New to the nonprofit world? Welcome! Working for a nonprofit organization is truly rewarding and allows you to make a noticeable difference in the world.
And if you’re new to nonprofit accounting too, well, you’ve come to the right place to learn all about the industry and how to get started.
Below we’ll review the differences between NPO accounting and for-profit accounting, introduce nonprofit accounting software, and share additional resources to bookmark for reference.
Nonprofit Accounting vs For-Profit Accounting
You might think that accounting is the same in both worlds. After all, accounting is about balance statements, credits, and debits, right? However, they couldn’t be more different, using different software, different terminology, and different processes.
What’s the difference between the two? Nonprofit accounting uses the following:
- Funds – Nonprofit accounting uses funds. Funds are separate entities, requiring their own balance sheet, expenses, and income. And while your funds can be in the same checking or savings account, they have to balance separately.
- Nonprofit Accounting Software – To help track and balance the various funds you’re working with, it’s best to use nonprofit accounting software, also known as fund accounting software. This software is designed specifically for nonprofits, and a much better option than using traditional accounting software and trying to customize.
- Terminology – All industries have their own terms and the nonprofit world is no different, especially when it comes to accounting and finance. This glossary list is a great way to get accustomed with the words you’ll use pretty regularly throughout your NPO career.
Intro to Nonprofit Accounting Software
Mentioned above, nonprofit accounting software is your go-to platform to keep your funds, grants, and other financial-related tasks straight.
Why use a nonprofit-specific software?
Fund accounting is truly unique. So trying to take a regular accounting platform and make it work for your nonprofit is bound to cause more headaches than actual results.
Fund accounting software is designed with your nonprofit in mind. Not only can it help you manage funds and grants, but it can also track and report on budgets, payroll, fundraising campaigns, and more.
Who makes fund accounting software?
There are quite a few companies who design and sell NPO software:
- ACS Technologies
Nonprofit Accounting Resources
The following resources can help you learn more about nonprofit accounting and fund accounting software:
- The CBS blog – Our blog is full of articles on fund accounting software solutions, ways to improve donor loyalty, and more. Bookmark our blog so you can come often for the latest articles
- The Nonprofit Times
- Abila’s Resources – Abila produces a lot of research-driven resources on donor management, donor loyalty, fraud prevention and more
- Blackbaud’s YouTube channel – Watch tutorials, customer success stories, and conference recaps to stay up-to-date on the latest in nonprofit accounting
Nonprofit accounting can take some getting used to, especially if you’ve been in the for-profit world for a long time. However, leveraging the above resources can help you adjust easily.
We also offer training and webinars to help you learn how to use Abila and Blackbaud accounting solutions. Let us know how we can help you as you start your journey in the nonprofit world.