solutions include features that prepare the Form 990—a tax form requiring certain federal tax-exempt organizations to file with the IRS.
Reinforce trust in your organization. Transparency in an organization’s financial data shows current and prospective donors how their dollars are utilized.
These features work together so a nonprofit organization can make the most of their assets, maintain fiscal visibility, nourish their reputation and acquire lasting trust from supporters. For more information on software especially for nonprofit organizations, read our buyer's guide.
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