Fund accounting for organizations with a mission to protect
Nonprofit accounting is not just bookkeeping with different labels. Restricted funds, grant compliance, and board accountability call for a different discipline, one built around your mission rather than a generic chart of accounts.
Discuss Nonprofit AccountingRestricted & Unrestricted Fund Tracking
Every dollar tracked against its correct fund and purpose, so you can answer a funder's question in minutes instead of days.
Grant Tracking & Compliance
Grant budgets, reporting deadlines, and compliance requirements managed so nothing slips through at renewal time.
Budget-to-Actual Reporting
Clear, board-ready comparisons of budget against actual spend, by fund and by program.
Board Reporting
Financial packages built for board members who need the full picture without an accounting degree to read it.
Internal Controls
Practical controls sized for a small nonprofit: enough to protect the organization without slowing it down.
Close Support
A monthly and year-end close process that holds up to audit and satisfies funder requirements.
How fund accounting works
Every dollar has a purpose, and your books should show it.
Suppose a foundation gives your organization a $50,000 grant for a youth mentoring program. That money is not available for rent or general operations. Your books need to record it as restricted, show how much has been spent on the program, and show how much remains, so you can report back to the funder and keep your board from counting that cash as free to spend.
Financial statements then present net assets in two groups, with donor restrictions and without donor restrictions. Getting that split right every month is what keeps audits, funder reports, and board conversations simple.
What a board financial package should include
- Statement of financial position (balance sheet) with net assets with and without donor restrictions
- Statement of activities for the month and year to date
- Budget-to-actual by fund, program, or grant
- Cash position and a short forward-looking cash outlook
- Grant and restricted-fund balance report showing amounts received, spent, and remaining
- A one-page summary of what changed and what needs the board's attention
An audit-readiness checklist
- Bank and credit card accounts reconciled every month
- Restricted contributions and grants coded to the correct fund at the time they are received
- Support on file for grants, pledges, and large donations
- Payroll and payroll tax accounts reconciled
- Expenses allocated across program, management, and fundraising functions with a documented method
- Fixed assets and prepaid items tracked with schedules
Frequently asked questions
What is nonprofit fund accounting?
Fund accounting tracks money by the purpose it was given for, not just by the type of transaction. A donation restricted to a youth program, for example, must be tracked and spent for that program, and reported separately from general operating funds.
What is the difference between restricted and unrestricted funds?
Unrestricted funds can be used for any purpose that supports the mission. Restricted funds carry a donor or grantor limit on purpose or timing. Board designations are different: they are internal decisions that can be changed, while donor restrictions are legally binding.
Can QuickBooks handle nonprofit fund accounting?
Yes, when it is set up correctly. QuickBooks Online can track funds, programs, and grants using classes and a nonprofit-appropriate chart of accounts, and report net assets with and without donor restrictions. Setup matters more than the software, which is why onboarding starts with the fund structure.
What should a nonprofit board financial package include?
At minimum: a balance sheet, a statement of activities, budget-to-actual, cash position, and a restricted funds and grants report, with a short narrative explaining what changed. The goal is a package a board member can read in minutes.
How do you record grants and contributions?
Unconditional contributions are recorded when promised, and conditional grants are recorded as the conditions are met. Each is coded to the right fund so restricted balances stay accurate. Treatment depends on the grant terms, so agreements are reviewed at setup.
Do you prepare Form 990 or audits?
Your CPA or auditor handles the Form 990 and any audit. The books are kept organized and supportable so their work is faster and cleaner.
Do you work with nonprofits outside Phoenix?
Yes. Services are delivered remotely for nonprofits nationwide, with in-person availability across the Phoenix metro area.
Grant-funded and accountable to your board?
Let's talk about where your fund accounting stands today and what "audit-ready" would actually look like for your organization.
Discuss Nonprofit Accounting