As we round the calendar and prepare to begin 2014, a lot of nonprofits are going through the process of closing their financials for the year. At Aplos we want to make sure this transition is a smooth one, regardless of your accounting software. Below we will go through some helpful tips and reminders for closing your year-end financials. You can also download a Checklist version of this blog HERE.
Year End Reminders :: Employees
Faith based organizations need to designate the housing allowance for ministers for the upcoming year. Also, remind your employees to review their W-4 and confirm that the information is correct. Make sure to identify if any employee should be reclassified or if withholding amounts changed in the new year.
Year End Reminders :: Donors and Friends
Remind your donors to wait to file taxes until they have received their contribution summary from your organization. If you have time, you can also send them an advance statement with their current donation balance and ask for a year-end donation. After all, people tend to feel more generous around the holidays.
Some gifts to ministers, employees, or volunteers may be considered taxable income, so handle these carefully and note them as needed.
Year End Transactions
Make sure that all revenue and expenses are accounted for prior to closing the books. These transactions can include donations, other revenue, reimbursements, purchases, and payroll (taxes, retirement, flex spending, insurance).
Performing regular bank reconciliations will help to identify any missing or outstanding transactions. If this is not a part of your normal month-end checklist, we highly recommend adding it.
As mentioned above you’ll want to review and make any needed changes to your employees W-4 Forms. In addition to this be sure to send Contribution Statements and Form 1099 for vendors by January 31.
Run annual reports to check for accuracy and that all accounts balance. Make sure to adjust entries as needed and then re-run the reports and print for your records. You’ll also want to confirm that your fund balances are carried to the next year and that your accounting matches your bank balances (again, easily accomplished using bank reconciliations).
Other pieces of your accounting that you can review are your internal controls, budget values for the upcoming year, and your insurance policies to confirm they are adequate.
Remember that if you are not an Aplos customer you will also want to backup your data! If you are an Aplos customer, don’t worry, we do this for you. Transitioning to a new year is also the perfect time to switch to a new accounting software. If you are in need of true fund accounting software at a great price, you’ve come to the right place. Start a free trial today and see what you have been missing!
Our nonprofit accounting software blog discusses accounting, tax, and specific Aplos functionality issues. Scroll through the categories and click the topic that you are most interested in. All blogs are the property of the author. ©Permission granted to post this blog in its entirety with credit and link to . Good luck and remember this blog is not meant to be a substitute for professional services, just a helpful resource. Always consult a CPA or trusted professional if you seek tax or accounting advice.