Have you ever put banana chunks in the freezer so you could use them later for smoothies? It’s a great way to preserve bananas since they ripen so fast. Plus they make delicious smoothies. Depreciation is like a banana that you chop up into sections and save in the freezer. Then periodically you take out…
Read MoreSo you bought a laptop computer. That’s great! Quick question: Is it an asset or is it an expense? Answer: It depends. Don’t you hate that? For one organization the laptop is an asset. For another organization, it’s an expense. It all depends on the organization’s capitalization threshold. The what? Capitalization Threshold Let’s define capitalization…
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What if your board of directors looks at your profit and loss report each month and things generally look good. Then one month they see a big loss. “That’s because I paid $1,200 to renew the officers’ and directors’ insurance policy,” you explain. One board member comments, “I was going to ask if we had…
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What happens when you see a charge to a movie theater on the organization’s credit card and you realize this is probably not a valid expense? You talk to the staff member who made the charge and she exclaims, “Oh no, the organization credit card and my personal card are both blue and I pulled…
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Aging. Now there’s a topic we can all relate to! But I’m not talking about the kind of aging you and I experience each day. I’m talking about accounts receivable aging. The biggest difference is that accounts receivable, unlike you and me, do not get better with age. In our last post, Why Care About…
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“We have pledges receivable, but they are not on our books. Shouldn’t they be in our books?” Such began our consulting engagement with a local nonprofit organization, Spring Center (not the real name). Pledges Receivable and Accounts Receivable Our Chart of Accounts Grand Tour continues with the next type of account commonly found on the…
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Normally every bank type account in your chart of accounts aligns with an actual bank account you maintain at a banking Institution. This is not the case with Undeposited Funds, an account that hides beneath many transactions you make in QuickBooks. This topic will be our last destination for Cash in our Nonprofit Chart of…
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In most countries, checks have “gone the way of the fax machine and rotary telephone.” (Bloomberg, “Why Can’t Americans Ditch Checks?” July 26, 2017). Our Chart of Accounts Grand Tour continues to explore Cash, the first account on your balance sheet, as we look at options to manage cash payments electronically. Intuit makes it very…
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Who doesn’t want to save time on nonprofit bookkeeping? And who wouldn’t like to have more accurate financial reports ready more quickly each month? The trick lies in putting systems in place that enable you to work efficiently. The interesting thing about putting a system in place to do something efficiently is that you usually…
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We kicked off our Nonprofit Chart of Accounts Grand Tour last week with an overview of cash. While mission is the heart, cash is the lifeblood of a nonprofit organization. All nonprofits must manage cash to survive and thrive. To that end, we offer you the following list of ten pointers on managing cash. 1.…
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