WCC-Consulting

Attention Not-for-profit executives!

For the first time in 10 years Uniform Guidance has been updated (Section 2 C.F.R. 200) – single audit threshold increased from $750,000 to $1,000,000.

For more updates read my article on our website at:
https://wcc-consulting.com/blog/blog_pages/2024_uniform_guidance_update/

According to nonprofit quarterly - women make up 73% of the American nonprofit workforce, while only 45% had women among their executives. From large nonprofits with budgets over $50 million - only 17% had a female CEO.

At WCC (a woman owned business) we strive to help women in not-for-profit industry to create a real partnership to build a strong financial future of the mission-driven organizations.

https://wcc-consulting.com

How to read nonprofit financial statements?

Nonprofit financial statements are unique and differ from a regular for-profit organizations. There is unique terminology that is used exclusively by nonprofits (like donor restricted revenue and net assets etc). While the topic is very extensive I wanted to list out five main components of financial statements if any not-for-profit organization:
1. statement of financial position (similar to balance sheet of a for-profit entity)
2. statement of activities (similar to income statement for a for-profit entity)
3. statement if functional expenses (unique to nonprofits)
4. statement of cash flows (a cash flow is a cash flow 🤑)
5. note to the financial statements (these include additional financial information useful to the financial statements users)

For more information - please read my blog article at https://wcc-consulting.com/blog/blog_pages/How_to_Read_Nonprofit_Financial_Statements/nonprofit_financial_statements.html

Do you really know how much cash you have?

Recently one of my clients asked me what the best practice is when it comes to reconciling your bank accounts. Since the process can be tedious it is natural to try and avoid doing it for as long as possible. I always recommend establishing a routine procedure based on the size of your organization and following that schedule to a T.

Some smaller organization with small volume of daily transactions can get aways with reconciling their accounts on a monthly basis. Larger organizations should perform bank reconciliations on a weekly or even daily basis depending on the size of the organization.

Below I will list 4 benefits of performing regular bank reconciliations:

1. Accuracy and accountability

2. Fraud detection

3. Cash flow management

4. Investment portfolio oversight

For more detailed information of each of these benefits visit our website at www.wcc-consulting.com and read our Blog article.



http://wcc-consulting.com/blog/blog_pages/Importance_of_regular_bank_reconciliations_for_nonprofit_organizations/bank_reconciliation.html

Today I wanted to talk about the importance of regular and accurate bank reconciliation for your not-for-profit organization or small business.

There are 4 distinct benefits to completing timely bank reconciliations (actually there are more than that, but I wanted to focus on these 4 today):

1. Accuracy and accountability – regular bank reconciliations ensure that financial statement stay up to date with its current real time cash and investment financial position.

2. Fraud detection – regular bank reconciliations can help catch discrepancies and unauthorized transactions faster (instead of long time after the fact or not catching it at all)

3. Cash flow management – regular review of cash and investment real time positions can help with strategic cash management and allocation of resources.

4. Investment portfolio oversight – regular review of the investment positions and performance can help to make timely strategic decisions according to ever-changing market conditions.

These four benefits are not all-inclusive and there are many more benefits regular bank reconciliations provide for a not-for-profit organization or a small business. For more information, please visit our website at https://wcc-consulting.com/

In the nonprofit world, time is opportunity.

This means an opportunity to build and develop relationships with donors and volunteers.

CEOs and Executive Directors of most small nonprofits spend more than half of their time performing administrative, clerical, and bookkeeping work.

Every hour spent on tasks that could be automated or outsourced is time not spent on building and developing donor relationships.

Now don't get me wrong, some administrative work is essential for growth. But it also cost you money without generating contribution revenue.

It doesn't make sense for you to be doing bookkeeping or scanning documents when you could be developing relationships with donors and building capital campaigns.

As a CPA who specializes in working with not-for-profit organizations, I can help you ensure financial sustainability and growth, manage cash flow and free up your time.

Click here to schedule your free Revenue and Expense & Cash Flow analysis with me. https://wcc-consulting.com/

Today I wanted to talk about the importance of accounting transparency for not-for-profit organizations.

In a world where missions are centered around positive societal impact, accounting transparency plays a pivotal role in building trust amongst donors, grantors, beneficiaries and broader community. Donors are the lifeblood of nonprofits, and they want to ensure that their donations make the maximum amount of impact. Transparent accounting practice helps to provide an insight into the day-to-day operations and the impact the organization is making day in and day out. The ability to provide this insight builds trust with donors and encourages continued support as well as potentially attracting new contributors.

In addition to that, financial transparency helps to keep up with regulatory compliance requirements to avoid any legal issues. This, in turn, builds reputation with the funders and governmental organizations, contributing to long-term sustainability of not-for-profits. Financial and accounting transparency is paramount to building strong, resilient organizations. It’s not merely a “best practice”, it’s a commitment to the values that drive not-for-profits in their pursuit of a better, more compassionate world.

