Year End Accounting Tips and Advice

Year-end arrives faster than the Christmas decorations in the local big box store, and as part of your nonprofit financial management duties, you should start thinking about auditing services and year-end close now.

Some nonprofits end their fiscal years on June 30th, particularly nonprofits in the education sector; those in healthcare and other industries may be on a typical corporate calendar with the year-end December 31. For those whose bell will toll the close of the books as the ball drops in Times Square, now is the time for you to start thinking about nonprofit accounting audit services and all the things you need to tidy up the financials for year-end close.

Are You Ready for FASB Compliance?

Remember that new FASB guidelines affect asset categories, liquidity reporting, and expense reporting. Have you chosen where to move items that are in the third category of net asset classifications that’s going away? Now is a great time to start those discussions.

Liquidity is an area often confused by folks in the nonprofit world. Nonprofit financial management includes cash management; liquidity refers to having enough cash on hand to satisfy outstanding debts and obligations that may arise within a short period of time. Many nonprofits have a positive net balance but lack liquidity because their assets are tied up in restricted funds or grants. Be sure you have enough cash on hand to pay those bills that arise at year end.

Lastly, expense reporting is changing with the nature of the expense, like a line item, appended to your expenses. Take a look at typical expense categories and develop your own line items as needed.

This isn’t an exercise simply to satisfy FASB. The way that you depict your finances through the end of year report can tell a powerful story that encourages donations and support for your mission. With the right message, you’ll have an easier time courting donors and securing funds.

Plan for End of Year Nonprofit Financial Management

Take time now to plan for your end of year close and reporting needs.

  1. Relay key dates such as the last date to submit year-end invoices to accounting to everyone in your organization.
  2. Request that reimbursement receipts and reports are turned in with plenty of time for processing. Set a date now and circulate it among your staff to ensure everyone is aware of it.
  3. Catch up on data entry tasks to ensure payables and receivables are up to date.
  4. Review where your organization will present year-end financial results. Will it be at the typical board meeting or published on a site such as Charity Navigator or GuideStar? Consider their deadlines and requirements as well.
  5. Leave adequate time in the schedule for printing and mailing. Publishing an annual report requires several weeks for writing the reports, graphic design, and printing if you send it to a commercial printer. Mailing at 3rd class nonprofit rates also takes two to three weeks depending upon mail volume. With increased mail volumes around the holidays, leave plenty of time for mailing out reports.

If you are feeling overwhelmed by end of year nonprofit financial management requirements, consider nonprofit accounting auditing services. Some nonprofits are required by federal, state, or local jurisdictions to provide fully audited financial statements. Others reach a specific financial threshold that triggers an audit requirement. Regardless, all nonprofits benefit from a thoroughly audited financial statement.

Professional nonprofit accounting audit services can help your organization tell its story through financial statements in ways that are easily understandable to the public and donors. A strong, clear, and compelling story goes a long way in supporting the achievement of your mission and vision.

Beck & Company

Beck & Company is an independent certified accounting firm offering accounting and tax services for nonprofits, nonprofit financial management, auditing services and more. Since 1987, we have helped many nonprofits in the Washington D.C. area and along the Eastern seaboard with their accounting and financial management needs. We provide audit, tax, accounting, and consulting services that address all aspects of a small to mid-sized nonprofit organization’s business. Contact us or call 703-834-0776 x8001.