The Characteristics of Top-Notch Virginia Certified Nonprofit Accountants

Among Virginia certified nonprofit accountants, there’s a shared set of characteristics that sets the top accountants apart from their peers. Like leaders in any field of endeavor, the best Virginia certified nonprofit accountants are well-educated, hard working, and caring professionals.

But there’s more to it than that. Top nonprofit accounts are:

  • Accurate: They pay attention to their work down to the last penny. It bothers them when they are off by a few cents because they pride themselves on the accuracy of their work. Details matter in most professional fields but matter quite a bit in the field of accounting. Good Virginia certified nonprofit accountants check and double check their work to ensure accuracy.
  • Punctual: They never miss a deadline. If they promise you that work will be completed by 6 p.m. on Friday, it’s delivered on or before 6 p.m. on Friday. They do not excuse tardiness and complete all required paperwork and IRS submissions on or before the deadline. In their line of work, accountants cannot afford to be absent-minded or careless about deadlines.
  • Communicators: It’s not all about the numbers for the best accountants. Great accountants are also strong communicators. They can explain things in layman’s terms to their clients, helping their clients understand their balance sheets and how to manage their finances for maximum impact. They also know how to communicate with peers and managers, sharing information and keeping coworkers informed.
  • Tech-Savvy: While accounting may be considered an old-fashioned profession, accountants today are anything but wedded to quill pens and ruled notebooks. Instead, they are comfortable with technology. You can just as easily find them on their smartphones as on their accounting software programs. They understand and use technology judiciously to enhance their professional abilities as nonprofit consultants. In addition to technology, they must also become software prodigies, understanding, and using software that their clients use to manage their finances.
  • People of integrity: Virginia certified nonprofit accountants bear a lot on their shoulders. They must display strong professional ethics and a high degree of personal integrity. Not only are they guiding nonprofit clients through their financial needs, they are also responsible for audits and other processes that require diligence, accuracy, and honesty.
  • Always seeking to be the best: Not content to rest on their laurels, the best Virginia certified nonprofit accountants are those always seeking to improve their knowledge and skills so that they can better help their clients. It’s not enough to have advanced degrees in accounting and a CPA designation to these accountants. They also seek professional development activities to improve accounting skills, understand new software and technologies, and learn about new tax and finance laws that can impact their clients. They’re always seeking to improve and become their personal best so that they can give the best back to their clients.

Does this seem like a tall order or a list of qualities more descriptive of Superman than your friendly nonprofit accountant? They support, guide, and advise their clients to help them be successful. When their clients are successful, they feel successful. Accountants are truly the unsung heroes of the nonprofit world!

Beck & Company

Beck & Company are Washington DC nonprofit advisors. We also are Virginia certified nonprofit accountants. We work with nonprofits of all sizes serving many different constituents nationwide, providing a variety of consulting, auditing, and accounting services. For more information, please contact us at 703-834-0776 x8001.

The Truth About Payroll Taxes and Accounting for Nonprofits

There are many myths swirling about the nonprofit world when it comes to payroll taxes and accounting for nonprofits. Taxes are a hot topic for nonprofits because many nonprofit organizations think that ‘tax exempt’ means they pay no taxes on anything. Unfortunately, this myth can get you into some hot water with the IRS if you’re not careful. Even though nonprofits can be tax-exempt, not every item in your budget is exempt. Salaries and wages are one such item.

Accounting for Nonprofits: The Myth of “Tax Exempt Everything”

One of the benefits that nonprofits receive is the designation of being ‘tax exempt.’ This designation is received from the IRS for nonprofits who comply with IRS regulations regarding nonprofit status. The idea behind this rule is that nonprofits, by their very nature, funnel excess margin back into their good works to help their constituents.

However, tax-exempt does NOT mean tax-exempt everything. Certain items are still subject to taxation. One such item is payroll.

Nonprofit Payroll: Employee Taxes

Nonprofits are made up of volunteers, part-time employees, and full-time employees. Compensation paid to each type of worker may be subject to taxes.

