Importance of Bookkeeping for Charities and Non-profit Organizations

Charities, as with any other organizations, exist because they have a goal. And whatever the goal is, money is essential to help them achieve it. But of course, having money doesn’t mean success will be guaranteed. No matter how large your fund is, the money you have will easily slip between your fingers if you don’t know how to efficiently handle it.

One of the primary reasons why businesses fail is because of poor financial management. And as a charity with an aim to cause significant impact to the society, you don’t want that to happen to you. What you want is to definitely save and spend all your donations wisely, preferably according to its mission.

bookkeeping importance

Achieving your organization’s goal starts with having a healthy book. When it comes to financial books, you usually have two options – either do it yourself or hire somebody do it for you. Well some people prefer to do the bookkeeping themselves because they find it too expensive to hire an accountant or a bookkeeper. Well, there’s nothing actually wrong with that, as long as you’re sure that you have the ability to keep track of your organization’s finances effectively.

Nevertheless, hiring an outside accountant is essential to monitor and manage the financial aspects of your organization. Remember, money management is a very tricky aspect of a business. It doesn’t only involve collecting and spending funds, but also deals with complicated activities, such as making bank deposits, transferring financial information, tracking back accounts, preparing checks, drafting financial reports, calculating payroll, analyzing financial situations, doing taxes, giving financial advice, etc. And it can also involve much more complex responsibilities, depending on the size and status of your organization. For this reason, it pays to hire a bookkeeper or an accountant, who knows how to manage your accounts well.

While there are now software available that make bookkeeping much easier and enjoyable, dealing with financial records and taxes is probably not what you want to do all the time. The very reason why you built a charity is because you want to help people and make a significant impact in the society, and it is very unlikely for you to be able to do that if you will concentrate your attention in bookkeeping. If you hire or outsource an accountant, you can do much more important stuff and focus on your core aims.

Other benefits of hiring a bookkeeper:

  • Help you understand your financial situation well
  • Help you prepare a meaningful budget
  • Help you prepare your taxes
  • Help you comply with current legislation and regulations
  • Help you make your work quicker

Whether you’ve been running a charity for a while or you’re just starting out to build your own non-profit organization, hiring a bookkeeper is definitely essential. To find a bookkeeper in your area, contact the U.S. Association of Chartered Accountants or the American Institute of Professional Bookkeepers. You can also find a reliable bookkeeper by searching online database and websites and typing your specific location. For instance, if you are in Melbourne, just type bookkeepers Melbourne to find the available bookkeepers or accountants in your area.

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