Bookkeeping For Nonprofits

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How To Set Up Bookkeeping For Nonprofits

Every nonprofit organization is different, but they all need to understand bookkeeping for nonprofits to stay running. True. Your aim of starting a nonprofit organization is probably not to stare at a spreadsheet all day. There are other activities to do in a nonprofit business, but proper accounting is also important for the success and survival of your organization. Nonprofit organizations are legal entities with a special set of financial requirements and unique modes of accounting language. Running and organizing a small nonprofit is the same as running a small profit business. You may have to file articles and fill forms and documents with the Internal Revenue Service and State Attorney General’s office. Keeping track of your financial books doesn’t have to be that stressful. You may not necessarily have to hire an expert in accounting or bookkeeping for nonprofits. Here, we’ll go over some easy steps to set up a bookkeeping system for your nonprofit organization.

Bookkeeping For Nonprofits Procedure 

#1. Open A Checking Account

This may be an obvious step to setting up your bookkeeping for nonprofit systems. When you finally get your articles of incorporation, it becomes easy to open a checking account for your organization. The main aim of opening one is to separate all personal funds from the organization’s funds. This account should be used to deposit all forms of donations and funds, and can further be used to pay the expenses of the organization. You can always reimburse yourself if you paid for things from your personal account. Be sure to keep copies of the receipts to enable you to clear the expenses and reimbursement. 

#2. Track Your Income And Expenses

There are ways to keep track of your income and expenses:

  • Spreadsheet:

With computer spreadsheets and excel, you can record any deposit and expense in the set appropriate category of the accounts.

  • Accounting Software:

This method is a very easy way to automatically record your accounting. It saves a lot of time and stress and helps to mitigate mistakes. Lots of nonprofits are adopting the use of software for their accounting needs. Opening an accounting system online will also allow you to have free access to your finance books for bookkeepers. 

#3. Create Summary Records

This is the last step in getting your bookkeeping for nonprofit systems together. Summarize your total income and make the necessary subtractions on your expenses to know if you have a surplus or deficit. There are a lot of bookkeepers in almost every community today that can help you set up your bookkeeping systems and track your records every business day. The best and reliable way to find a professional bookkeeper is to ask around at other nonprofit organizations and discover what they do to flourish and grow as a team.


It is important to take your time to start bookkeeping for the nonprofits system. As you grow into fulfilling your mission, donors need to know that you are putting your money to effective use. It has always been a good idea to outsource an accounting expert, but remember that as a leader of the organization, the financial function starts with you. EBookkeeper Group assist nonprofits with this task.

Learn more about our monthly bookkeeping packages!

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