  • Volunteers who are paid in gift cards and gifts may or may not have their compensation taxed It depends on the type, nature, and value of the gifts. Small, low-value gifts may be tax fee; gift cards may be taxed. Speak with a nonprofit accounting expert or CPA to determine whether or not such gifts are subject to taxes.
  • Part-time and full-time employees must pay social security and Medicare taxes. They must also pay personal federal and state income taxes even if the nonprofit they are working for is a tax-exempt entity.

Who’s on the hook if you forget to pay these taxes? Your Board of Directors is responsible for ensuring tax compliance on all taxable matters. If you are part of a nonprofit Board, be sure to look into taxation issues with the help of a good nonprofit CPA or tax accountant to ensure you are correctly following the laws and complying with all applicable state and federal laws.

What About Religious Nonprofits?

There are some exemptions that may apply to nonprofits. These include churches and certain church-controlled organizations. They can take an elective exemption from FICA taxes (social security and Medicare). Certain services performed by ministers or members of religious orders may also be exempt from FICA. And compensation paid to students by a nonprofit organization may also be exempt from FICA.

FUTA Taxes

In regard to FUTA taxes, the IRS states that “Religious, educational, scientific, charitable and other organizations described in section 501(c)(3) are exempt from tax under section 501(a) are not subject to FUTA tax and do not have to file form 940.” In order to qualify for this exemption, such organizations must receive a favorable determination letter from the IRS to qualify for this exemption. It’s not automatic; you must apply for and receive a favorable determination letter from the IRS.

Confused About Accounting for Nonprofits? Contact the Experts

All of these exemptions and rules apply on the federal level; states may have another set of rules that guides tax exemption items for nonprofit organizations. That’s why it’s important for you to have a local nonprofit accounting firm to work with who understands both federal and state tax rules and how to correctly apply them to your organization. Accounting for nonprofits can be complex. It is helpful to have experts by your side to navigate the financial waters safely.

Beck & Company

Beck & Company are Washington DC nonprofit advisors. We also are Virginia certified nonprofit accountants. We work with nonprofits of all sizes serving many different constituents nationwide, providing a variety of consulting, auditing, and accounting services. For more information, please contact us at 703-834-0776 x8001.

Accounting for Nonprofits: Close the Book on It!

Preparing Your Books for the End of Year Close

‘Tis the season – the season when nonprofits everywhere start thinking about year-end close. This year, vow that you’ll do all you can to smoothly and efficiently close the books with minimal stress to your accountant. Accountants everywhere thank you.

In all seriousness, there are many reasons why doing a good job preparing your books for the end of year close is important. Without closing your books for the year, you’ll have no idea if your nonprofit was profitable or not. Closing the books and reconciling them means that you’ve tallied up everything for the end of the year, put a period or end point on it, and start with a fresh slate in the new year.

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Closing the accounts for the year reset the revenue and expense lines to zero. These ‘temporary’ accounts are now ready for the new year, a clean slate, and a new eye to profitability. Without closing your books, you’ll have a muddle of data to assess, and you won’t get a clear picture on how well your organization achieves its financial goals during the year.

Accounting for Nonprofits: Tips for Success

There are certain steps you can take to successfully close your books for the end of the year. This includes:

  • Keep your accounts updated: Schedule time monthly to reconcile expenses and income. If you let it all pile up to the end of the year, it will feel overwhelming. There’s also more of a chance to make mistakes and forget items.
  • Create a checklist: A detailed and thorough checklist that details every step for your year-end close is a helpful resource. Such a process can guide you through the close out each year and save time.
  • Ask questions during the year: Hopefully, you have a great certified nonprofit accountants to work with, someone who knows your nonprofit and is open to questions. Don’t let questions delay your routine accounting practices. Ask questions throughout the year so that you don’t let mistakes proliferate.
  • Schedule plenty of time for your audit: Dovetail your end of year close with audit prep, but leave plenty of time for your audit. By doing both at the same time – audit prep and end of year close – you’ll be well-prepared for the new year.

Pay Bills, Lower Receivables

Another useful end of year task to tackle before reconciling and closing your books is to pay off any outstanding invoices so that you carry fewer into the new year. You should also review your accounts receivable file, and attempt to collect any past due invoices. You can certainly carry these over, but it is always a good idea to avoid open receivables. The fewer receivables you have, the more income your nonprofit has at the ready.

