The accounting department of a nonprofit organization must handle all funding coming in and going out for the organization. Although a nonprofit organization does not keep funding for profit, an accountant department is a valuable asset in terms of composing annual reports with financial information, handling tax-exemption forms for the IRS and ensuring that all workers within the nonprofit organization are paid on time.
The accounting department of a nonprofit organization is responsible for handling all purchases and income, especially tracking all donations and fundraising income, if applicable. Even though the nonprofit does not keep any funding for profit, a budget is important for long-term planning, meeting short-term goals and ensuring that money is available for the goals of the nonprofit organization. Examples of goals are research, services and educational programs. A nonprofit organization must plan ahead financially to ensure that the organization can grow and meet the needs of the community. Long-term planning includes opening up new locations around the community or in the state or expanding the program selection.
Nonprofit organizations are tax-exempt if the organization fills out specific tax-exemption forms from the IRS. The IRS only exempts specific nonprofits or charitable organizations from taxes and a complete list is offered on the IRS website. Examples include corporate organizations, state-sponsored high-risk health organizations, state-sponsored worker’s compensation reinsurance, child care organizations, religious and apostolic associations and farmer’s cooperative associations.
Nonprofit accounting departments are also responsible for creating the annual budget reports. These reports show how much the nonprofit business has made over a single fiscal year, what the nonprofit has spent the income on in terms of program development or research and how much funding is spent on salaries and wages each year.
The financial information of a non-profit organization is made available to the public through the IRS. The accounting department is responsible for filling out the 990 form, 990-EZ and 990-PF forms. These forms inform the public about the goals of the nonprofit organization, what the organization has accomplished and what programs or services are offered by the nonprofit to fulfill the goals and objectives in the initial plan.