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Nonprofit 101: Month-end Reporting

Month-end reports are essential for keeping a firm grip on an organization’s financial health. Certain processes produce a trail that deters fraud and tracks expenses before they get out of hand. The following are seven suggestions for a month-end reporting policy:

  1. Ask authorized signors to review monthly bank statements and investigate any unusual items. (Have a copy of checks instead of just check numbers on the statement.)
  2. Segregate the bank reconciliation preparation function from accounts payable.
  3. Set up an independent function for reviewing: bank statements, reconciliation, and trial balances. The independent person, such as the Treasurer or Executive Director, should also compare accounts receivable and accounts payable to the trial balance.
  4. Compare actual income and expenses to the budget. Investigate any unanticipated variations.
  5. Review the detail for general journal entries.
  6. Verify payroll withholdings are remitted in a timely manner.
  7. Put interim financial reports on the agenda for board review.

Learn more about the effective use of reports and other internal controls for nonprofit organizations when you attend Taco Tuesdays in Dallas on September 22nd.  For more information and to register, click here.