Year-End Checklist for Nonprofit Accounting

Can you believe that the year is almost over? If you find that year-end is sneaking up on you once again, here’s a handy checklist of financial tasks that need to happen as the new year approaches.

 
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Many nonprofit organizations have a fiscal year that ends outside of the busy holiday fundraising period. (For example, a fiscal year of July 1 – June 30 is popular for organizations that rely on year-end fundraising.) Regardless of when your organization’s fiscal year ends, there are still a number of tasks that must be completed on a calendar-year schedule.

Vendor/Contractor Information for 1099s

Did you make payments of $600 or more to any independent contractors or service providers this year? If so, you may need to send them a Form 1099-MISC (just like you send your employees a Form W-2). Make sure you have current addresses and tax information on file for all contractors, from your accountant to your office cleaning service. If you hosted a special event this year, like a conference or fundraising banquet, you may also need to send 1099s to the caterers, entertainment staff, or keynote speakers – anyone who provided a service. If you are missing information from any of your vendors, ask them to fill out a Form W-9 for your records.

Grant Reporting and State Registrations

Although deadlines and reporting periods can vary, many grants, contracts, and charitable registrations to solicit donations use a calendar-year schedule. Make sure you’re aware of all upcoming deadlines and have a plan to prevent anything from slipping through the cracks during this busy time of year.

Donor Acknowledgement Letters

Nonprofit organizations are required to send a written donor acknowledgement for contributions exceeding $250. While you should be sending out acknowledgments on a regular basis throughout the year, it’s not uncommon to fall behind. Get caught up by year-end, since donors will need to use these letters when they’re filing their tax returns.


If your organization’s fiscal year ends on December 31, you’ll have many internal accounting tasks to complete before you can close the books. If you’re struggling to manage these accounting tasks on top of year-end fundraising or program needs, you may want to look into shifting your organization’s fiscal year so it ends during a less hectic time of year.

Budget & Accounting Review

Review your financial records and get your budget approved for the next year. Follow up on any uncleared checks, write off any receivables that are not collectible, and examine your chart of accounts for any necessary changes or additions.

Revenue Recognition

To stay compliant with GAAP (generally accepted accounting principles), revenue must be recorded at the appropriate time – which is not necessarily when the money changes hands. If you are awarded a grant in December 2019 but the check won’t arrive until January 2020, you generally still need to record those funds in December. That will ensure the grant shows up on your 2019 financial records. Revenue recognition can be tricky, but it’s important to get everything properly recorded by year-end.

In-Kind Donations

Non-cash donations of goods and services should be recorded as in-kind donations. Since there is no cash involved, it can be easy to forget to enter these transactions into your accounting records when they occur. Make sure you’ve entered any missing contributions by the end of the year.

Capitalization

Your organization should have a standard capitalization policy where purchases of long-lived assets over a certain dollar amount (think computers, printers, and office furniture) are recorded as an asset rather than an expense. These assets will generally be depreciated over time, which essentially allows your organization to spread out the cost over many years in your accounting records. Review your purchases from the past year to make sure that all of these items have been recorded in a fixed asset account.