Questions about Bookkeeping for a non-profit social organization

Posted by NoSpam on August 24, 2008, 3:32 pm

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On Sun, 24 Aug 2008 04:45:14 -0500, "aps" <> wrote:

>>On Thu, 21 Aug 2008 06:15:52 -0500, "aps" <> wrote:

>>>

>>>>We're recently elected treasurer of a local social organization and =

are

>>>>being hassled by some accounting types as to how to present financial=

=20

>>>>data

>>>>to the group. The argument is that we are not following GAAP =

precisely

>>>>and are doing things like:

>>>>(a) reporting P&L and Balance Sheet with mid-month ending dates,

>>>>(b) reporting expenses for events where there has been no income for =

the

>>>>current fiscal year,

>>>>(c) reporting certain pass-thru donations as "Other Income"

>>>>

>>>>The organization has been doing accrual accounting via QuickBooks for=

the

>>>>last several years. However, there is no payroll, no inventory, no

>>>>customers, no taxes, no receivables, and rarely an accounts payable =

type=20

>>>>of transaction.=20

>>>>

>>>>We feel like our mission is to handle the organization's finances =

with

>>>>care, according to an approved budget, and to provide the members a =

clear

>>>>view of the finances.

>>>>

>>>>So my questions are:

>>>>(1) are items (a),(b),(c) above worth worrying about in our =

situation?

>>>>(2) should we be doing cash accounting instead of accrual accounting?

>>>>

>>>>Thanks in advance for your advice!

>>>

>>>For most non-profits the cash basis of accounting is preferred. The=20

>>>accrual basis really serves no purpose for a non-profit because cash=20

>>>receipts and disbursements is the correct name for a non-profit as =

opposed=20

>>>to Profit and Loss. You state you have members and it is a social =

organization. =20

>>>The key should be to keep the financial records as simple as possible =

so=20

>>>everyone concerned understands and the cash basis certainly does that.

>>Thanks for your reply. It reinforces our conclusions exactly but there=

are

>>some accounting types in the group that have been adamant about what =

our

>>financial reports should look like. We like your renaming of the P&L -

>>makes perfect sense.

>>Your response is so good we going to quote you directly.

>>Thanks again.

>NP, glad to help. One more thing that helps also. When you do your "Cash=

Receipts=20

>and Disbursments" statement, below the detailed income and receipts it =

helps the=20

>users (recipients) to further understand the cash position of the =

organization if you will=20

>include the line, "Increase (Decrease) in Cash" for the reporting =

period. Assuming it is=20

>cash receipts and disbursements for August 31, 2008, You would include a=

line below=20

>the increase of decrease in cash entitled "Cash Balance, July 31, 2008" =

then on the=20

>next line, "Cash Balance, August 31,2008 to reconcile to your actual =

cash balance=20

>that ties to your checking account balance at the August EOM =

(end-of-month)=20

>reporting period.

>David Bemiss (Accountax Pro Svcs)

Interesting format, showing the checking account reconciliation. I =
assume
to do that in QB would require a special footer as apposed to a memorized
report that would automatically show it(?). I know I could export a QB
report to Excel and enter more comments and data but I would like to
automate the reporting process. Am I missing some QB reporting options
that would make your format easy?

Actually we had planned to make financial reports available that showed
"Fiscal YTD Receipts and Disbursements vs Budget" along with a separate,
current Balance Sheet.

We plan to have financial reports available at the organization's website
asrda.org but presently we have the starting financial reports at
asrda.info.

Thanks again DB for your advice!

Loren

Posted by aps on August 24, 2008, 7:21 pm

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>On Sun, 24 Aug 2008 04:45:14 -0500, "aps" <> wrote:

>>>On Thu, 21 Aug 2008 06:15:52 -0500, "aps" <> wrote:

>>>

>>>>

>>>>>We're recently elected treasurer of a local social organization and =

>are

>>>>>being hassled by some accounting types as to how to present financial=

>=20

>>>>>data

>>>>>to the group. The argument is that we are not following GAAP =

>precisely

>>>>>and are doing things like:

>>>>>(a) reporting P&L and Balance Sheet with mid-month ending dates,

>>>>>(b) reporting expenses for events where there has been no income for =

>the

>>>>>current fiscal year,

>>>>>(c) reporting certain pass-thru donations as "Other Income"

>>>>>

>>>>>The organization has been doing accrual accounting via QuickBooks for=

> the

>>>>>last several years. However, there is no payroll, no inventory, no

>>>>>customers, no taxes, no receivables, and rarely an accounts payable =

>type=20

>>>>>of transaction.=20

>>>>>

>>>>>We feel like our mission is to handle the organization's finances =

>with

>>>>>care, according to an approved budget, and to provide the members a =

>clear

>>>>>view of the finances.

>>>>>

>>>>>So my questions are:

>>>>>(1) are items (a),(b),(c) above worth worrying about in our =

>situation?

>>>>>(2) should we be doing cash accounting instead of accrual accounting?

>>>>>

>>>>>Thanks in advance for your advice!

>>>>

>>>>For most non-profits the cash basis of accounting is preferred. The=20

>>>>accrual basis really serves no purpose for a non-profit because cash=20

>>>>receipts and disbursements is the correct name for a non-profit as =

>opposed=20

>>>>to Profit and Loss. You state you have members and it is a social =

>organization. =20

>>>>The key should be to keep the financial records as simple as possible =

>so=20

>>>>everyone concerned understands and the cash basis certainly does that.

>>>

>>>Thanks for your reply. It reinforces our conclusions exactly but there=

> are

>>>some accounting types in the group that have been adamant about what =

>our

>>>financial reports should look like. We like your renaming of the P&L -

>>>makes perfect sense.

>>>

>>>Your response is so good we going to quote you directly.

>>>

>>>Thanks again.

>>NP, glad to help. One more thing that helps also. When you do your "Cash=

> Receipts=20

>>and Disbursments" statement, below the detailed income and receipts it =

>helps the=20

>>users (recipients) to further understand the cash position of the =

>organization if you will=20

>>include the line, "Increase (Decrease) in Cash" for the reporting =

>period. Assuming it is=20

>>cash receipts and disbursements for August 31, 2008, You would include a=

> line below=20

>>the increase of decrease in cash entitled "Cash Balance, July 31, 2008" =

>then on the=20

>>next line, "Cash Balance, August 31,2008 to reconcile to your actual =

>cash balance=20

>>that ties to your checking account balance at the August EOM =

>(end-of-month)=20

>>reporting period.

>>David Bemiss (Accountax Pro Svcs)

>Interesting format, showing the checking account reconciliation. I =

>assume

>to do that in QB would require a special footer as apposed to a memorized

>report that would automatically show it(?). I know I could export a QB

>report to Excel and enter more comments and data but I would like to

>automate the reporting process. Am I missing some QB reporting options

>that would make your format easy?

>Actually we had planned to make financial reports available that showed

>"Fiscal YTD Receipts and Disbursements vs Budget" along with a separate,

>current Balance Sheet.

>We plan to have financial reports available at the organization's website

>asrda.org but presently we have the starting financial reports at

>asrda.info.

>Thanks again DB for your advice!

>Loren

Not to my knowledge, but you can export the report to Excel and add these
features
ver easily, then simply memorize it in QB each YTD report you run. Positive and
negative variance analysis comparing actual to budget can be of importance too,
especially in determining how funds are raised for the organization. I don't
want to get
too technical here but yes, it can be done and put on your site in a .pdf format.