Nonprofit Statement of Financial Position

This report will show them which of your activities brought cash into your operation during the period and which expenses ate up large chunks of money. When a board member asks for a cash flow statement, usually it’s because you’re losing cash. If you or your board come from the for-profit world, it’s okay to call it a Balance Sheet among your team. It is completely ok and acceptable to have multiple versions of your financial reports.

How are net assets classified on a non-profit organization’s balance sheet?

Just as you’d check your own backpack to see what you have and what you owe, a balance sheet shows what a nonprofit owns like money and property and what it owes like bills or loans. Understanding this backpack helps everyone involved, like donors and leaders, know if the nonprofit is carrying a heavy load or if it’s light and agile. It helps plan the route for success and ensures the nonprofit has what it needs to reach its destination of helping others. Analyzing these trends provides a more dynamic view of your organization’s financial health.

Is a non profit balance sheet the same as a statement of financial position?

• On the other hand, they share how these funds support students throughout their education.
• Knowing the right forms and documents to claim each credit and deduction is daunting.
• It may be tempting to narrow in on one section of the balance sheet and make a quick assumption about your organization’s financial health.
• Internally you should create and use reports that give you the information you need to run your business effectively.

Strong cash flow is critical in covering operating expenses like salaries, supplies, and events costs. When analyzing current assets, it is helpful to compare the amounts to previous periods to identify any significant changes. This can indicate trends in the organization’s cash flow and financial stability. For example, if a large portion of the current assets is tied up in inventory, it may indicate potential liquidity issues. On the other hand, long-term liabilities are obligations that are not expected to be paid within one year. These liabilities have a longer repayment period and can have a significant impact on the organization’s financial The Key Benefits of Accounting Services for Nonprofit Organizations health and stability.

• Don’t use your personal bank account to receive, hold or disburse money for your nonprofit.
• As a fractional CFO, he goes beyond routine duties, guiding organizations with strategic insights for sound financial decisions.
• Understanding the full spectrum of nonprofit liabilities from short-term accrued expenses to large loans—is more than just crunching numbers—it’s building clarity and confidence.
• Each balance listed for either an asset or a liability should tie out to the general ledger balance in the accounting records and be able to be supported by other documents.

Temporarily Restricted: Mission-Focused Support

Before finalizing your balance sheet, reconcile all of your financial records. Reconciliation ensures accuracy in reporting—most importantly—when reporting all donor-restricted funds or major grants. Mistakes can erode credibility, so this final review is your opportunity to build confidence in donors, board members, and auditors. Remember, permanently restricted net assets are a valuable resource for non-profit organizations, and proper management is essential to maintain donor trust and fulfill the intended purposes of the funds. It’s a perfect slide to use to provide a visual of your nonprofit’s Board of Directors. You can easily copy it into an annual report presentation and update it as your board changes.

Expenses

3 Please note that funds relating to Currencycloud’s services are not FDIC insured or protected by the Visa Zero liability protection policy. In regards to Currencycloud’s services when funds are posted to your account, e-money is issued in exchange for these funds, by an Electronic Money Institution who we work with, called Currencycloud. This means that the money behind the balance you see in your account is https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ held at a reputable bank, and most importantly, is protected for you in the event of Currencycloud’s, or our, insolvency. Currencycloud stops safeguarding your funds when the money has been paid out of your account to your beneficiary’s account. This balance sheet template simplifies the balance sheet process by asking plain language questions and then a balanced balance sheet will be generated from those questions.