July 24th, 2008 Nancy
An executive director new to her position showed me the QuickBooks set-up she had inherited from her predecessor and his bookkeeper today. The “profit and loss by class” report was four pages wide - in landscape format! It was so wide, you couldn’t really make any sense out of the report. So what good was it really?
QuickBooks has only a few ways to sort data - accounts, classes, and customer:job combinations - and while they are inadequate for many nonprofits’ needs, it’s also true that many people don’t realize how they can best use what QuickBooks has to offer.
The best way to use classes is to set up one for each program (aka activity). Don’t use them for grants or you’ll end up with a monster report like I saw today! Keep your programs to a maximum of five or six, plus the two you’ll need for reporting to the IRS - Management & General and Fundraising. (Those two are quite useful for managing your organization as well.) You can also make good use of a class for your shared cost pool.
If you really can’t be satisfied with five or six classes, you can set up sub-classes. You’ll get a finer level of detail and when you create a P & L by class, you can hit the “collapse” button to get a report that presents the parent classes instead of all that detail.
The real key to elegant reporting is understanding the logical relationships between classes/activities and “natural” accounts so your reports express meaningful summaries of the sources and uses of your organization’s resources.
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July 9th, 2008 Nancy
The IRS has mostly completed its project of revamping the Form 990, the one most nonprofits file each year. It’s now got a main form of eleven pages and a checklist of required schedules with 37 questions on it to determine how many of the possible 18 schedules you’ll need to complete. It’s MUCH longer than the old one.
The good news for accountants, boookkeepers and finance managers who work for nonprofits is that the basic accounting required to complete the form hasn’t changed much. I’ve been digging into the detail lately; you can read my newsletter on the Form 990 at www.NFPAccountingHelp.org - go to Free Resources from the home page.
What about this new form worries you? Have you updated your accounting system to make it easy to pull the numbers you’ll need when you prepare this form? What have you figured out - or not - about the new 990?
Post a comment and tell us about your experience so far!
Nancy
Posted in Form 990-Nonprofit Tax Return | No Comments »
July 8th, 2008 Nancy
Guidestar has over a million 990s available on its website. IRS reports it’s processing about 90,000 applications for tax-exempt status each year. And as far as I can tell, there’s a shortage of qualified bookkeepers and accountants who understand the peculiarities of nonprofit accounting in my city and I’m curious whether that’s the case in other places, too.
Where do you go when you have a question about a new type of transaction? Who do you commiserate with when your executive director asks you to prepare a report or projection by tomorrow and doesn’t understand the complexity of the assignment? Have you found community on-line or in your town?
That’s what I’m hoping to offer here at NonprofitAccountingHelp.org.
Go ahead and introduce yourself - I look forward to talking with you!
Nancy
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