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It may be tempting to try to save money and perform your nonprofit\u2019s accounting tasks internally. But if your staff isn\u2019t experienced and properly trained, mistakes are likely to occur \u2014 with potentially serious repercussions. Some accounting mistakes are common among newer nonprofits and smaller organizations that attempt to go it alone. In particular, work to\u00a0prevent:<\/p>\n
1. A laissez-faire attitude toward rules.<\/strong> Even the smallest nonprofit should establish formal, documented and detailed procedures for managing bookkeeping and accounting tasks. Your process needs to address all aspects of managing money, including the proper way to accept, document and deposit donations, pay bills, and handle every step in between. Put your procedures in writing and ensure staffers follow each step, every time. This helps minimize the chances of skipping something important and makes it possible to have cross-trained employees fill in for those who regularly perform specific accounting activities.<\/p>\n 2. Data entry mistakes.<\/strong> It\u2019s easy to wreak havoc on your accounts by entering a $500 payment as $50 or transposing numbers, so require employees to check and double-check every single entry. Also, reconcile accounts against bank statements immediately, and don\u2019t overlook even the smallest discrepancy. Little errors don\u2019t go away; they just become bigger problems.<\/p>\n 3. Budget-free decision making.<\/strong> You can\u2019t control overspending or invest a surplus if you don\u2019t know they exist. That\u2019s why budgets are important. They offer a baseline. Budgets don\u2019t have to be intricate to be useful. Just look at a few months\u2019 worth of bills and deposits to set a starting point. Then refine your plan as you go along. Include a \u201cmiscellaneous\u201d category, but don\u2019t allow it to account for the majority of your expenses.<\/p>\n 4. Disorganization.<\/strong> Properly store and file documents such as receipts, invoices and bank statements so you can easily find them when you need to create reports, generate financial statements and complete your IRS Form\u00a0990. Establish file naming conventions and secure storage locations and mandate a daily or weekly filing schedule for all accounting paperwork.<\/p>\n For most organizations, it\u2019s best to have qualified accounting professionals handle such tasks as payroll, accounts payable\/receivable, financial statements and tax compliance. If you have the expertise on staff, great! If not, consider outsourcing these critical tasks. Contact us for more information.<\/p>\n \u00a9 2025<\/em><\/p>\n <\/body> It may be tempting to try to save money and perform your nonprofit\u2019s accounting tasks internally. But if your staff isn\u2019t experienced and properly trained, mistakes are likely to occur \u2014 with potentially serious repercussions. Some accounting mistakes are common among newer nonprofits and smaller organizations that attempt to go it alone. In particular, work […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,10,15],"tags":[8,11,12],"class_list":["post-17361","post","type-post","status-publish","format-standard","hentry","category-articles","category-news","category-not-for-profit","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17361","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=17361"}],"version-history":[{"count":1,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17361\/revisions"}],"predecessor-version":[{"id":17362,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17361\/revisions\/17362"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=17361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=17361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=17361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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