Nonprofits and associations face particular accounting challenges, such as tracking grants, managing real-time financial data, and payroll management. For every challenge, there is, of course, a solution. If you already regularly employ a CPA, then your financial management is likely in very good hands, provided the CPA is experienced in the nuances of accounting for your particular type of organization. CPAs who possess expertise in providing financial management services for nonprofits and associations are better equipped to assist you in the ways that matter most.
Why You Need a Specialized CPA
Maryland is home to a large number of associations and nonprofit organizations. In each of these, accounting is a primary function, and the growing challenge of staying in compliance with new regulations and reporting requirements is a difficult task. Those organizations that either have a CPA on staff or outsource to a CPA with experience in the association and nonprofit sector benefit from improved financial management and a multitude of additional services.
As a trusted business advisor, a specialized CPA can add immense value to your organization. That’s because they possess a wealth of knowledge and expertise regarding regulatory requirements, legal and public requirements, and other important functions relative to nonprofits and associations.
Additionally, as a licensed accountant who engages in continuing education to maintain a strong knowledge of changing state and federal tax laws and requirements, you can rest assured that your CPA can provide deep insight and professional guidance, enabling you to make strategic business decisions. You’ll be able to improve cost allocation processes and donor fund segregation, stay on track with ever-changing regulations, and better handle budgeting and fundraising with an internal control system.
Services a CPA Specializing in Nonprofits and Associations Can Provide
A CPA with experience advising nonprofits and associations can aid those organizations in solving tax problems by helping them properly budget resources and by preparing financial data in an organized, efficient manner according to state and federal regulations. Using advanced analytical tools and industry expertise, CPAs offer great assistance in:
- Accounting services
- Financial reporting
- Cash management
- Budgeting and forecasting
- Board financial literacy
Additional value is added with expert assistance in the following areas:
There are a number of accounting software packages and systems available, but choosing the right one can be difficult for someone without a lot of experience navigating their nuances. CPAs can help your organization implement an accounting system that works best for your circumstances and goals, and subsequently develop internal controls that assist with tax preparation. This can be a great aid not only in tax prep and filing, but also with preparing for grant and loan applications — or even an audit.
CPAs specializing in nonprofits and associations are well versed in compliance audits and can identify the potential risks that could result in an audit. By assessing the organization’s finances several times throughout the year, specialized CPAs can inform leadership of any risks and make recommendations to amend those risks and ensure compliance. Throughout this process, the organization will also gain great insight into their financial metrics, enabling them to make improvements that advance their operations. When needed, CPAs can also provide forensic accounting and internal audit services to identify areas of potential fraud.
Systematic reviews that identify areas where resources could be managed more efficiently serve to improve the organization’s financial metrics. These reviews also assist organization leaders and the board of directors with the advancement of critical processes and decisions that aid in risk management. By having a good eye on the financial metrics throughout the year, both the CPA and the leadership team can work together for the benefit of the organization and make decisions that improve the chances of achieving its goals.
Tax prep and filing for nonprofits and associations are often vastly different from tax preparation for a regular business. A number of tax-exempt statuses can apply to an organization. These must be thoroughly reviewed and applied properly, as well as kept up to date to ensure the tax-exempt status does not lapse. Common tax-exempt, nonprofit, and complex filing services include:
- Application for tax-exempt status with Form 1023 or 1024
- Sales tax exemption applications
- Re-institution of lapsed tax-exempt status
- Preparation of Form 990, 990PF, and 990-T
- State charitable registration filings
Professional and efficient accounting for nonprofits and associations requires much more than the services of an accountant or a bookkeeper. To truly ensure your organization is financially equipped to function effectively and achieve its goals, you need a specialized CPA who goes beyond the basics to offer increasing value in securing a strong financial future. Enlisting the aid of a CPA and their expert advice can result in taking your organization to higher levels of achievement while cutting costs and successfully facing new challenges.
The BradyRenner team knows what you need in order to make essential decisions in this environment: clear, understandable financial statements, information that can help board members and executives understand their options, and effective compliance support, including IRS Form 990 and other requirements. We can help you strengthen your accounting processes and internal controls, as well as gain a better picture of your organization’s financial health.
Contact the team at BradyRenner today to explore how our expertise in working with the nonprofit and association sector can help you attain greater financial health and security for your organization.
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