A non-profit organization, also known as a "non-business entity," is a legal entity organized to address one or more specific community needs. Unlike a business, it does not operate with the goal of profit, but to achieve a charitable purpose. They are typically exempt from taxation. Despite this, they often need accounting help to track revenue, expenses, and cash flow. Below are some accounting tips to help your non-profit organization be more successful. 

3 Accounting Tips for Non-Profit Organizations

1. Follow GAAP Standards

Generally Accepted Accounting Principles (or GAAP) are a set of accounting standards, rules, and procedures that U.S. public organizations must adhere to. For instance, financial reports should be filed regularly, using consistent methods, and based in fact rather than conjecture. They should include all positive and negative financial aspects and should recognize revenue under the accrual method rather than under cash-basis accounting.

2. Separate Financial Practices

To protect your organization from fraud, separate financial duties. Assign different aspects to different people so that one individual does not have exclusive control over your finances. For instance, assign one person responsibility for revenue, another for outlays, and a third to oversee the others. This doesn't guarantee honesty, but it provides checks and balances against fraud.

3. Create a Budget

Even if your organization's goal is not for profit, it needs an annual operating budget. This outlines the organization's anticipated annual income and expenses. It lets management track progress, prepare for upcoming outlays, and explain your financial situation to local, state, and federal government departments. This could be crucial to acquiring additional operating funds from public sources. 

If your non-profit organization needs accounting help, contact the experts at Income Tax Etc. in Ottawa, IL. They serve clients throughout LaSalle County and the surrounding regions, specializing in tax services, payroll, bookkeeping, and more. They are skilled, professional, and easy to reach when you need advice or have questions about your finances. Learn more about them by visiting their website, or call (815) 434-2450 to discuss the needs of your non-profit organization.