As a charity or nonprofit organisation, your primary goal is not to obtain profits; you still need finances to keep you running. Without organised books, you might not properly manage the finances you need to help your charity’s cause. Besides that, nonprofits and charities are tasked with proving where and how the gift aid and donor support are spent.
For that, you must have strong bookkeeping practices.
Most charity organisations choose a treasurer or charity accountant to oversee all of their funds. And for good job performance, the treasurer makes use of specific tools. As we can all see, utilising a personal bank account or maintaining files full of receipts won’t cut it.
Bookkeeping is the practice of recording business transactions such as sales and costs. You can monitor the income and expenses of your organisation using this technique to see how well it is performing.
Additionally, bookkeeping allows you to put together the required financial accounts for taxes.
These are simple tasks on the surface. However, bookkeeping is complicated and stressful. It is tedious work, and if you are a CEO or founder of a charity without staff or a financial expert, it can be overwhelming as well. Because of ongoing fundraising demands, staff shortages, and project deadlines, it frequently falls to the bottom of the “To Do” list.
All charities need accurate bookkeeping to function properly and survive. This is because clear and meaningful financial reports can only be created using error-free bookkeeping as their foundation. Plus, it is much more crucial for a new charity in the first few years.
And Pearl Lemon Accountants is here to help you with just that. We have qualified specialist charity accountants and bookkeeping professionals that can relieve you of this responsibility so you can concentrate on accomplishing your charity’s goals.
Ready to get started with our services? Give us a call!
The principles and rules of bookkeeping for any charitable organisation are the same as for other for-profit organisations- but with a few slight differences. For a nonprofit or charity, the goal is typically to uphold the beliefs and missions of the organisation while guaranteeing continuous growth and financial health. A for-profit firm aims to maximise profits for the shareholders while delivering a needed service.
At Pearl Lemon Accountants, we know the charity law and the nuances that govern the charity sector. Let’s get into detail about what we will do for you:
The first step in good bookkeeping for nonprofit organisations is to consistently track your costs. Our bookkeeping specialists will keep track of any donations or contributions you get, track expenses (which might be anything), and maintain copies of your invoices and receipts to make it easier to go back and review past transactions when necessary.
Keeping track of these costs and income can be difficult if your personal and corporate finances overlap. That’s why we’re here to assist you. Additionally, we will assist you with budgeting for your organisation and determining when to reduce expenses to deliver more charity.
We will track your charity organisation’s cash flow in addition to documenting transactions. Cash flow is the total sum of money that enters and leaves your organisation during a specific time.
You don’t see your charity’s earnings daily, especially if you give your clients the standard 30 days to settle an invoice. Additionally, if you rely on governmental or external support, the money arrives infrequently.
Even as a nonprofit, you will likely get recurring payments for things like store rent, merchandise, or insurance premiums. It could be difficult to pay for them if there is a lack of cash flow. You may also be aware of any excess cash by regularly monitoring your cash flow and putting together a cash flow statement. This profit can then be used to fund expansion for the benefit of your cause.
Sending and receiving invoices to ensure you collect money is a crucial aspect of bookkeeping for nonprofit organisations. After a transaction or service, charities send customer invoices to request payment.
We will set up a system to assist you in keeping track of your invoices, including those that clients have not yet paid. This will enable you to establish your income to support your cause with your efforts.
Most of your income as a registered charity organisation will be exempt from taxes as long as it is used to support charitable purposes. We will assist you in gathering and maintaining precise financial records and statements for tax purposes that demonstrate where your money goes and that it is tax-exempt.
We will also assist you in creating an income statement or profit-loss statement that details your earnings and expenditures.
The correct accounting software will help you remain on top of your bookkeeping by streamlining the process and saving you time. Managing your finances can be time-consuming and frustrating when you work for yourself.
We’ll locate the ideal accounting software so you can handle all of your financial information in a single place. This will simplify the bookkeeping procedure and allow you time to concentrate on developing your cause. Additionally, the software will enable you to understand your funds better
At Pearl Lemon Accountants, we have certified bookkeepers dedicated to helping charities and nonprofits manage their finances while supporting their growth. Our experts are here to take the guesswork out of running your charity- for good.
Regardless of what you are looking for, we will:
Take the hustle out of your charity’s activities by entrusting your bookkeeping to us.
Contact Us to learn more.
Bookkeeping means recording all business transactions (e.g., sales, purchases, payments, etc.) in the books of prime entry. It is similar to journaling when you record everything that happened throughout the day but in a predefined format. While these records are essential for producing financial statements, this part of the work is primarily routine and must be automated in the accounting department.
Accounting is the process of recording, classifying, and summarising financial transactions. It includes bookkeeping and reporting. Reporting involves analysis, interpreting and summarising financial data and presenting the results in the form of a report.
Bookkeepers perform daily tasks such as (but are not limited to):
Regardless of the organisation’s size, bookkeeping is one of the most critical aspects. It is, by definition, the process of maintaining a business’s financial records.
Typically, bookkeepers are responsible for maintaining your continuous financial records and transactions, which are essential to the efficient operation of your organisation. They are therefore essential for monitoring the development of your company.
Furthermore, precise bookkeeping helps business leaders evaluate and appraise the organisation’s performance immediately and over the long term. This then aids the business owners in deciding what improvements they must make and what areas, along with the standards they must uphold, to keep the company operating at its most productive level.
The best course of action for a business that wants its bookkeeping to be accurate and error-free is outsourcing such services to a firm that focuses on accounting and financial management.
When you allow us to keep track of your finances, you give yourself more time to do your work and please more clients.
It's a win-win situation for everyone.
Aside from that, you'll also gain financial stability because your assets and liabilities are managed well enough not to cause any trouble for you in the future.
So let our experts work for you, and you won't regret it even a bit.
Book a call today to get started.