Nonprofit Bookkeeping & Accounting For Dummies (For Dummies (Business & Personal Finance))

Title Page
Copyright Page
Table of Contents
Introduction
	About This Book
	Foolish Assumptions
	Icons Used in This Book
	Beyond the Book
	Where to Go from Here
Part 1 Accounting and Bookkeeping Nonprofit-Style
	Chapter 1 Introducing Nonprofit Bookkeeping and Accounting
		Getting Started with Your Nonprofit’s Books
			Identifying the difference between bookkeeping and accounting
				Bookkeeping
				Accounting
			Picking your accounting method
			Understanding the basic terms
				Classifying your transactions
				Considering the transaction methodology
				Keeping a journal
				Logging debits and credits
			Adhering to GAAP and GAAS
			Keeping a paper trail
		Making Sure Your Books Are Balanced
			Establishing a chart of accounts
			Tracking transactions
			Developing a budget
			Being compliant
		Finding Out about Federal Grants
			Gleaning some grant basics
			Following the rules
			Going through a grant audit
		Paying Federal Taxes
		Getting a Grasp on Financial Statements
	Chapter 2 Starting with Basic Bookkeeping and Accounting
		Understanding Accounting and Bookkeeping
			Outlining the differences between accounting and bookkeeping
			Defining common financial terms
				Grasping assets, liabilities, and net assets
				Eyeing nonprofit revenue and expenses
				Identifying cash flows and operating budgets
				Getting a hold on debits and credits
				Adhering to generally accepted accounting principles
		Choosing Your Accounting Method
			Keeping track of the cash
			Maintaining accrual-based books
			Introducing fund accounting
		Running Numbers on Your Assets
			Booking assets
			Learning about depreciation methods
				Choosing declining balance depreciation
				Going with straight-line depreciation
				Selecting double-declining balance depreciation
		Keeping an Eye on Your Assets
			Protecting your nonprofit’s physical assets
			Setting internal controls
				Establishing checks and balances
				Separating employees’ duties
				Insuring or bonding nonprofit employees
	Chapter 3 Introducing Financial Statements
		Explaining the Importance of Financial Statements
			Seeing the benefits of tracking the money
			Using the financial statements
				Internal users
				External users
		Using Financial Statements to Your Advantage
			Assisting with grant proposals
			Tracing donations
			Following nonprofit activities
			Identifying contingent liabilities
		Identifying the Financial Statements
			Reading the statement of activities
			Working with the statement of financial position
			Developing the cash flow statement
			Grasping the statement of functional expense
			Documenting the notes to the financial statements
	Chapter 4 Keeping Accurate Accounting Records
		Going the Manual or Computer Route
		Creating a Manual System
			Discussing the pros and cons
			Walking through the parts of a manual system
		Using Spreadsheet Programs
			Breaking down the spreadsheet
			Converting your manual system to a spreadsheet
		Exploring Nonprofit Software Programs
			QuickBooks
			Aplos
			ACCOUNTS
		Making Sure Your System Is Secure
			Maintaining data integrity
				Firewall
				Antivirus software
			Limiting user privileges
			Backing up your system
Part 2 Balancing Your Nonprofit’s Books
	Chapter 5 Setting Up the Chart of Accounts for Nonprofits
		Identifying and Naming Your Nonprofit’s Main Types of Accounts
			Accounting for assets
			Labeling liabilities
			Explaining net assets
			Calculating the change in net assets
			Recording revenue
			Booking costs
		Assigning Numbers to the Accounts
	Chapter 6 Recording Accounting Transactions
		Explaining the Recording Process
			Choosing your basis of accounting
			Eyeing the specifics of the process
			Looking at the two sides of a transaction
		Stepping Through the Accounting Cycle
			Recording journal entries
			Posting to the general ledger
			Reaching the trial balance
			Adjusting entries
			Correcting errors
				Making a journal correction
				Making a ledger correction
	Chapter 7 Keeping Tabs on Your Checking Account
		Getting the Lowdown on Your Checkbook Register
		Tracking Nonprofit Donations
			Discussing donation methods
				Cash donations
				Donations made by check
				Credit card donations
				Direct bank draft donations
				Grants
			Entering donations in your register
		Subtracting Your Expenses
			Adjusting the checkbook register
			Identifying common expenses
			Recording direct or automatic bank drafts
		Balancing the Checkbook
			Using the bank statement
			Considering outstanding checks
			Finding and addressing errors
	Chapter 8 Starting with Manual Bookkeeping
		Suggesting a Manual Bookkeeping Shopping List
		Walking Through Journals
			Recording in cash journals
				Cash receipts journal
				Cash disbursements journal
			Entering to the sales and purchases journals
				Sales journal
				Purchases journal
			Using the general journal
