Our friend Vicky Boatwright at Free Church Accounting recently published a fabulous article on how to set up a fund accounting system for a church or nonprofit. She details several steps everyone in an organization should follow, regardless of who does the bookkeeping.
In Step One, she discusses the importance of separating personal and organizational accounts. She writes, “Follow the most important rule in accounting which is to keep personal transactions separate from church/nonprofit transactions!” Boatwright goes on to say, “I know this sounds like a given, but some churches/nonprofits start up in someone’s home or garage and sometimes it gets a little difficult to keep everything separate.”
Based on her experience, she also discusses using accounting software for data entry, building your chart of accounts, maintaining your fund accounting system, being prepared for an audit, and more. You can read her entire article on her website.
For additional info on fund-based accounting, check out our Academy Lesson. You’ll learn what funds are and how fund accounting differs from basic accounting. You’ll also understand why fund accounting is essential for nonprofits and churches.
If you’re looking for a fund accounting system based on the unique needs of your organization, try Aplos for free. Aplos Software was created specifically for nonprofits and churches. We make fund accounting simple, and you’ll get the robust reporting you need for your leadership or board.