excel-templates-for-nonprofit-accounting

All of the (Free) Excel Templates You Need to Master Nonprofit Accounting

Dan

The importance of accurate and detailed accounting for your nonprofit organization cannot be understated. Nonprofit financial statements enhance transparency, show the actual value of your agency, and demonstrate how effective you have been in supporting your cause. 

Furthermore, since all nonprofit records are public upon providing them to the IRS, it is extra important to make sure these documents are looking their best. 

Fortunately, the many complicated tasks involved in record-keeping can be considerably simplified by the use of excel templates. They can shorten the data entry process and can be designed to make automatic calculations to save considerable time and effort. Templates allow you to become familiar with complex accounting subjects a day at a time when you are just starting out and trying to learn. 

Here are the template options we will provide to help you master nonprofit accounting, whether your financial team is a user of accounting software or not!


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Budget

A nonprofit budget worksheet is an estimation of your expected income and expenses throughout the year. Your budget can often be called a business plan because it allows you to make important financial decisions regarding the future of your organization.  

It’s important to take the time to research carefully so that your predictions are as close as possible because this nonprofit budget template will determine your allocations for fundraising, projects, and timetables as well as other considerations. 

Your nonprofit budget helps you forecast decisions about the fund amounts needed in order for your organization to grow and fulfill the purposes of your cause, and a guide throughout the year with which to compare your actual results. 

This can help you determine how close you are to meeting your goals and budgeting requirements and what you need to do to ensure that you meet or exceed those expectations. 

excel-templates-for-nonprofit-accounting-budgetSalma knows sticking to a budget is crucial for her organization!

This budget is often a requirement when pursuing grant and funding opportunities and while it can be created by staff members, it should be approved by your nonprofit board of leadership to ensure that the values depicted within are consistent with your mission statement and growth directives.

Here are two budget templates to get you started! 

  1. Annual budget - a worksheet containing your overall financial plan for a one-year period

  2. Program based budget - a budgeting tool where information is organized around specific programs and services

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Statement of Financial Position (Balance Sheet)

A statement of financial position is a nonprofit balance sheet. Although similar, the nonprofit and for-profit versions have a few differences given the distinct organizational structures between for-profit and nonprofit organizations. The two main differences between a for-profit’s balance sheet and a nonprofit’s statement of financial position are what is included and how assets are recorded.

Assets - Liabilities = Net Income. One of the simpler accounting formulas, this is the root of the statement of financial position, which provides a snapshot of the critical elements, assets, and liabilities, that demonstrate how well your organization is performing. 

Assets are what you have or expect to receive, while liabilities are what you owe. 

Once you determine the difference between what you have/gain and what you spend, you have your net income. A positive number means you have a profit, while a negative number means you need to adjust spending or increase revenue to get back on a positive financial track.

For example, if your organization has $60,000 in a bank account from various revenue streams but has $70,000 in other expenses, your net assets calculation would be a troubling -$10,000:

  $60,000 (assets)

- $70,000 (liabilities)

- $10,000 (net assets)

This document is important because it allows you to remain legally compliant and provides the best comprehensive overview of your financial situation. Understanding how much funding you have available is key.

Your treasurer can be instrumental in preparing this document, but the board will certainly want to be kept apprised of the results. 

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Statement of Activities (Income Statement)

For-profit companies produce an income statement whereas nonprofits utilize a document called the statement of activities.  

While similar in some ways to the statement of financial position as it is concerned with assets and expenditures, the nonprofit statement of activities is primarily concerned with where the revenue comes from and where it is being used. 

The major thing to note with this key nonprofit financial statement is that donations are recorded in two ways:

  1. With donor restrictions

  2. Without donor restrictions 

On the expenditure side of things, there are also two main categories in which your expenses are sorted: 

  1. Program expenses report situations and money spent in support of your nonprofit's programs

  2. Support functions include development, managerial, and general expenses incurred by your agency

This report provides easy-to-read information for your board members to view where funds and expenses are allocated in order to locate trends and make important decisions about whether money needs to be redirected in different directions. 

excel-templates-for-nonprofit-accounting-income-statementSam is recording donations that will go on his organization's income statement this year.

