For many non-profit organizations, the monthly bookkeeping process often falls to the wayside as individuals focus on fulfilling the organization's mission and goals. It is easy to see the day to day (or month to month) bookkeeping process as an unnecessary time suck. As a result, many non-profit organizations end up pushing their bookkeeping tasks to their year-end, causing unnecessary stress when year-end taxes need to be filed.
However, accurate and up-to-date bookkeeping is very important for the majority of non-profit organizations. The Canada Revenue Agency (CRA) has very specific requirements with regards to how the books of non-profit’s should be maintained. These requirements are meant to ensure maximum transparency and traceability of donations. Furthermore, up-to-date bookkeeping allows for board members to make informed decisions based on real-time and accurate information.
We have outlined 3 simple tips to help your non-profit organizations speed up the year-end bookkeeping process, while still maintaining accuracy and reliability.
1) Keep Track of Receipts
Maintaining source documents is a very important aspect of the bookkeeping process. Luckily, there are a number of document management applications that can help to simplify the process of capturing, managing, and maintaining these documents.
Receipt-Bank, for example, is a tool that helps to automate your data entry process. Users can simply email or take a photo of an invoice or receipt, and Receipt-Bank will use Optical Character Recognition (OCR) to scan the image for critical information, such as the date and amount. After you’ve reviewed and approved the extracted information, you can automatically push the transaction directly into your accounting software. This not only saves time but ensures high-quality accurate reporting, and also attaches the source document to the transaction in your accounting program.
Another great document management app is Expensify, which helps to manage internal expense reports. Employees can use Expensify to either email or take a photo of their receipts and the app will use OCR to scan the document for key information. Once extracted, the information is pushed into an expense report which can be approved by the board of directors (or management team). The expense report will then be synced with your accounting system.
2) Streamline bank reconciliations
Completing manual bank reconciliations in excel, and key-punching data from paper receipts is now considered a thing of the past. With cloud-based accounting software such as Xero and QuickBooks Online, the bookkeeping process is becoming more automated, and ultimately more time efficient.
Both Xero and QuickBooks Online allow for bank accounts to be linked directly to the software - enabling transactions to be downloaded in real time, directly into the accounting system. As transactions begin to flow through the system, the software will remember how previous transactions were categorized. Rules can be set up for recurring payments, like office rent or insurance, to be categorized automatically. For all other transactions, document management apps, including the ones mentioned above, can be used to create the entries with source documents attached.
These tools greatly reduce the amount of data entry required on a regular basis, while also providing an audit trail that can be used to drill down on information. Not only does this ensure the accuracy of your bookkeeping, but also reduces the time required to maintain a quality set of books.
3) Accurately track and classify donations
Understanding how to manage donations and properly allocate funding is essential for non-profit organizations. Luckily, there are tools available that can help to streamline this process, as well. Keela is an all-in-one, non-profit-specific solution that allows users to accept donations and instantly issue donation receipts. Each contribution is automatically logged in Keela’s contact database for a reliable audit trail and also synced with your accounting software. Keela also allows organizations to manage their entire donor management workflow in one place, including communications, relationships, and day-to-day tasks.
Dene Paquin is the business development manager at Enkel, an accounting firm offering high-end bookkeeping services for non-profit organizations. With a great deal of experience in accounting and audit, the Enkel team focuses on helping not-for-profit organizations to better manage their bookkeeping and streamline their internal processes.
