Whether you’ve already established a non profit organization or you’re interested in starting a non profit foundation, if you’re unsure of how to handle a non profit’s accounting obligations, continue reading. As you’ll discover a wide variety of accounting tips which have been designed especially for non profit organizations.
Many individuals falsely believe that non profit organizations don’t have any tax obligations. However, non profit organizations still have to adhere by tax regulations which have been set out specifically to govern non profit organizations. So it’s important to ensure that you’re well aware of your non profit organization’s tax obligations.
As an example, non profit organizations are required to submit financial statements each year, in order to prove that they are in fact non profit organizations. So as the leader of a non profit organization, you’ll be responsible for ensuring that every cent which your business acquires and spends is documented in your business’ financial books.
Make sure that you record all of your organization’s receipts and invoices:
In order to meet your legal obligations as a non profit organization, you’ll be required to keep track of each receipt and invoice which you’ve received. As well as any invoices which you may have sent to contractors who have provided your foundation with an essential service.
Use non profit friendly accounting software to keep on top of your business’ finances:
The easiest way to keep track of all of your non profit organisation’s transactions is to purchase non profit friendly accounting software. As an example, you can’t go wrong purchasing and downloading the best non profit accounting software, which you can find. As there are accounting programs which have been created specially for non profit organizations and foundations. Some of which are easy enough to use if you have no background in accountancy.
Ensure that you’re able to provide 100% reliable financial statements:
One of the benefits of using accounting software is that if you keep on top of your foundation’s expenditure, you’ll be able to easily print out reliable financial statements. Which will come in handy if your organization has to undergo a financial audit. To ensure that you’ve properly balanced your non profit foundation’s books. As unfortunately there are some for profit businesses which try to masquerade themselves as non profit organizations. In order to pay a lesser amount of tax, then a for profit business would be expected to pay.
Make sure to track every donation which your foundation receives:
It’s also critical to ensure that your foundation properly documents every donation which your foundation receives. As an example, you may want to record all of your business‘ online donations in your computer based, accounting program.
Hopefully you now have a far better idea of your non profit organization’s accounting responsibilities and tax obligations. So that you’ll be able to manage your foundation’s expenditure on your own.