How To Ensure Your Nonprofit’s Revenue Tracking & Accounting Systems Have Accurate Data

Nonprofit organizations have a right to generate revenue as much as for-profit companies do. Nonprofits, however, are required to use their proceeds to fund a cause or provide for the social good in order to remain exempt from taxation. Your nonprofit organization may lose its tax-exempt status if authorities suspect any of its revenue streams appear to no longer fulfill a charitable purpose.

To avoid raising any red flags, it’s important to maintain accurate records and regularly track your organization’s revenue sources. Financial Edge accounting software is an effective system that categorizes a nonprofit’s gross receipts and separates revenue from their various sources, such as donations, promotional sales or major gifts.

Integrate Your Nonprofit Accounting Data

Maintaining accuracy and across-the-board accounting in your nonprofit’s record-keeping could make a difference in preserving a tax-exempt 501(c)(3) status if your revenue sources or expenditures are questioned. In the event your income streams or expenses appear unrelated to your organization’s charitable cause, a well-integrated donor management system can help you prepare your financial records and overcome an audit.

Omatic offers a cloud-based system that integrates your accounting information with your donor, supporter and constituent records. You can use the system to separate your organization’s income streams by their various source activities. For tax-exemption purposes, you may need to itemize and differentiate income, such as merchandise or product sales, from the donations your organization receives. The Omatic software also identifies your expenses and can provide a clearer understanding of how much donor funding you need to meet the needs of your organization’s mission and operating costs.

Read Also :   Top 5 Best Dedicated Server Providers in India

By generating well-defined accounting reports, your organization can also produce appealing visuals, such as pie charts and graphs, to communicate your mission’s progress to your donors. Having a larger portion of grants, donations and major gifts indicates that your organization relies on contributors to further its purpose. Blackbaud donor management software easily integrates with the Omatic systems and is an effective tool for keeping track of how much funding your organization attracts with each campaign.

Keep Data Up To Date

By maintaining up-to-date tracking of your organization’s income and expenses with one of Omatic’s easy-to-use nonprofit budgeting tools, your organization can minimize waste and non-essential spending. Omatic’s automatic purging of duplicated donor information also frees up valuable personnel resources that would otherwise be spent on time-consuming “manual” clean-up work. The software can automate data dumps to maintain clean, accurate and up-to-date records.

The ImportOmatic software allows you to automate many of your bookkeeping tasks with your fundraising and event-planning activities. You can also set up a scoring system to learn which donors are more likely to be interested in your next campaign. Because nonprofits are now holding virtual events, you’ll also have a way to offer donors one-click payment options while accurately managing and reporting your campaign’s financial sources.

Providing Feedback While Maintaining Accurate Tax Reporting

Donors tend to take notice of well-presented reports providing positive feedback on how their funds are being used. By choosing a donor management system that accurately divides your income sources into different progress categories, you’ll help retain your supporters while you also maintain a reliable and accurate record-keeping system that fulfills the requirements for your tax reporting.

Read Also :   Top 5 Features Required of Data-Driven Marketing Tools

One thought on “How To Ensure Your Nonprofit’s Revenue Tracking & Accounting Systems Have Accurate Data

Leave a Reply

Your email address will not be published. Required fields are marked *