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accounting outsourcing is good for non-profit organizations
June 01, 2007
are in constant scrutiny and inspection by government regulations
and inspectors accordingly. Just like any other type of business,
non-profit accounting systems require the use of basic accounting
records such as journals, ledgers, etc.
The goal of a non-profit
accounting system is to make sure financial data is properly entered
into accounting records in order to prepare accurate financial reports
according to dead lines.
The description given
above may result very similar to 'for-profit' accounting systems
but there are some key differences which change the way an accounting
system for non-profit organizations work such as: Expense classification,
capitalizing and depreciating assets, modified cash basis accounting
and accounting for contributors. This last procedure may sound familiar
since many non-profit organizations need contributors who will allow
for such operation to keep working.
Pledges, donation of
materials and services, membership dues and special events change
the way an accounting system must work for non-profit organizations.
Because of these key differences it is important to select the right
accounting firm and platform, financial advisor and internal auditor
carefully due to the fact that many resources donated to the organization
such as property and equipment may be covered by government regulations.
This is where a specialized accounting firm or platform must come
The differences between
accounting firms and specialized non-profit platforms lies in the
fact that full charge accounting firms are quite expensive compared
to software platforms.
Before assessing whether
or not your organization needs the help of a full charge book keeper
or an automated platform it is important to establish the features
and benefits each one should offer such as: increased efficiency,
better control, timely reports, lower costs and offer great accuracy.
Many non-profit operators
may ask why is it necessary to use such services instead of just
entering all the data into spreadsheet applications such as Microsoft
excel?. The answer is simple, such applications do not offer many
controls and security features and data can be easily changed which
may compromise the integrity of financial reports.
Using tools such as Microsoft
Access which allows operators to manage databases are not completely
adequate for non profit organization accounting management since
they lack the ability to organize financial reports with the data
it holds and many non-profit organizations rapidly outgrow the capabilities
these software applications provide.
The most efficient way
to complete all these complex tasks is to work with the right software
which will provide all the features such organizations need as established
above. That is why outsourcing non-profit organizations accounting
using the right platform proves to be extremely cost-effective.
outsourcing online platforms allow organizations get all the benefits
of a full charge accounting plan without the need to hire an in-house
accountant/book keeper, it also provides vital services such as:
controller services which help avoid and detect fraud to keep the
organization in compliance, financial software and implementation,
non-profit tax return preparations using forms 990/990PF, pre-audit
engagement service, tax exempt application filings for single or
group organizations, financial policies preparation, grants writing
and fund raising campaign service, Form PC filling with public charity
of the Attorney General's Office.
A great example
of such service can be found at the Accountiviti
web site which covers all the important aspects of non-profit online
Whether non-profit organization
managers decide to work with an in-house accountant or a fully developed
online accounting outsourcing platform, it is necessary to keep
in mind that compliance with regulations, security and efficiency
must always be present in any accounting service.
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