		Showing Examples of Common Nonprofit Journal Entries
			Booking donor transactions
			Recording expenditures
			Posting to the general ledger
			Adjusting prior entries
			Dealing with net assets
		Incorporating Spreadsheet Programs
			Walking through the spreadsheet
			Converting manual records into a spreadsheet
			Setting up financial reporting templates
	Chapter 9 Advancing into Nonprofit Accounting Software
		Choosing Accounting Software
		Using QuickBooks for Nonprofits
			Considering the pros and cons
			Customizing QuickBooks for nonprofits
				Company type
				Donor type
			Configuring classes, and tags
			Providing examples of QuickBooks journals, ledgers, and reports
				Walking through a journal and entries
				Showing a partial general ledger
				Laying out financial reporting
		Selecting Aplos Fund Accounting Software
			Weighing the pros and cons
			Walking through reporting layers
				Chart of accounts
				Check register
				General journal
				Accrual accounting options
				Donor tools
			Budgeting by fund or tag
			Allocating costs
		Selecting ACCOUNTS
			Discussing advantages and disadvantages
			Recording income and expense
			Tracking fund balances
			Creating financial reports
	Chapter 10 Balancing Cash Flow with an Operating Budget
		Understanding the Importance of Having a Budget in the Nonprofit World
		Preparing to Create an Operating Budget
			Setting clear guidelines
			Identifying your nonprofit’s objectives
			Making and prioritizing goals
				Organizational goals
				Individual program goals
			Staying organized
				Use a detailed calendar with time frames and deadlines
				File all paperwork in a timely manner
				Throw away what you don’t need
				Outline your tasks
		Coming Up with an Operating Budget
			Walking through the steps to the budget
				Step 1: Prioritize and determine the need
				Step 2: Make a list of everything coming in and going out
				Step 3: Separate actual income versus projected income
				Step 4: Compare income to expenses and make adjustments as necessary
			Getting your budget approved
		Reviewing Budget Performance
			Establishing a budget task group
			Making adjustments
Part 3 Accounting for Nonprofit Situations
	Chapter 11 Introducing Federal Grants
		Grasping Why Federal Grant Money Is Important to Nonprofits
		Spelling Out the Basics
			Defining a federal grant
			Finding and applying for federal grants for your nonprofit
			Documenting where the money goes
		Managing Federal Grant Money
			Outlining administrative requirements
			Determining costs
			Understanding audit requirements
		Working Through the Details of Your Grant Agreement
			Summarizing the grant budget
			Knowing the due dates for financial status reports
			Indicating special conditions
			Keeping the award/project period in mind
			Treating program income
			Figuring your indirect cost rate
			Matching federal and nonprofit shares
	Chapter 12 Tracking and Accounting for Federal Dollars
		Understanding Your Obligation
		Managing Grant Funds
			Maintaining a separate budget for your grant dollars
			Making changes to your grant
			Handling the responsibility of subgrantees
				Creating the grant agreement for subgrantees
				Monitoring and verifying subgrantees’ reports
		Drawing Down Federal Dollars
			Transferring grant money
			Tracking the electronic transfer
			Knowing when to request a drawdown
		Reporting Requirements
			Preparing the required financial status reports
				Filling out SF-425
				Learning when to use SF-425a
				Submitting SF-425
			Explaining other post-award forms
			Reporting your progress
				Completing your progress report
				Submitting your progress report
		Closing Out a Grant
	Chapter 13 Staying in Nonprofit Compliance
		Understanding Why Being Compliant Is Important for Your Nonprofit
		Staying in Compliance
			Registering with the proper state authority
			Accounting for nonprofit activities
			Hiring professional help
			Abiding by IRS statutes
		Finding Out about Accounting Standards
			Following FASB standards
				ASC 958-205-05, Not-for-Profit Entities: Presentation of Financial Statements
				ASC 958-205-55, Not-for-Profit Entities: Implementation Guidance and Illustration
				ASC 958-605-25-5A, Not-for-Profit Entities: Revenue Recognition – Contributions
				ASC 958-360-35, Not-for-Profit Entities: Depreciation
			Using GAAP
			Sorting out the Sarbanes–Oxley Act
				Selecting an audit committee to hire an independent CPA
				Requiring a signed financial statement
	Chapter 14 Preparing for an Audit
		Understanding the Audit Purpose and Need
			Explaining the difference between an independent and grant audit
				Independent audits
				Grant audits
			Introducing internal and external auditors
			Obtaining a financial statement opinion
			Receiving grant audit findings
		Walking Through the Independent Audit Process
			Planning and design
			Calculating audit risk
			Doing analysis
