It may seem like a long way off, but before you know it, the end of the year will be here. Are you prepared? Here are some tips to get ready.
- Ensure that your financial records are up to date by making sure that all of the journal entries are correct and posted.
- Check to make sure all revenue and expenses that are postmarked by December 31 are posted to the general ledger, so they are accounted for in the correct period.
- Verify all donor records are up to date. All donors making a contribution of $250 or more need a written acknowledgment to be able to claim the deduction. Make sure that these donors get a thank you note stating the amount of the gift for both cash and non-cash gifts. Remember to include a statement that no goods or services were provided by the organization if that was the case.
- Run the balance sheet and income statement as of the year end to make sure they are accurate and in balance. If any adjustments are necessary, reconcile the account balances and rerun the reports.
- Reconcile all bank and investment statements to the general ledger.
- Do you receive grants from the government? Are there specific reports the organization needs to file with those government entities? Check with your grantor to make sure you know which reports need to be submitted and the date the reports need to be filed.
- Review the annual budget and compare to the actual numbers. Are the balances comparable or are there large variances? Investigate these variances to ensure the reporting is correct. Consider areas that need to be monitored for next year’s budget, whether it is to cut costs, increase income or allocate funds differently?
- Are the payroll reports correct and up to date? Besides the usual 941, W-2, W-3 and 1099 forms sent in to the IRS, most nonprofits also need to file a 990. Contact your Hawkins Ash CPAs representative to get a list of what will be needed to complete the 990.
This is a long list, but if started earlier, rather than later, it will help save time in preparing for the year-end. Please contact us with questions in preparing for your audit.