Like other organizations, nonprofits require the annual preparation and submission of financial paperwork to employees, boards of directors, the Social Security Administration, and the IRS. So working with a professional bookkeeper can alleviate the stress that comes with a nonprofit’s bookkeeping tasks.
Staying on top of your nonprofit’s bookkeeping responsibilities requires daily, weekly, quarterly, and yearly attention, which means that keeping up-to-date financial information will save time when you need to submit paperwork. But many nonprofits make avoidable mistakes in their bookkeeping. Since it’s as critical to know what to do right as it is to learn about what can go wrong, here are a few common mistakes and their simple fixes:
Not keeping bookkeeping procedures in writing
Even the smallest nonprofit organization should have its bookkeeping procedures in writing so that the person responsible—whoever that is—can keep everything organized. Having no system at all or a system that no one follows is counterproductive; when filing time comes your accountant will have to go back over literally everything to ensure that all errors are corrected. Hiring a professional bookkeeping service ensures that all aspects of managing your organization’s finances are handled properly.
Not using a professional for the bookkeeping
Small, unintentional mistakes can lead to big, alarming ones. Clerical errors are common and can cause huge problems for your bookkeeping, so it’s important to always double check records with bank accounts. Having a professional bookkeeper means having a second pair of experienced eyes you can rely on.
Not handling your petty cash with care
An errand run with no receipt to show for it means an undocumented purchase and money missing, which is why small expenditures should always be watched closely. When not tracked properly, such transactions get out of control fast. We suggest limiting access to your organization’s petty cash to a few people who are responsible and always turn in all the necessary documentation for proper recordkeeping.
Not keeping a correct account of your financial records
“Detail” is the name of the game when it comes to bookkeeping. Having disorganized or ambiguous financial records can lead to hours of extra work and stress at the eleventh hour. Instead, going to the trouble of including the pertinent details of a transaction at the time the transaction is recorded ensures that the correct information will be reported and that you are getting every benefit possible for your organization. A professional bookkeeping service will ensure that those details don’t get lost.
No Doubt Accounting is ready to assist your nonprofit.
Simple mistakes in the money-management aspect of nonprofit organizations can cause huge headaches. We understand your nonprofit’s bookkeeping stresses and want to help you eliminate the burden. Working with us throughout the entire process gives you the ability to prevent the likely pitfalls that have plagued other groups—we’re here to assist you and your nonprofit with your bookkeeping needs.