During this time of year, most organizations are thinking about fall, fundraising, and the upcoming winter holidays. Year-end nonprofit accounting might not be the first thing on your mind. But this is the perfect time to make a plan and figure out what needs to get done. Get these tasks scheduled and assigned now, so everyone has plenty of time to wrap up loose items without scrambling at the end of the year.
Most nonprofit organizations will need to file at least one Form 1099 each year. 1099s are due to the payee no later than January 31, so there’s not much time to track down missing information after the holidays. You should be obtaining a signed Form W-9 from applicable vendors throughout the year. Your accountant will need a completed W-9 from each vendor in order to prepare and file your organization’s 1099s. Avoid the dreaded holiday “Out Of Office” responses, and start contacting your vendors for missing information now.
You may receive contributions from hundreds of different donors, or just a small handful. Either way, make sure you are maintaining a complete and current list of all your donors. This will help your accountant prepare the Schedule B of your nonprofit Form 990. Review and update your list now, so you can quickly add any new donations received during the busy holiday season.
A pledge is a promise to make a donation. Pledges need to be properly dated and accounted for, especially when you approach the end of the year. When a donor makes a pledge, a receivable is usually recorded immediately. Your accountant can guide you on certain circumstances when you wouldn’t record a pledge right away.
Fundraising is a lot of work, whether your organization coordinates multiple fundraising events or just one per year. Accounting for fundraising events can be tricky. It’s always a great idea to consult your accountant early in the planning stages to learn how to properly account for ticket sales, auctions, sponsorships and gaming income such as raffles or bingo. If your fundraising financials are a mess, you’ll want to tackle the problem now, not at the last minute before your Form 990 is due. Well-organized fundraising accounts will make it easy to know how profitable each event was, and will also make it easy for your accountant to complete your Form 990.
If you have multiple programs, it’s important to account for each one accurately. The financials for each program can help inform many managerial decisions, including the sustainability of the program itself. Each program needs to be carefully set up in your accounting system so that all income and expenses are tracked accordingly. Review your programs’ financials for accuracy at the end of every month, and take a look at the overall picture before the end of the year.
Board of Directors
Your Board of Directors may not change frequently, but it’s still important to keep track of any changes or additions. Your accountant will always ask you for an updated list of board members when preparing the Form 990. Keeping a current list on hand will save time for everyone.
By tackling these tasks now, you will have the peace of mind to comfortably enjoy the holiday season ahead. And your accountant will surely thank you too!