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3 Helpful Accounting Tips For Nonprofits


Accounting can be tricky for any business, but for nonprofits, it can be even more challenging. Many unique rules and regulations exist, and it is sometimes tough to keep up with all of them. These quick tips will help to keep you and your nonprofit up to speed.
Purchase Accounting Software Intended For Nonprofits
This may seem like a no-brainer, but purchasing software that is intended for nonprofits is an easy way to organize your accounting work. Popular accounting software solutions for nonprofits are Abila MIP advance, Blackbaud’s Financial Edge and NetSuite. Nonprofits operate differently than regular for-profit businesses, and cannot be treated the same way when it comes to accounting. Using software that isn't specifically for nonprofits can make your job harder to do and waste precious time.
Have Realistic Fundraising Goals
Fundraising is a critical part of nonprofit livelihood, but it is important not to overreach when forecasting your earnings. If you work for a nonprofit that supports an amazing cause that you're truly passionate about, it is easy to get overly excited and set high projections that are unrealistic. Do not be afraid to underestimate your earnings. After all, isn't it more fun to raise more money than estimated, anyway? 
Understand Your Tax Obligations
As a nonprofit organization, you do not need to pay federal income taxes if you have qualified for tax-exempt status. However, it is imperative that you keep accurate records of your financial data so that you can report your expenses and revenue to the IRS. Having tax-exempt status does not mean that you are exempt from all tax obligations.
Accounting for a nonprofit organization can be difficult, and making even a small mistake can be devastating. As long as you have a strong understanding of nonprofit accounting practices and the latest rules and regulations, you will be able to perform accounting duties successfully.
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