Accounting for Non-profit organizations (NGO and Religious organizations)

Accounting for Non-profit organizations (NGO and Religious organizations)

There are two types of accounting methods a non-profit organization can opt for, cash accounting method or an accrual accounting method. These recording for expenses and income help non-profit organizations maintain a record and also utilize finances according to the strict funding that is available with them. It is also essential that they do this in order to suffice according to their finances in order to survive.

A cash accounting method records transaction amounts when the money trades hands while an accrual accounting method records the amounts when a transaction occurs. Both of these methods are very useful for non-profits.

In order to qualify as a tax-exempt entity, non-profit organizations must abide by with the certain federal income tax laws. To prove compliance, it is necessary even for non-profit organizations to maintain records. Your organization can choose any of the two accounting methods that suits the organization’s activities and clearly show your income and expenses, from our accounting experts from FOAps Group LLC.