Get Ready to Get Grants!

Are you a not-for-profit director? Are you planning to grow your organization? Strategically planning your accounting set up can help you acquire and maintain the necessary revenue streams that your organization needs to achieve its goals. 

Fund Accounting for Transparency

Fund accounting is an optional accounting policy choice that a not for profit can adopt for its financial reporting. The organization creates different funds to track contributions. The funds can be internally designated or they could be required by current or anticipated (future) funders. Typically, the different funds include unrestricted (general operating) funds, restricted funds (these funds may have separate bank accounts), capital funds (set aside for asset purchases), and endowment funds (where the capital is protected and the interest or other income produced is utilized in some manner). 

Fund accounting helps managers, donors, grantors, and lenders, easily understand how the financial activities of the organization relate to specific programs and this boosts confidence in the ability of the organization to fulfill its mandate.  

Cloud accounting software such as Quickbooks Online and Xero both offer methods for tracking funds and reporting them to users of the financial statements.

Reporting for Best Decision Making and Compliance

Funders want to see a record of good governance. Good governance is ACTIVE governance. This means that directors review the books and that those books need to be kept up to date. In fact, most organizations do not realize that keeping their financial records updated and reviewed on a regular basis (more often than yearly) is what can separate successfully financed organizations from those that are always scrambling to renew or find funding sources. 

Invest in a Financial Advisor 

Don’t wing it. Designing the financial reporting system and related policies of an organization is DIRECTLY and INSEPARABLY related to its strategic planning. Although it takes time and resources to set up and manage an accounting system, it takes more effort to convince funders to support a poorly managed operation that cannot demonstrate how it used its hard won funds. Start planning now!