Xero also excels at accounting basics that can keep your nonprofit’s budget on track, including thorough financial reporting and expense tracking. Its mobile app lets you collaborate on the go, and it integrates with hundreds of third-party apps. Didn’t find the best accounting software for nonprofits (specifically, your nonprofit) on our list above? See if one of these additional accounting software solutions for nonprofit treasurers and bookkeepers meets your needs. Unlike most software for nonprofits, NonProfitPlus includes inventory management, which is crucial if you stock merchandise (like T-shirts and mugs) to raise money or reward donors. On the other hand, NonProfitPlus doesn’t list any pricing on its site—as with Sage Intacct, you have to get in touch with a representative for a quote.

• These funds comply with the rules, and regulations and are also accountable to the donors, the providers of grants, and the government agencies.
• Following these best practices for auditing and reporting will ensure compliance with regulations and promote transparency and trust within your organization.
• Map each restriction in your chart of accounts and create checklists for allowable costs.
• Our nonprofit bookkeeping and accounting services are affordable and cater to every organization.
• The event fund will reflect all related financial transactions, including donations from attendees and the cost of renting event space.
• When you partner with us, a dedicated service team works with you to immediately modernize and automate your accounting systems.

Araize FastFund Accounting

• See if one of these additional accounting software solutions for nonprofit treasurers and bookkeepers meets your needs.
• The accounting has now become complex with grant reporting and tracking.
• For-profit entities are individuals, corporations, or partnerships that conduct business for profit.
• This guide will cover all the essentials of nonprofit accounting, from setting up your books to preparing financial statements.
• For instance, mental health nonprofits often have high administrative costs because of licensing and compliance requirements.
• Your bookkeeping activities support your compliance with fund accounting rules.

Accountants must use your bookkeeping reports to analyze and present your organization’s financial status to the board, IRS, and other external characters. When choosing accounting software, consider the needs and financial capabilities of your organization. Here, we’ll explain the best accounting software for nonprofits and discuss the top features and functionality, pricing plans, and the pros and cons of each software. Some options would be better suited for smaller nonprofits with basic needs and others for growing organizations with https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ many moving parts. You’ll want to consider the monthly cost of any nonprofit accounting software, as well as any additional costs you might face for payment processing, add-ons, and any other tools.

The best nonprofit accounting software

• Bookkeepers must meticulously track these donor restrictions and ensure that funds are allocated and spent according to donor intentions.
• QuickBooks is the most well-known accounting software for nonprofits and for-profit organizations.
• Our expert nonprofit bookkeepers are available to enter and categorize income and expense transactions, prepare monthly statements and tax documents, and much more.
• A $10,000 unrestricted donations are managed differently from a $10,000 grant earmarked for specific programs.
• A non-profit statement of financial position should reflect all restricted, temporarily restricted, and unrestricted assets held at a given date.

A well-organized chart of accounts is essential for effective bookkeeping in nonprofits. Like any organization, nonprofits also have financial responsibilities requiring proper bookkeeping practices. If your non-profit lacks the bandwidth or expertise to keep up with fund accounting rules, you could risk paying fines or losing your tax-exempt status. The non-profit statement of cash flows should list cash inflows and outflows during the year. Your non-profit should summarize the total cash received or used for operating, investing, and financing activities.

• Key components include a well-structured chart of accounts, fund accounting, accurate tracking of donor contributions and grants, and regular financial reporting.
• Unfortunately, there aren’t many free nonprofit-specific accounting software options.
• This being said, when it comes down to it, this situation is not all that different from that of a typical small business owner, who also needs accounting software with specific capabilities, at an affordable cost.
• Nonprofit accounting is crucial for any organization that relies on donations and grants to fulfill its mission, not just those without revenue.
• The solution you decide on should also allow you to do some form of fund accounting.
• This version of QuickBooks Online offers the accounting features and functionality nonprofits need, including the ability to manage nonprofit finances, file Form 990 and file taxes.

Statement of Activities

Its basic financial reporting tools are suitable for small organizations The Key Benefits of Accounting Services for Nonprofit Organizations managing donations and expenses. Use separate accounts for restricted grants when donor agreements require it. Cash accounting records income when money hits the bank and expenses when paid. Accrual accounting records income when earned and expenses when incurred, even if cash moves later.

The Best Nonprofit Accounting Software

It goes without saying that you should never use your personal bank account for your nonprofit organization. You can always ask your bank about your account options and use those tailored for nonprofits. The option you go for should also enable you to do fund accounting (i.e., use different accounts for different purposes). Nonprofits have strict rules regarding funding sources and how they should be spent. For example, large organizations like universities often have dozens, if not hundreds, of bank accounts for different purposes like scholarships, tuition, projects, etc. Bookkeeping for a nonprofit is vital because it proves how an organization is spending its funds.