What Is Nonprofit Accounting?

Nonprofit accounting, also referred to as fund accounting, is the practice of applying income and expenses to a particular fund in an organization. Subsequently, it allows the organization to accurately apply and track donations to the proper project or account that they were intended to fund. This results in a more transparent set of financials for the nonprofit, and more happy donors who can clearly see where their money is being applied.

For additional information, read a more detailed definition of nonprofit accounting.

About Our Nonprofit Accounting Course

This course will provide key points all nonprofits need to know to improve their financial health. In addition to that, Alex will cover:

• Fund accounting and why nonprofits need it
• How to use a chart of accounts
• Tracking income and expenses unique to nonprofits
• How to track donations to keep your supporters happy
• Building reports that reflect your mission

If you currently aren’t using a fund accounting software, or your current software isn’t made specifically for nonprofits, you can try Aplos Nonprofit Accounting Software for free and follow along during the course.

Upon signing up, you can expect an email every day for the next five days. Happy learning!

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A Note On Nonprofits Using QuickBooks®

If your nonprofit is using QuickBooks® to manage its accounting needs, it is missing some critical features and reports. For example, QuickBooks® drops income into one general fund. Therefore, you must use a combination of sub-accounts, classes, external spreadsheets, or even separate bank accounts to get fund-specific data.

QuickBooks® used to have a nonprofit version available for desktop. They’ve recently discontinued support of the product and are now pushing nonprofits to their QuickBooks® for Nonprofits webpage. The problem is it’s not an actual product. That is to say, you will have to duct tape their for-profit tools and reports together to get the fund accounting data your nonprofit needs.

For more examples of how QuickBooks® falls short, check out our complete review of QuickBooks® for Nonprofits.