Charity in the Community - Bookkeeping Tips for Non-Profits
From PTA’s and Band Boosters to Churches and Charities – there are many kinds of not-for-profit organizations in Chattanooga. In fact, there are over 1600 non-profits registered in Hamilton County – That’s a lot of charity!
Bookkeeping between for profit and not-for-profit entities are very similar. One major difference is that a not-for-profit does not pay taxes on the income. Another major difference is that they rely on contributions, memberships, free services and donated items in order to run their business. And, finally, they are not owned by a person or shareholders.
Bookkeeping tips for nonprofits:
· Create your Chart or Accounts to correspond to the Board's Budget. Why have 100 income items if you do not need to report them that way to the IRS or to the Board?
· Use class tracking in QB desktop in order to track income and expenses by event or fundraiser.
· Clarifying workers – Employees, Contractors or Volunteers? It’s very important that everyone knows and understands their roles clearly. Nonprofits do not want someone to come back later and say that they thought they were an employee and so they should get a W-2 or that they were injured on the job and want to file a worker’s comp claim.
· Keep Receipts! Use an app like Expensify (we can get you a 10% discount) if you have board members with expenses and you have a hard time getting receipts from them after the fact. Or, have them snap a photo with their phone and email to you so you can save to your bookkeeping software.
· Sync your credit cards and all bank accounts with your bank and accounting software to ensure that you are not missing anything. Remember, it’s all about transparency.
· QuickBooks makes a non-profit version that we recommend - Ask us about pricing.
According to a study done by Indiana University, 95.4% of households give to charity. The average annual household contribution is $2,974. Are you curious about Chattanooga’s stats? Well, there are 47,635 households within 5 miles of MLK and Market Street. If 95% of them were to give the average amount, charitable contributions for just that geographic area come to approximately $135,147,482.
Also, the Chattanooga Center for Non-Profits has lots of free training and information about how to run your nonprofit successfully. They even have a community resource link to “Seek, Share, Swap & Give” to collaborate with other non-profits. Click here to learn more about membership and services.
"Charity begins at home, but should not end there." (Thomas Fuller)
Lynn Talbott, MBA, PHR, has over 20 years’ experience consulting with entrepreneurs of small to mid-sized businesses in the HR and office management capacity. Her specialty is Office/Human Resource Manager coaching and training and finding practical solutions for bookkeeping errors and HR blunders. Lynn has helped manage over 50 business start-ups and many of those companies continue to rely on her expertise today as they continue to grow.