financial management
What is a zero-dollar line item?
Non-profit operating budgets need to be flexible to respond quickly to changes, especially at year-end. Executive directors struggle to create the perfect annual budget that includes everything the organization wants and needs, while magically finding a way to pay for all of it. Seek...
New program? No problem!
A non-profit executive director has the strategic plan in mind pretty much all the time. As planned programs and services run throughout the year, the ED, usually in partnership with the staff team, will keep a keen eye out for potential additions. These opportunities are the ideas that were...
Year end in 3.. 2..
Executive directors are forced into a complicated little dance during a non-profit’s year end. It starts simple enough, making sure all the invoices are sent out, and all the bills are paid. As a non-profit grows, the accounts become a little more complex, and there might be a bill or two that...
When you can't defend yourself, your work will protect you?
The work of a non-profit executive director leaves a trail. It might be the work we did last year, the work we did three jobs ago, or the work we did when we first started. As our career takes us to different organizations, we might not always be around to answer questions about how we...
I am not the caterer
I remember the programming era pre-COVID, where workshops and gatherings rivalled a red-carpet event. Along with finding the right instructors and the best silliest prizes, we planned elaborate catering and hauled in all our own equipment. As we move to post-COVID home offices the landscape...
It will only hurt for 2 years
It happens. You’re working on a grant application and the computer starts to get a little glitchy. No problem. It’s old. Probably just needs to do an update. You could use a break to stretch and wander over to the staff room to find a snack. 10 minutes later you get back to your desk and,...
A non-profit's guide to online banking
Non-profits have many reasons to embrace online banking (e-banking). It might start with a desire to make faster payments to independent contractors, to encourage easier donations, or simply avoid the time it takes for in-person banking. When an executive director begins to investigate...
Let's keep friendly rivalry, friendly!
Non-profits rely on funding to stay operational. It is rarely enough to have only one funding source. Non-profits will have a collection of funding streams from grants and donations to events and merchandise sales. It will take a lot of people power to keep all the funding programs running and...
The challenges of non-profit HR
Much time is spent reviewing and planning the governing model of a non-profit board of directors letting the operational model of the staff team develop organically, and sometimes a little haphazardly. Limited budgets make choosing the right HR model, critical to achieve goals with the right...
3 steps to keep a non-profit chart of accounts simple...
A chart of accounts is a numbering system to organize a non-profit’s financial transactions. You can compare a chart of accounts to the Dewey Decimal System at your local library, where different groups of books have different number codes. In a non-profit, revenues have different number codes...
Easy Non-Profit Bookkeeping
No one tells a prospective executive director that a big part of running a non-profit is all the accounting. The ED is responsible for recording all the revenue that flows into the organization, all the payments that go out, and to make sure it all balances. No bookkeeper. If a non-profit...
Still using the traditional petty cash box in the boss’s office? How’s that working?
Petty cash is a small pool of money used for incidental expenses. Petty cash is different from a non-profit’s normal bill paying system because it is for much smaller amounts and for items that need to be purchased more occasionally. An example might include buying a couple of stamps at the...
Checklist for an Easier Non-Profit Audit (Because We Aren’t Magic)
Not all non-profits will have an annual audit each year. The legislation for annual financial review will vary from province to province and state to state. Regardless of the complexity of any assessment of a non-profit’s financial records and systems, presenting well organized information is...
When is the Best Year End Date for a Non-Profit
Year end for a non-profit is a busy time. Accounting will need to be wrapped up and the financial files sent off for an audit or financial review. Sometimes it can take several weeks to get all the files tidy and ready to go. Then it can take another few weeks for the auditor to complete the...
Non-Profit Budget Basics
A non-profit budget is a partner to the operational plan. Together they provide the road map for what the organization aims to work on for its operating year. It sounds so simple, but when it comes time to sit down at the computer to create a new budget, that blank spread sheet can make the...
Honest Actual Costs
I want you to compare two scenarios. In example #1, a new executive director is looking at the budget numbers for fundraising events for the last year. She doesn’t understand what she’s doing wrong. The cost for prizes is 25% more than it was in the years when her predecessor planned the...
Understand the Basic Financial Statements for Non-Profits
Each month a non-profit executive director will prepare basic financial statements for the board or finance committee to review. The statements need to be approved following the reporting process outlined in the organization’s policy. It is rare for a board to approve the monthly...
How to Make Non-Profit Deposits Easy and Accurate
Payments and registrations are coming in and, frankly, starting to pile up. People will not be happy if their cheques are not deposited right away. A deposit is needed, and some sort of log is required. Writing up the bank deposit page is only one piece of processing accounts receivable. Each...
5 Decisions Before Issuing Invoices so Everyone Follows the Same Procedure
Welcome back to our two-part series on invoices. There are two kinds of invoices a non-profit will encounter when handling bookkeeping. The first invoice is the one the non-profit receives and needs to pay. We talked about this last week and walked through the 4 steps to verify the purchase...
4 Steps Before Paying an Invoice to Ensure Expenses are Legit
When a volunteer or employee is new to a non-profit, or new to the world of non-profit bookkeeping, the learning curve can be steep, and everything can feel unfamiliar. In our personal lives, its easy to know if we need to pay the plumber, because we are very likely the one who arranged for...
Cover Pages for EVERY Accounting Transaction Creates Transparency
Digital or manual entry, the accounting for a non-profit will always produce a lot of paper. That paper trail will include the details for each financial transaction, be it an expense or revenue. It doesn’t matter how tidy the accounts are, if the supporting paperwork is messy, it will...
Confidently Monitor Non-Profit Accounts
Ah, you’ve become a board member and you are learning the ropes. You joined a committee and recently you put up your hand to be added as a signer for the bookkeeping. The trip to the bank was easy enough, and maybe you thought you’d sign a few cheques, maybe a few deposits, but the signing...
Easy Non-Profit Financial Filing System
It’s a typical non-profit office day and you are working on the accounts. Let’s imagine you’ve paid a bunch of bills, entering each one into your accounting software. Let’s also imagine you’ve opened the mail and there are a few receipts as well as a grant payment. And finally, you create a...
Stale-Dated
Last week we talked about using a spreadsheet to keep track of the accounting for a smaller non-profit. This week let’s talk about a common bookkeeping challenge you might face when working on your non-profit’s accounts, the stale-dated cheque. Regardless of the bookkeeping method you...