Once you have a good understanding of your organization’s finances, you can begin to develop financial reports. Bookkeeping for nonprofits and developing financial reports can seem daunting, but with a little knowledge and effort, it can be relatively simple. But by understanding the unique needs of nonprofits, bookkeepers can help them make the most of their limited resources and further their important work. Nonprofits have to account for all donations, both cash and in-kind, as well as track expenses. As such, you must keep accurate records and produce timely financial declarations. All of these statements are important in gauging the financial health of your nonprofit.
Some donors choose to judge nonprofits based solely on their overhead expenses. However, this narrative is changing in the sector as more people become aware that overhead is a necessary nonprofit bookkeeping expense for growth. Encourage your donors to judge your organization based on your impact in the community rather than how much you spend on fundraising and administrative expenses.
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Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a refund by a certain date, especially when making major purchases or paying bills. The easiest way to check a refund’s status is by using Where’s My Refund? IRS Free File will open Jan. 12, 2024, when participating software companies will accept completed tax returns and hold them until they can be filed electronically with the IRS. IRS Free File Guided Tax Software, available only at IRS.gov, is available to any taxpayer or family with Adjusted Gross Income of $79,000 or less in 2023. To avoid delays in processing, people should avoid filing paper returns whenever possible. Taxpayers living in Maine or Massachusetts have until April 17, 2024, due to the Patriot’s Day and Emancipation Day holidays.
Nonprofits must be able to track their income and expenses to stay compliant with government regulations and maintain their tax-exempt status. Does your nonprofit have a dedicated team member with both the skillset and capacity to handle your accounting needs? Many small to midsize organizations struggle to find someone to fill this role. Actually, 18% of nonprofits listed limited staff as their greatest challenge in 2019. This means that finding someone to take on these responsibilities (especially as you grow) can be immensely challenging. In addition, checking in on the budget one or more times each month will allow you to adapt to change.