Nonprofit Management All-in-One For Dummies

Chapter 2

Setting Up the Chart of Accounts for Nonprofits

IN THIS CHAPTER

Organizing a chart of accounts

Understanding assets, liabilities, net assets, revenues, and expenses

Setting up accounting codes

To easily keep track of where money is coming from and going to in your nonprofit, you use a chart of accounts. The chart of accounts is a list of each account that the accounting system tracks; it captures the information you need to keep track of and use to make good financial decisions.

The chart of accounts is like a big reference card that contains numbers, or codes, and names of accounts; no transactions or specific financial information is recorded on the chart of accounts. An account code from the chart of accounts is recorded into the financial records, and from there into financial reports. So, for example, when you receive a donation, you code it with one account number. When you owe a vendor, you code it with another account number.

This chapter runs down the different accounts in a typical chart, how you can personalize your nonprofit’s chart of accounts, and what you need to do to code funds coming in and going out of your nonprofit.

Identifying and Naming Your Nonprofit’s ...