Non-profit organizations are in constant scrutiny and inspection by government regulations and inspectors accordingly. Just like any other type of business, non-profit accounting systems require the use of basic accounting records such as journals, ledgers, etc.
The goal of a non-profit accounting system is to make sure financial data is properly entered into accounting records in order to prepare accurate financial reports according to dead lines.
The description given above may result very similar to 'for-profit' accounting systems but there are some key differences which change the way an accounting system for non-profit organizations work such as: Expense classification, capitalizing and depreciating assets, modified cash basis accounting and accounting for contributors. This last procedure may sound familiar since many non-profit organizations need contributors who will allow for such operation to keep working.
Pledges, donation of materials and services, membership dues and special events change the way an accounting system must work for non-profit organizations. Because of these key differences it is important to select the right accounting firm and platform, financial advisor and internal auditor carefully due to the fact that many resources donated to the organization such as property and equipment may be covered by government regulations. This is where a specialized accounting firm or platform must come into play.
The differences between accounting firms and specialized non-profit platforms lies in the fact that full charge accounting firms are quite expensive compared to software platforms.
Before assessing whether or not your organization needs the help of a full charge book keeper or an automated platform it is important to establish the features and benefits each one should offer such as: increased efficiency, better control, timely reports, lower costs and offer great accuracy.
Many non-profit operators may ask why is it necessary to use such services instead of just entering all the data into spreadsheet applications such as Microsoft excel?. The answer is simple, such applications do not offer many controls and security features and data can be easily changed which may compromise the integrity of financial reports.
Using tools such as Microsoft Access which allows operators to manage databases are not completely adequate for non profit organization accounting management since they lack the ability to organize financial reports with the data it holds and many non-profit organizations rapidly outgrow the capabilities these software applications provide.
The most efficient way to complete all these complex tasks is to work with the right software which will provide all the features such organizations need as established above. That is why outsourcing non-profit organizations accounting using the right platform proves to be extremely cost-effective.
Non-profit accounting outsourcing online platforms allow organizations get all the benefits of a full charge accounting plan without the need to hire an in-house accountant/book keeper, it also provides vital services such as: controller services which help avoid and detect fraud to keep the organization in compliance, financial software and implementation, non-profit tax return preparations using forms 990/990PF, pre-audit engagement service, tax exempt application filings for single or group organizations, financial policies preparation, grants writing and fund raising campaign service, Form PC filling with public charity of the Attorney General's Office.
A great example of such service can be found at the Accountiviti web site which covers all the important aspects of non-profit online accounting management.
Whether non-profit organization managers decide to work with an in-house accountant or a fully developed online accounting outsourcing platform, it is necessary to keep in mind that compliance with regulations, security and efficiency must always be present in any accounting service.