Like the other reports before this one, it’s important that preparers ensure accuracy so the decisions made are based on factual information. 

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Statement of Cash Flows 

All organizations, regardless of organization type, look at a cash flow statement as a representation of how much money is coming in or going out during a specific time period. This information is usually broken down into three major components: 

  1. Investing activities

  2. Financing activities 

  3. Operational activities 

The significance of this report is that many nonprofits utilize it to monitor trends that involve asset inflow and outflow within a given period of time. For example, overtime cash flow statements can help provide insight into nonprofit spending and fundraising habits. 

This view of finances, in conjunction with the previous reports, provides a larger picture of the inner workings of your NPO and allows for the creation of more accurate budgets over time.

Your board, as well as accountants and/or analysts (if you’re lucky enough to have them, we know nonprofit finance department structure varies), will all want to watch these trends and determine appropriate actions based on directional flow and changing results over time.  

Pro Tip: If you want to significantly decrease the amount of time involved in preparing these documents, don’t forget that Springly offers an all-in-one accounting software package that will actually generate these reports for you automatically. Think of what you could do to grow your organization with that saved time in your pocket! 

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Functional and Natural Expenses Statement

The Functional and Natural Expenses Statement actually makes up two different declarations, which are required of nonprofit organizations by the Financial Accounting Standards Board (FASB).

Functional expenses organize expenses based on their categorical classification. Here are some examples of functions that are part of the functional expenses:

  • Program costs

  • Fundraising expenses

  • Management costs

  • General overhead

And then these results are further divided by their natural classifications, which are made up of the following categorical types: 

  • Utilities

  • Supplies

  • Rent

  • Insurance

  • Repairs

  • Depreciation

This document is an important tool to show donors or other interested parties how the nonprofit’s natural expenses are significant in the support of the functions and services it performs. 

While it sounds pretty complicated, once you take a look at this template (which you can certainly make use of!) it will seem much simpler! 

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General Ledger & Chart of Accounts

Simply put, the general ledger for nonprofit organizations lists all accounts. Now, in order to maintain some of that simplicity, a Chart of Accounts breaks the account listings into specific categories which makes it easier to find and analyze data. 

Smaller nonprofit organizations with fewer numbers of accounts to organize can get away with a simple ledger. Perhaps only five columns that include the transaction date and description, credit or debit information for specific transactions, and any modifications to the account value.

excel-templates-for-nonprofit-accounting-general-ledgerNancy is loving learning all about nonprofit accounting!

Larger organizations will undoubtedly require more specifics and categorical criteria to make it easier to find, access, and locate specific information quickly.

The nonprofit chart of accounts will involve five major categories. For the sake of organization, transactions are sorted into these categories by assigning a number designation which is provided to the left of the categories found below: 

  • 1000-1999 Assets (what you own)

  • 2000-2999 Liabilities (what you owe)

  • 3000-3999 Net Assets (your net worth)

  • 4000-4999 Revenue (money coming in)

  • 5000-9999 Expenses (money flowing out)

When properly set up and formatted, the ledger and chart can be a useful tool for use in budgeting and financial reporting and provides a nice system to help maintain your accounts.

It is certainly useful to have a free template to use for such a complicated organizational scheme. Fortunately, we have a sample for you!

We know that even though tricky tasks involved in record-keeping can be simplified by the use of excel templates, the templates themselves can still be a bit daunting. If you are overwhelmed, please know that this feeling is completely normal. Please reach out to us for any support you may need on your journey, we are here to help!

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Springly is trusted by over 20,000 nonprofits to help them run their organizations on a daily basis. Try it, test it, love it with a 14-day free trial!

 

Finance
Dan
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