Accounting and tax best practices for your not-for-profit in 2024

As we embark on a new calendar year, Baker Tilly’s not-for-profit (NFP) specialists highlight accounting, tax and compliance best practices for not-for-profit organizations. For a deeper dive into this guidance, watch our on-demand webinar, 2023 not-for-profit and higher education accounting and tax update: the year in review and what to expect in 2024.

Not-for-profits must consider the following general practices:

• Understand and comply with NFP-specific accounting rules, regulations and tax requirements
• Adhere to tax filing requirements and understand the tax laws for tax-exempt entities
• Ensure the Board of Directors are independent of the organization and establish an audit and/or finance committee
• Develop realistic fundraising objectives and a long-term strategic plan
• Recruit individuals with NFP accounting experience and strong ethical behavior
• Invest in high-quality accounting software for tracking and interfacing
• Maintain a focus on budgeting and forecasting and monitor finances regularly to adjust for any changes occurring during the year
• Develop strong internal controls to help maintain financial accuracy and transparency and create checks and balances internally
• Establish segregation of duties in key accounting areas
• Monitor donations and in-kind contributions and ensure compliance with donor intent
• Prepare timely financials and engage an auditor to obtain an annual external audit
• Monitor overhead costs to ensure proper expense allocations
• Recognize the current NFP environment and areas where fraud could take place
• Realize cybersecurity risks and take preventative measures to help mitigate those risks