Non Profit Accounting: Organize Your Financial Records The Right Way

Most people think that since a non-profit organization does not need to worry about

generating any business gains or profit, it would be a simple task to manage and operate such kind of organization. People who have had quite an experience dealing with the management of a non-profit organization will say otherwise, however, as the task of seeing the smooth operation of one is as difficult as a regular business organization is.

One good difference that a non-profit organization and a regular business enterprise have is the accounting method utilized for the operation. The formers accounting system has a more twisted course than the latter. In a non-profit organization, a private sector-governed type is using an accounting system ruled by the Financial Accounting Standards Board while the government sector-based one is using a system of accounting set by the Government Accounting Standards Board. Moreover, a typical non-profit organization is divided into three classes the unrestricted type, the temporarily restricted and the permanently restricted ones.

Unlike an ordinary business enterprise, a usual non-profit organization continues to operate depending on the various programs and activities they plan to do. These programs incorporate the activities of field research, public service, fund raising, donations and grants. With the complex nature of raising and managing these financial resources, it is only fitting for a non-profit organization to use accounting software which is more defined and specific as compared to accounting systems used commercially.

Just dealing with the fundraising aspect of the nonprofit organization will already require a steady monitoring of a lot of things. These include recording the inflow of funds, supporting multiple entries in the system, supporting cross transaction documentations, and generating reports just to name a few. As such, it is advisable for you to get the right nonprofit fundraising software that you will need for your organization.

Before picking the nonprofit fundraising software of your choice, be sure to consider how the donations, grants, and pledges are recorded in the organization, whether the data can be imported or exported from one format to another, and how the system parts are segregated. One also needs to verify how the software classifies donations and prospective donations, whether the system can search specific information using a limited number of criteria, and how exactly does it record revenues and expenses.

One good example of quality accounting software would be the Sage fundraising software that allows you to scale and customize other accounting applications incorporated in the software suite. Sage is a software provider that has been in the accounting software business for a long time now with a line of satisfied clients to back its reliability and success.

by: Tom Hope

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