Nonprofit organizations aim to further a mission or goal and rely on funding sources such as donations, grants, and program revenue. Like for-profit businesses, nonprofits must document earnings and expenses for full financial transparency. Proper accounting practices enable nonprofits to function effectively, indirectly creating opportunities to bring about change for those in need. A tax and accounting firm like D’Alessio, Tocci & Pell is an essential partner for these organizations to reach new heights of success.
Harnessing Expertise for Financial Accountability and Transparency
Accounting for nonprofits requires professionals with a comprehensive understanding of accountancy definitions and solid educational backgrounds. D’Alessio, Tocci & Pell’s team of experts are well-versed in state and federal regulatory laws governing financial accountability for nonprofits. Adhering to the ethical values and code of conduct outlined by the American Institute of Certified Public Accountants (AICPA), they ensure donors that their contributions are managed equitably, emphasizing integrity and financial transparency.
Navigating Key Financial Statements for Nonprofit Accounting
D’Alessio, Tocci & Pell’s specialists are proficient in preparing essential financial statements for nonprofits, such as:
- Statement of Cash Flow: Reflecting the inflow and outflow of cash in an organization, including cash received from outside investments.
- Statement of Functional Expense: Reporting incurred expenses during the reporting period, including payroll, contractors, bills, and rent for equipment or property.
The firm’s certified public accountants ensure financial accountability and compliance with legal requirements, such as providing the public with annual IRS returns (IRS Form 990).
Mastering the Nuances of Nonprofit Accounting
D’Alessio, Tocci & Pell recognizes that nonprofits and for-profit businesses operate under different financial accounting rules. Their experts guide nonprofit organizations in maintaining books according to state and federal laws, helping avoid potential legal consequences and loss of tax-exempt status.
The firm’s accountants are adept at addressing specific nonprofit accounting requirements, such as:
- Fund Accounting: The team at D’Alessio, Tocci & Pell efficiently tracks revenues and expenses, ensuring funds are used for their intended purposes. They effectively manage general and special-purpose funds, providing programmatic staff with updated spending information, budget variances, forecasts, and burn-rates.
- Statement of Financial Position: Reflecting an organization’s overall financial position, the firm’s specialists accurately categorize assets and debts, dividing assets into restrictions (temporarily restricted, permanently restricted, or unrestricted net assets) to identify limitations on how they can be spent.
- Statement of Activities: D’Alessio, Tocci & Pell’s accountants excel in creating statements of activities for nonprofits, showing income (from grants, donations, and fundraisers) and costs (utilities, salaries, rent, and office supplies).
By partnering with a tax and accounting firm like D’Alessio, Tocci & Pell, nonprofit organizations can leverage the expertise needed for proper functioning, enabling them to achieve their mission and make a meaningful difference in the lives of those in need.