Accounting pitfalls can wreak havoc on your nonprofit’s financial statements and status. If not caught early, these pitfalls can be hard to find and undo.

How can your NPO avoid accounting pitfalls? With compliance, people, and processes.


For most NPOs, compliance is tricky. Trying to manage multiple funds from different sources can be very hard. However, successful nonprofits work hard to ensure their records are accurate, spending more hours on compliance than others.


Having the right people at your organization is key to accounting success. And this doesn’t just mean hiring people with the right skill set. It’s about bringing people on board who embody your organization’s core values and mission.

You can ensure your people are successful by offering training, hiring people with the right skill set, and staffing departments appropriately.


Internal processes are necessary for your accounting department to function. They help ensure your data is secure, your employees follow the right protocols, and your organization is ready to handle an upcoming audit.

While documenting your processes is a good way to inform your employees, you should also talk about the processes and routinely review them to keep everyone aware and up-to-date. As regulations and laws change, it’s also important to update your processes so they keep you compliant.

See the challenges that nonprofits face regarding compliance, people, and processes below in an infographic from Abila:

2016 nonprofit finance study infograph