7 Organizational Structure Types With Examples

Take our 2-minute survey to find out if outsourced accounting and bookkeeping is a good fit for your organization. We’ll implement new technology and processes to modernize your bookkeeping and improve transparency. That helps us ensure your transactions are entered accurately and on time to give you confidence in your decisions. Without access to accurate financial reports and expert financial guidance, your organization will never be prepared for what’s coming next. Unlike vertical structures, this structure facilitates communication between and among all staff. A circular structure can promote communication and collaboration but can also be confusing, especially for new employees, because there is no clear chain of command.

Auditing and Accounting Services

Filing the annual Form 990 is a key aspect of nonprofit accounting, and one that can’t be overlooked. Form 990 is the annual tax form that tax-exempt (e.g. 501(c)3) organizations are required to file each year to remain compliant with the regulations and requirements set by the IRS. This nonprofit accounting statement breaks down the operating, financing, and investing activities to show how cash moves at the organization. You can easily see how your nonprofit uses the funding it receives from fundraising, grant seeking, and other revenue streams by analyzing this statement. Once you’ve got your bookkeeping system setup and have started generating financial statements, the final piece of the nonprofit accounting puzzle is getting your tax obligations straight.

Best for Managing Large, Global Nonprofit Financials

QuickBooks gives nonprofits the ability to perform basic nonprofit accounting functions. Quicken offers plans ranging from $3.99 to $10.99 per month (billed annually and offered at a promotional discount for the first year). For nonprofits, its most relevant plan is the $5.50 Quicken Classic Business & Personal plan (normally $10.99). This plan offers the ability to create multiple budgets for different projects, track projected cash flow, pay bills, generate check payments, capture receipts, track taxable expenses and generate business and tax reports. All Xero plans offer reporting, payment acceptance, file storage, contact management, tax calculations and the ability to connect Xero to a bank account.

Is there a nonprofit version for QuickBooks online?

Building relationships and trust to cultivate consistent donations can go a long way toward hitting fundraising goals in a given year. QuickBooks offers a discount on its QuickBooks Online software through TechSoup. This version of QuickBooks Online offers the accounting features and functionality nonprofits need, including the ability to manage nonprofit finances, file Form 990 and file taxes. NetSuite’s accounting software offers accounts receivable and payable, cash management, fixed asset management, a general ledger and tax management solutions. When we contacted a sales representative for a starting price, we were told there is no set starting price as each solution is uniquely catered to the NetSuite client. While Wave offers free plans, its payroll (tax services), transactions and bookkeeping and accounting support cost extra.

To Hire or Outsource for Nonprofit Accounting

Just like the statement of financial position, the statement of activities keeps net assets that have conditions and stipulations attached to them separate from unrestricted funds. When you reconcile your bank accounts, all you’re doing is comparing each transaction from your bank statement with the ones you have in your books. We recommend doing a bank reconciliation at least once a month to make sure your books are up to date and accurate, to help track cash flow, to prevent fraud and to detect bank errors. Every nonprofit has different financial and accounting needs; the best nonprofit accounting service providers know that.

• Customer relationship management software can benefit virtually any department at your company, from sales to service, to IT, to marketing, and more.
• Bookkeeping involves recording and analyzing a nonprofit’s financial transactions to ensure compliance with state and federal accounting rules.
• Read more about the various forms available and learn about filing deadlines and penalties for non- and late filings.
• Executive directors oversee all aspects of a nonprofit organization, including marketing and promotion, fundraising, program development, human resources and finances.
• If you are still determining what kind of structure to use, this organizational structure can be an excellent place to start.

Aside from these specifications, nonprofits have a few other unique accounting considerations. They’re often tax-exempt (if they’re approved with this status by the IRS), and this status comes with annual reporting and filing requirements. Organizations in the nonprofit space know just how specialized, impactful, and crucial their work is. These organizations function far differently than for-profit businesses, and many of their processes and procedures differ.

Nonprofit Accounting Best Practices

Unfortunately, while Aplos’s nonprofit features stand out, its accounting features are more limited. Only the customized plan includes in-depth income and expense tracking, budgeting by project or fund, asset tracking, and recurring transactions. Wave’s free invoicing tools offer the ability to send customized and branded invoices and automated payment reminders.

• Unlike traditional accounting for businesses, a CPA for nonprofits needs to be highly specialized, and requires a strong knowledge of non-profit reporting, exemptions, and budgeting.
• Even though there are cheaper programs for nonprofits, QuickBooks Enterprise Nonprofit is a perfect match for organizations that need comprehensive accounting services.
• If you’re trying to balance a nonprofit budget on, well, a budget, Xero, Zoho Books, and FreshBooks are cheaper options, and Wave Accounting is completely free.
• The difference between the balance sheet and the statement of financial position is that, because nonprofits don’t technically have any owners, the statement of financial position doesn’t have any equity on it.
• A CRM brings your teams together, sharing information that makes everyone’s job easier.

Her work has been featured by business brands such as Adobe, WorkFusion, AT&T, SEMRush, Fit Small Business, USA Today Blueprint, Content Marketing Institute, Towards Data Science and Business2Community. Internal controls accounting services for nonprofit organizations don’t mean that you don’t trust your organization’s staff members. Use of ANAFP’s website, resources, publications, tools, materials, and email lists are subject to ANAFP’s Terms of Use and Privacy Policy.

Importance of Nonprofit Donor Management

If you’re searching for accounting software that’s user-friendly, full of smart features, and scales with your business, Quickbooks is a great option. The more transactions your nonprofit makes, the more often you should reconcile your bank statements. You might start by reconciling every time you receive a bank statement (usually once a month), then schedule additional time as the size and quantity of your transactions grow.