Nonprofit Accounting

Proper accounting records are the foundation of a well-run nonprofit organization. Accurate accounting can assist the organization in serving the members in a streamlined way, including helping the organization operate effectively, ensuring accountability, and facilitating accurate and timely reports. If you’re struggling with maintaining financial and accounting records for your nonprofit organization, you should consider using Numerico’s specialized nonprofit accounting services.

With decades of experience, we offer reliable, professional accounting services geared to drive your organization’s financial stability, sustainability, and continued growth. Without proper accounting for nonprofits, you might end up making costly mistakes that would derail the achievement of your goals. Below are the foundational parts for nonprofit accounting.

What Is a Nonprofit? 

A nonprofit is a business that holds a tax-exempt status granted by the IRS because it pursues a social cause and offers a public benefit. It’s also known as a not-for-profit organization, nonprofit institution, or non-business entity.

Several types of nonprofit organizations exist under U.S. law. The Internal Revenue Service’s 501(c) code defines two primary types of nonprofits:

• A nonprofit organization (NPO)
• Not-for-profit organization (NFPO)

NPOs benefit the public through goods and services, whereas an NFPO may serve only a group of members. These 501(c) (3) organizations are corporations, foundations, or funds that operate for religious, charitable, literary, scientific, or educational purposes.

Generally, a nonprofit has no ownership interests and gets most of its funds from third parties that don’t expect returns. These organizations are usually accountable to the founders, donors, volunteers, beneficiaries, and the public community.

Nonprofit Accounting Basics—Numerico, Livonia, MI

Nonprofit accounting refers to the unique way of recording and reporting a nonprofit organization’s financial transactions. It employs various concepts that differ from accounting in a for-profit business. The accounting for nonprofits focuses on accountability while accounting for a for-profit entity focuses mainly on profitability.

In a nonprofit balance sheet, we focus on net assets instead of equity since nonprofits have no investors to take an equity position. A nonprofit’s financial statements differ in several aspects from those of a for-profit business. The report of activities takes the place of the income statement, and the statement of financial position takes the place of balance sheets.

Therefore, it’s essential to work with a qualified nonprofit accountant when it comes to accounting for nonprofits.

Nonprofit Accounting Services—Numerico, Livonia, MI

Maintaining timely and accurate accounting records for a nonprofit can be time-consuming, and the rules are complex, especially if you’re not a qualified accountant. Accounting firms for nonprofits, such as Numerico in Livonia, MI, make things easier with professional services like:

• Bookkeeping: Numerico has a team of certified nonprofit accountants who will work with you to help you understand your organization’s financial health and how it affects your cause and growth. Our bookkeeping consultancy will help you make reliable, informed business decisions for your organization. 

• Nonprofit Structuring: A nonprofit can experience many changes and turnovers in a single calendar year. Numerico can help you set up systems and processes to ensure you don’t lose crucial financial information, deadlines, passwords, and other critical data during transition periods.
• Tax Preparation: Nonprofits hold tax-exempt status, but usually exceptions to the rule exist. With an in-depth understanding of the nonprofit tax regulations, Numerico offers top-notch service to ensure you follow all laws.

Numerico—Your Nonprofit Accounting Experts in Livonia, MI

Proper management of financial records is vital to the sustainability of a nonprofit organization. However, most nonprofits don’t have the resources and time to manage their accounts properly. At Numerico, we focus on helping nonprofits keep track of their accounts so they can focus on their core business.

We’ve been offering reliable nonprofit accounting services in Livonia, Canton, Ann Arbor, Dearborn, and the surrounding areas for more than four decades. With Numerico, you can rest easy that you’re being served by the best.

For personalized nonprofit accounting services, please contact us at (313) 278-8030 to schedule a consultation.