Not-for-profit companies are important organizations that have a prime objective which is the social welfare of society. Many schools or hospitals wouldn’t exist if it weren’t for these companies. However, not gaining profit does not mean they can do without a financial organization.
Not-for-profit companies use fund accounting to organize their money according to the programs and activities the money was donated to support and usually choose either accrual or cash-basis accounting for their financial operations. Bookkeeping in these companies may get a little bit dizzy but our team has a lot of experience, so reach out today!
These companies have to deal with three types of receivables; trade, pledge, and grant, while also tracking and paying bills for the goods they purchase. It’s important to keep all these documents up to date but it can seem overwhelming sometimes, let us lighten your work.
Generally these types of companies are tax-exempt charities or other types of public service organizations, but to achieve it you need to know which is your classification and apply through the Internal Revenue Service (IRS) website. However, you can also choose to incorporate and maintain compliance with the state agency that regulates charitable organizations where it is based. If you want to know more, we can address all your doubts.
Despite not gaining profit, these organizations must pay the Federal Insurance Contributions Act (FICA) from employees’ paychecks and match an employee’s Social Security and Medicare contributions. It seems difficult but we assure you that we can make it much easier for you.
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