While closing out your books may not be top of mind as you celebrate the holidays, tackle the tasks early enough in the month so that you can get them done while people remain in the office. Note when your accounting team may be taking time off to travel or celebrate the holidays, and work around their schedules. You can complete your end of year close with plenty of time to enjoy the festivities of the season.

Beck & Company

Beck & Company provides nonprofit accounting and audit services in Washington, D.C and Virginia. Founded in 1987, we specialize in the world of nonprofit institutions, helping them to navigate the complex world of finance and accounting. Our services are always personalized, and cost-effective for your institution. We welcome your inquiry or call.  Contact us today or call 703-834-0776 x 8001.

Considering the Cloud?

Here’s What Nonprofit Accountants Need to Know about Cloud Computing

Many nonprofit accountants continue to be reluctant about switching their files and systems to the cloud. Cloud computing uses shared servers and hardware, rather than servers and hardware located in your physical office space, to store files and run programs. Cloud programs are accessed through secure web-based portals, making it appealing for companies with a mobile workforce or who work from client sites frequently.

Concerns about switching to the cloud range from security concerns to cost concerns. Advances and changes in computing often come with some anxiety. Accountants who, in times past, purchased new hardware and upgraded their programs annually, suddenly find themselves considering site licenses, monthly or annual fees, and new business considerations related to cloud computing. It’s definitely a shift in how organizations think about their technology needs and roll out tech changes.

Dispelling the myths surrounding cloud computing can help you feel more confident as you consider the options. Cloud computing is now ubiquitous in many industries, and nonprofit accountants are catching on to its many benefits.

Cloud Computing Concerns

First, let’s address typical concerns shared by nonprofit accountants regarding moving to the cloud.

  • Security: Many fear that because public clouds, or the typical cloud solution embraced by the average organization, aren’t as secure as paper-based files or networks housed within their physical office. Consider your current security situation for your files. Are valuable files backed up on your server? If so, where are the backups housed? Do you lock your file cabinets, and are they located in rooms with locking doors? Many offices use convenient central files that, while they take up less space and make it easier for workers to access, are by no means as secure as the company assumes. Cloud security, on the other hand, is usually top-notch. Because the companies providing the cloud invest heavily in security, they can afford the best and are constantly updating and upgrading their technology. They may still be breached or hacked, but they are probably more secure than what you are currently using.
  • Costs: Cloud costs may be confusing at first, but they tend to be less than what you would spend on upgrading your hardware. Many cloud solutions provide a monthly fee with an annual subscription that offers significant savings. If you amortize the cost of hardware and software investments in the past, cloud computing tends to come out ahead in terms of cost savings.
  • Mobility: Many nonprofit accountants take work home, especially during busy times of year such as end of quarter and the spring run-up to tax season. Cloud computing is mobile, and can be accessed anywhere you have a web connection. This makes it easy to log on from home, complete your work, and access it again from the office the following day. If you travel frequently, or work onsite at a client’s location, you can also access all of your files no matter where you are.

Choosing a Cloud Vendor

As you can see, the cloud offers many advantages for nonprofit accountants. If you are considering a cloud vendor, review several to find the best match for your requirements.

  • Check references and delve into the vendor’s reputation.
  • Request data on downtimes. How does the vendor handle outages and problems?
  • Do they have someone available 24/7 to help you by phone, email or chat, or do they limit communications?
  • Who owns the data?
  • Do they own their own server or rent space from another company?
  • What support and backup do they offer? How frequently is data backed up, and what are their recovery plans if data is lost?
  • What security do they have in place?
  • What is the cost and contract terms?

Cloud computing offers exciting opportunities for flexibility, cost-savings and security. Moving to the cloud is usually a smart choice for nonprofit accountants.

Beck & Company

Established in 1987, Beck & Company is a group of Washington DC and Virginia Certified Nonprofit Accountants. Our services are personalized to your organization’s needs. We provide independent auditing, accounting, tax services, and consulting to help keep your organization’s finances running smoothly. Contact us today or call 703-834-0776 x 8001.