Accounting for not-for-profits that run Blackbaud Financial Edge NXT^®

Start with a month-end close that finishes on schedule, so cash, receivables, and payables are current. Then separate cash by restriction. Net assets with donor restrictions can only be used as the donor specified; what is left without restrictions is what operations can use. A rolling cash forecast built on closed months shows what is coming. A reliable monthly close is the base of our managed accounting work.

Common signs: the close runs late or not at all, bank reconciliations fall behind, the auditor proposes the same adjustments every year, or one person covers payables, payroll, grant reporting, and the board package. Turnover in the finance role is another. Outsourcing can cover the accounting function or support the staff you already have. The right answer depends on your size, your team, and your system, and a fit conversation is a reasonable place to start.

An implementation usually covers four things. Designing the chart of accounts, funds, and projects around how the organization reports. Bringing over opening balances, and any history you keep, from the prior system. Configuring the parts of Financial Edge NXT you will use. Training the staff who will run it. A good implementation ends with a first month-end close completed in the new system. Scope varies by organization, which is why we put it in writing before work begins.

It depends on the size of your chart of accounts, funds, and how much history moves over. The timeline is agreed in the written scope before work begins.

[CONFIRM WITH MICHAEL: typical timeline range]

Audit readiness comes mostly from the months before fieldwork. Every balance sheet account is reconciled and backed by a schedule. Donor restrictions, and releases from restriction, are documented. The year is closed and ties to the trial balance. When the auditor’s request list (often called the PBC list) arrives, most schedules are already done. A regular month-end close makes year-end far less of a project.

It depends on the organization. Many states require an audit or a review once revenue or contributions pass a set amount, and funders, lenders, or your bylaws may require one too. Under the federal Uniform Guidance, an organization that spends $1,000,000 or more in federal awards in a fiscal year generally needs a Single Audit (for fiscal years beginning on or after October 1, 2024). Check your state’s charitable registration rules and your grant agreements.

An audit gives reasonable assurance, the highest level, that the financial statements are free of material misstatement, and ends in an opinion. A review gives limited assurance, based mainly on inquiry and analytical procedures. A compilation gives no assurance; the accountant presents the statements without verifying them. Which one an organization needs usually depends on its bylaws, funders, lenders, or state requirements.

The close brings a month’s records to a finished, reviewed state. Bank and balance sheet accounts are reconciled. Accruals and expense allocations are recorded. Net assets are released from restriction as donor conditions are met, and results are compared with the budget. The result is a set of financial statements that leadership and the board can rely on. The schedule and responsibilities for the close are set in the engagement scope.

Form 990 is generally due on the 15th day of the fifth month after the organization’s fiscal year ends, which is May 15 for a calendar-year organization. An automatic six-month extension is available by filing Form 8868. Filing requirements vary by organization, so confirm the details for yours with whoever prepares your return. We prepare Form 990 as one of our not-for-profit services.

We quote after a short conversation about what your organization needs: which services, the size of your organization, and where your Financial Edge NXT setup stands today.

[CONFIRM WITH MICHAEL: fixed monthly fee, project quote, or hourly, and anything he wants said about cost]

Yes. Our not-for-profit work serves organizations across the United States.