From time to time, we share previous content that has enduring significance for nonprofit organizations. The following blog post was originally published on 5/19/17 and has been lightly refreshed.
While the underlying financial concepts are similar, there are significant differences between accounting for nonprofit organization versus for-profit companies. Some of these differences are major - like the functional expenses and restricted contributions tracked by nonprofits. Others differences are more subtle. For example, a statement showing your assets, liabilities, and the difference between the two is commonly known in the for-profit world as a “balance sheet.” But for nonprofits, this is called your Statement of Financial Position. Minor difference? Sure, but if your accountant constantly asks to see your balance sheet instead of your Statement of Financial Position, that could be a sign that they’re not familiar or comfortable with nonprofit accounting.
Use this handy infographic to help you remember some of the key accounting differences between nonprofits and for-profits. From net assets to retained earnings, the Nonprofit Versus For-Profit accounting guide gives you a quick way to brush up on your accounting lingo and get comfortable in the nonprofit financial environment.
