Fortunately, nonprofit professionals don’t have to worry about your financial information if you choose FreshBooks. For example, a lawyer may review a contract for your nonprofit and refuse to charge a fee. A purchase order is a document a purchaser (in this case, a nonprofit) sends to a vendor to confirm the purchase of different goods and services. One of the first things we need to clarify before digging deeper into bookkeeping for a nonprofit is the difference between nonprofit and for-profit entities. GrowthForce accounting services provided through an alliance with SK CPA, PLLC. So, relying on them to operate the back office can lead to costly mistakes with tax filings and donation tracking.

• For example, large organizations like universities often have dozens, if not hundreds, of bank accounts for different purposes like scholarships, tuition, projects, etc.
• You want to ensure your back office is run smoothly and efficiently to ensure the errors & omissions policy that protect you is always paid up and that your financial reporting is handled accurately and compliantly.
• You have to know the area to plan a route, and the same can be said about your nonprofit’s budget.
• The statement of financial position represents the nonprofit version of the balance sheet.
• Hourly rates for internal, part-time bookkeepers average between $18-23 per hour depending on job description and location.

For instance, one of the items under the expense account is salary or payroll expenses. An annual budget plan represents a roadmap for nonprofits and ensures the organization is on the right track. As mentioned, nonprofits have to follow strict rules to justify their financial position and fundraising expenses.

Resources for YourGrowing Business

In addition, you’ll need to add around 20% on top of salary, for benefits and overhead, including office space. Those systems will also be more capable of meeting the expectations and demands of public- and private-sector funders, who, increasingly, are insisting on more accountability from their nonprofit grantees. Adding this responsibility to an existing staff member’s to-do list will likely overwhelm your employees, and your books won’t get the undivided attention they need. That’s why your first step in the bookkeeping process should be finding a bookkeeper (and evaluating your outsourcing options). It’s important to keep payroll expenses accurate and updated to ensure the business meets legal requirements.

The program offers numerous integrations and an easy-to-use interface, even for those who aren’t tech-savvy. FreshBooks is available on both computers and mobile devices, so you can stay on top of your nonprofit organization at any time. The average price of outsourcing your bookkeeping ranges from about $2,000 to $3,500 per month depending on the number of transactions and complexity of services required. The average price of outsourcing your bookkeeping ranges from about $2,000 to $3,500 per month depending on the number of transactions and complexity of services required. The current average full-charge bookkeeper’s salary fluctuates between $34,000 to $54,000 per year plus benefits and overhead, according to Salary.com. Depending on your location, this number can be even higher, current listings in high-cost-of-living cities like New York or L.A.

The Treasurer’s Role in a Nonprofit

Now more than ever, part-time or in-house bookkeeping is not ideal, and switching to outsourced bookkeeping or accounting is becoming a more common solution. Many organizations are concerned about making the jump over to outsourcing, but with today’s advancements in technology, working with a remote expert team is almost seamless. Outsourcing can provide advanced and less costly bookkeeping services than a typical nonprofit bookkeeping in-house bookkeeper. In other words, effective bookkeeping practices will accurately record and monitor your financial activity throughout the fiscal year. When the time comes to report your financial activity or make a budgetary decision, you’ll be equipped with precise and thorough information. That way, you can be sure that your nonprofit maintains both its 501(c)(3) status and the trust of its supporters.

To fulfill your mission and impact the communities you serve, you have to raise and allocate funds wisely—That’s why bookkeeping for nonprofits is an essential part of what you do. FreshBooks is a high-quality accounting program that can automate repetitive tasks and daily activities and ensure accurate and reliable bookkeeping. However, there are several actions all nonprofits need to take to ensure data quality and reliability. Nonprofit organizations have a tax-exempt status with the Internal Revenue Service (IRS). Whether you spend one dollar on paper clips or $1,000 on a venue for a fundraiser, every transaction must be recorded.