LUTZ BUSINESS INSIGHTS
Nonprofit Accounting Is Different: What You Should Know
LAUREN DUREN, healthcare & cas manager
Other DifferencesBeyond the need for creating the correct reports, there are other things to know about nonprofit accounting. For example:
- Though you don’t have to pay income taxes because of the tax-exempt status, you are still responsible for other kinds of taxes, like payroll, sales, and property.
- There are two types of functional expenses: support services and program services.
- You may have to declare unrelated business income if you receive funds not directly related to your charity’s cause.
Unfamiliar TerritoryMost accounting software is built for generic, for-profit businesses. They are not designed to handle the reports that nonprofits need, and are difficult to create on your own. For example, do you know the difference between unrestricted, temporarily restricted, and permanently restricted assets? This is one of the concepts you must understand to do the accounting for your nonprofit. It’s critical to have proper reporting. If you don’t, you risk losing your tax-exempt status. Your donors wouldn’t be able to deduct their contributions on their income taxes, and you’d have to pay your own taxes.
ABOUT THE AUTHOR
LAUREN DUREN + HEALTHCARE & CAS MANAGER
Lauren Duren is a Healthcare & CAS Manager at Lutz with over six years of relevant experience. She provides healthcare consulting, as well as outsourced accounting services to clients with a focus on QuickBooks, tax, and payroll compliance.
AREAS OF FOCUS
- Healthcare Accounting Consulting
- Outsourced Accounting
- Payroll Compliance
- Financial Reporting, Budgeting & Forecasting
- Provider Compensation Plans
- Practice Benchmarking
- Private Physician Practices
- Nonprofit Industry
AFFILIATIONS AND CREDENTIALS
- American Institute of Certified Public Accountants, Member
- Nebraska Society of Certified Public Accountants, Member
- National Medical Group Management Association, Member
- Nebraska Medical Group Management Association, Member
- Certified Public Accountant
- MBA, University of Nebraska, Omaha, NE
- BSBA in Accounting, University of Nebraska, Omaha, NE
- Lutz Gives Back, Volunteer
- QuickBooks Online for Nonprofits
- E/M Changes for 2021
- 3 Things a Business Plan Can Do for You
- Does Your Company Need a Business Valuation?
- The One Page Business Plan
- 5 Ways to Make Your Budgets Work
- Nonprofit Accounting is Different: What You Should Know
- Customers Paying Late? 4 Ways to Collect Faster
SIGN UP FOR OUR NEWSLETTERS!
We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.