Nonprofits: To Avoid Common Accounting Mistakes, Perform a First-Quarter Financial Check-up
The first quarter of the year will be over soon, so it’s a good time to evaluate your processes to make sure your organization isn’t making any common accounting mistakes that seem to befall nonprofits. It’s still early enough in the year for you to correct any problems and sail on through the rest of the year smoothly.
Ask yourself these questions to see if your nonprofit is on track financially:
Is our organization following an accounting procedure?
It’s important that every step in your accounting process be identified and documented. The procedures should be in writing and basically be a step-by-step set of instructions that would allow even a fill-in or new person to know how to handle the accounts. If you don’t have a procedure outlined yet or find that people have been straying from the process, you need to remedy the situation right away. Create a written procedure or re-train employees to follow the guidelines that have been established.
Are our financial records accurate?
Do a mini-audit of your books for the first quarter. Are there any discrepancies? No matter how small, you need to make sure and resolve them, before they become large problems. Check that transactions are being entered in a timely manner, so there is less chance of error.
Is our organization working with a nonprofit professional?
It is in the best interest of the organization to work with an experienced nonprofit accounting specialist to make sure everything is handled properly. This resource is invaluable and could end up saving money and time, which are almost always in short supply at a nonprofit. Don’t take any chances and think a few dollars could be saved by not working with an expert. It’s less expensive than you might think and can save your nonprofit from problems and potential ruin in the long run.