			Gathering final evidence and issuing the report
		Identifying the Types of Grant Audits
			Conducting a desk audit
			Setting up the site visit
			Gearing up for oversight audits
				Single audits
				Inspector general audits
		Getting Ready for the Auditor
			Preparing the books and records for audit review
			Tracking all grant expenses
			Showing proper cash management
			Minimizing cash on hand
			Segregating duties through internal controls
		Receiving the Report of Audit Findings
			Classifying the audit finding
			Following the corrective action plan
		Discussing an IRS Examination
	Chapter 15 Accounting for Payroll and Payroll Taxes
		Setting Up Payroll Accounts for Nonprofit Employees
		Deducting the Right Amount of Taxes
			Receiving Form W-4 from the employee
			Using Form W-4 as the employer
			Deducting FICA
			Considering salaries and wages
			Adding in overtime and cash advances
		Calculating Specific FICA Payroll Taxes and Deductions
		Paying Quarterly Payroll Taxes with Form 941 and Electronic Funds Transfer
			Completing Form 941
			Filing Form 941
			Accessing the EFTPS to make tax deposits
		Completing End-of-Year Forms
			Filling out the W-2
			Filling out the W-3
			Knowing where to send the W-2s and W-3s
		Accounting for Contract Employees Using Form 1099-NEC
	Chapter 16 Doing the Accounting for Tax Form 990
		Choosing the Right Tax Form
		Knowing What Happens If You Don’t File in a Timely Manner
		Understanding the Minimal Requirements Using Form 990-N
		Qualifying to Use Form 990-EZ
		Filing with Form 990
			Walking through Form 990
			Submitting Form 990
		Completing Form 990-T (Reporting Unrelated Business Income)
Part 4 Wrapping Up the Books
	Chapter 17 Analyzing the Statement of Activities
		Understanding the Statement of Activities
			Booking revenue
			Recording expense
			Classifying gains and losses
		Evaluating the Data
			Analyzing revenues and expenses
			Determining change in net assets
			Using the statement to make comparisons
				Seeing how the numbers compare over time
				Comparing your nonprofit to other nonprofits
			Understanding what this statement doesn’t show
	Chapter 18 Reporting Financial Position
		Grasping What the Statement Says about Your Nonprofit
		Creating the Statement of Financial Position
			Understanding the statement’s structure
			Classifying assets
				Current assets
				Long-term assets
				Net fixed assets
				Total assets
			Breaking out liabilities and net assets
				Current liabilities
				Long-term liabilities
				Net assets
				Restricted net assets
				Unrestricted net assets
				Total liabilities and net assets
		Evaluating the Numbers
			Calculating working capital
			Figuring a debt-to-equity ratio
	Chapter 19 Eyeing the Statement of Cash Flows
		Seeing What the Statement of Cash Flows Can Tell You about Your Nonprofit
			Using the statement to track cash
			Making decisions based on the statement
		Understanding How to Create and Use a Statement of Cash Flows
			Getting the statement started
			Identifying the parts of the statement
			Doing the math
				Operating activities
				Investing activities
				Financing activities
		Analyzing Cash Flow Indicators
			Calculating the operating cash flow ratio
			Determining free cash flow
	Chapter 20 Organizing the Statement of Functional Expense
		Classifying Functional Expense
			Keeping track of time
			Allocating expenses
				Program expenses
				Management and general expenses
				Fundraising expenses
		Using the Statement of Functional Expense to Calculate Ratios
			Calculating the program spending ratio
			Determining the fundraising efficiency ratio
	Chapter 21 Closing the Nonprofit Books
		Understanding the Need to Close Your Nonprofit’s Books
		Adjusting, Closing, and Reversing Entries
			Making year-end adjusting entries
			Finalizing with closing entries
			Reversing entries to close temporary accounts
		Completing the Notes to the Financial Statements
			Explaining changes in accounting methods
			Noting all lawsuits
			Including all contingent liabilities
			Noting conditions on assets and liabilities
		Putting Last Year Behind You and Looking Forward
Part 5 The Part of Tens
	Chapter 22 Ten Important Things to Know When Keeping a Nonprofit’s Books
		Monitoring Cash Contributions
		Keeping a Donors List
		Balancing Your Nonprofit’s Checkbook
		Leaving a Paper Trail
		Protecting Your Nonprofit from Employee Theft
		Considering Your Constituency
		Staying in Compliance
		Limiting Nonprogram Income
		Keeping Charities and Politics Separate
		Getting Free Support
	Chapter 23 Ten Tips for Keeping Your Nonprofit Viable
		Keeping Your Books Balanced
		Filing Paperwork with the IRS
		Paying Bills on Time
		Exploring New Fundraising Ideas
		Watching Your Nonprofit’s Bottom Line
		Looking for New Funding Streams
		Getting Grant-Writing Training
		Obtaining an Independent Audit Opinion
		Updating Communication Strategies
		Attending Networking Activities
Index
EULA