I have a new client that is a nonprofit and even though I aced the class I took in college, I am wondering if there are the big differences between doing work for a profit and a nonprofit. First thing comes to mind is how important budgeting is and keeping costs down. Secondly the decision to employ cash vs accrual accounting. For a small non-profit, I think cash accounting is better, if only the volume of transactions is low and there is very little for accruals. Anyway, I found a good guide for nonprofit financial management on the Alliance For NonProfit Management website.
Keeping Nickels
But Don’t Take Any Wooden Ones…
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Recent Comments
June 29, 2007 at 6:38 am |
Hi Nichelle,
I think there’s quite a huge difference between profit & non-profit accounting. Much of it is “cultural” and ingrained into how the organisation sets it’s priorities. A non-profit org might have conflicting priorities, whereas a commercial one is (hopefully) united in a profit motive. It depends on the size of the organisation, too. When I worked in public sector, the budget was key (both setting it and then managing it). But I agree that for a small charity, cash accounting might be more relevant during the year. In the UK there are differences in the statutory year end accounts for charities, nonprofit and public sector orgs, I presume it’s the same in the States??
Personally, I love both profit & non-profit accounting, I think you are very fortunate to be able to service such a range of clients. Good luck with your new client.
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