What are you really getting from your accounting department? Read on for a breakdown of the 7 basic functions that are imperative to running your organization properly. These 7 functions apply to organizations of any budget size.
1. Monthly Reporting Package
Your accounting department should provide a monthly financial reporting package consisting of, at the very minimum:
- Balance Sheet
- Statement of Activities (commonly referred to as an income statement)
- Cash Flow Statement
Your monthly financial reporting package is prepared on a “timely” basis. If it takes more than two or three weeks, it is no longer timely.
Your accounting department reconciles all bank and investment accounts every month. Without this, it is impossible to know how much money you actually have.
4. Restricted Funds
Your accounting department tracks and clearly reports the status of your donor restricted funds.
5. Different Levels of Detail
Your accounting department produces financial reports in different levels of detail:
- Board: Summary-level detail
- Finance Committee: more detail
- Executive Director: all the details
6. Department & Program Data
Are you able to easily get your financial information segmented by departments and programs? YPTC refers to this as horizontal presentations.
Your accounting department should budget on both a cash and accrual basis. If you budget only on an accrual basis, you lose information about your cash flows. If you budget only on a cash basis, your budget may not line up properly with your actual performance which reduces the helpfulness of budget to actual analysis.
Not getting these 7 basic functions from your accounting department? It’s definitely time to contact the experts. YPTC can get you on track and provide you with the quality information that you need. Contact us today!