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Non-profit organizations are valuable businesses that serve to further a social cause or provide a public benefit. They are great at driving economic development in virtually every sector of society. However, non-profits face rigorous accounting, reporting, and regulatory requirements. Meeting these stipulations can often be burdensome and if you’re left doing this alone, it can take you away from running your business. Limited budgets can make it even more stressful. By teaming up with a CPA firm, you will not only alleviate a lot of extra stress, you may also avoid making costly mistakes.
Non-Profit Requirements
Something that makes non-profits stand out among other businesses is their unique tax treatment. Most non-profits are given tax exempt status and achieving this is a big milestone. Because of this privilege and many others, the IRS holds non-profits to a high standard and lists a set of requirements that must be maintained to keep this status.
In addition to this, non-profits are required to disclose certain information such as specific tax forms, financial documents, board meetings, meeting notices, and minutes if the organization is covered by state sunshine laws. Forgetting to disclose the required information could be detrimental to the business. It’s important to note that there are many types of non-profits and each has different reporting and regulatory requirements. Knowing what’s required is crucial; but don’t think you have to do it alone, because a CPA is well equipped to assist you.
What are some specific ways a CPA firm can help?
There are a plethora of ways a CPA firm can help your non-profit. The following are only a few examples of the resources a CPA firm has to offer.
- Ensuring your tax return is filed accurately and timely. Each year, the IRS publishes a list of organizations whose tax-exempt status was automatically revoked due to failure to file the required forms for three consecutive years. Falling behind on filing can be expensive as penalties and interest can quickly escalate.
- Determining whether your non-profit is required to conduct an independent audit. Throughout the lifetime of a non-profit, federal, state, and local governments may request a copy of the organization’s audited financial statements. In other cases, some contracts with state and local governments may require the non-profit to conduct an independent audit. The CPA firm you choose may be able to conduct the audit or recommend a qualified firm who can.
- Helping you understand what’s required to run your business. Depending on what type of non-profit you are, there are numerous requirements and restrictions on how the business is run. A CPA who has experience with non-profits may be able to help you better understand what’s required.
Why does a non-profit need a CPA firm?
A CPA is one of the most widely-recognized and highly-trusted professional designations in the business world. These professionals have spent countless hours doing research and extensive continuing education to maintain their certification. They are qualified to assist your non-profit in challenges that may arise and make sure your business is up to date with the tax reporting standards.
In addition to this, CPA’s are more than number crunchers. They are trusted advisors and provide many services aside from filing tax returns. This includes, but is not limited to, consulting, advising, preparing audits, and maintaining clean financial records which are the backbone to any successful company.
CPA’s who deal with non-profit organizations understand that each non-profit is unique whether it is a charitable organization, religious organization, private foundation, or another type of non-profit. Whether you are a start up or have years of experience, you can trust an experienced CPA to help keep your non-profit going and guide you toward achieving your goals.
Finding a CPA
We suggest that you do your research on CPA firms who have experience working with other non-profit organizations. This can be done by navigating a firm’s website or giving them a call and meeting with a CPA to discuss how they can benefit you. Before your meeting, think about your goals, where you see your non-profit going, and what topics you would like to learn more about. Hiring a CPA will alleviate a lot of stress and help you be a better business owner. Get on the phone and make that call today.
-Darian Betosky, SME CPAs
Resources:
https://www.councilofnonprofits.org/tools-resources/public-disclosure-requirements-nonprofits
https://www.councilofnonprofits.org/tools-resources/federal-filing-requirements-nonprofits