At WCC consulting we are committed to providing the best advisory services to not-for-profits and help building financially strong organizations for long-term success/ https://wcc-consulting.com/ 🫶

When it comes to payroll, there are several important forms and deadlines that employers must keep in mind - read below to learn more about the must know payroll deadlines and forms:

1. Form W-2: Employee Wage Statements
This form outlines the wages paid to employees, as well as the taxes withheld throughout the year. For businesses not-for-profit organizations, the deadline to distribute Form W-2 to employees is January 31st. Additionally, the deadline for filing with the Social Security Administration (SSA) is also January 31st.

2. Form 941: Employer's Quarterly Federal Tax Return
This form summarizes the federal income taxes withheld from employee wages. The filing deadlines for Form 941 are quarterly, falling on the last day of the month following the end of each quarter (April 30, July 31, October 31, and January 31).

3. Form 940: Employer's Annual Federal Unemployment (FUTA) Tax Return
This form is used to report annual Federal Unemployment Tax Act (FUTA) tax and is filed with the IRS. There is also a separate State Unemployment Tax that needs to be paid and filed within each respective state on a quarterly or monthly basis (depending on the state and/or preference).

4. Form 1099-NEC: Nonemployee Compensation
This form has to be used if business or not-for-profit organization has engaged independent contractors and paid nonemployee compensation.The organization is required to provide each contractor with form 1099-NEC by January 31 and is required to file this form with the IRS by January 31st as well.

5. Form 1096: Annual Summary and Transmittal of U.S. Information Returns
This form serves as a summary for forms 1099-NEC (described in #4). The deadline for filing this form with the IRS is February 28th (or March 31st if filing electronically).

6. Affordable Care Act (ACA) Reporting: Forms 1094-C and 1095-C
These two forms are required to be filed by "applicable large employers". The forms are used to report information about health coverage offered to employees. The deadline for submitting 1095-C to employees is March 2nd and filing with the IRS deadline is February 28th (or March 31st if filing electronically). "Applicable large employers" include (but not limited to) employers with full-time employees of 50 or more.

7. State and Local Payroll Tax Filings
In addi tion to federal requirements, businesses and not-for-profit organizations should be aware of state and local tax obligations. Each state may have its own forms and deadlines for reporting state income tax withholding, unemployment taxes, and other state-specific requirements.

If you have any questions regarding any of the above - reach out to us for a free consultation at https://wcc-consulting.com/

Reminder for important nonprofit income tax filing deadlines:

Nonprofit organizations have 4,5 months to file their income tax return after their fiscal year-end. So if the organizations' fiscal year-end falls on December 31st, the deadline from filing its tax return is May 15th. A six-months extension can be filed if needed, extending the filing deadline up to November 15th.

If the fiscal year-end falls on June 30th (for example), the corresponding deadlines are November 15th and May 15th with extension.

Benefits of outsourcing bookkeeping and accounting services for nonprofits:

In today's fast paced ever changing world time becomes one of the most valuable resources for any organization. In the not-for-profit industry, where staff resources are often constrained it is even more prevalent to outsource day-to-day accounting and bookkeeping to professionals.

Outsourcing allows nonprofits to tap into the high quality accounting and financial reporting services. Hiring a professional CPA to help with internal accounting very often saves time and money on the back end when it's time for an audit. It will also give a piece of mind during the audit.

In addition to that, outsourcing accounting services frees up time and resources to focus on what matters most - the mission. This time can be used to develop new programs (or to scale the existing ones) and to build and maintain relationships with donors and partners. Outsourcing accounting and bookkeeping also yields more time for the essential team members to focus on strategic planning, which very often allows for a more consistent revenue generation.

If you'd like to learn more about outsourced accounting and bookkeeping services that WCC offers - send us message directly or reach out at www.wcc-consulting.com

Top 3 accounting challenges all not-for-profit organizations face:

1) revenue recognition and fund accounting - unlike for-profit organizations, not-for-profit organizations heavily rely on donors and grantors for their revenue. To keep track of different revenue streams and donor restrictions at the same time can be a very complex task and can get very convoluted even for experienced accountants.

2) compliance with regulatory requirements - not-for-profit organizations (depending on their size and location) are subject to numerous rules and regulations from the specific accounting standard to reporting deadlines and special reporting with governmental agencies. It is paramount to keep up with all regulatory requirements and accounting standards to be in compliance with regulations and keep the 501 (c) 3 status.

3) resource constraints and cost management - many not-for-profit organizations operate with very limited resources. Finding a balance between programmatic, fundraising and administrative expenses is paramount to any not-for-profit success. Effective financial management is essential to appropriately plan and budget between these categories to ensure a sustainable future, so that the organization can continue fulfilling its mission.

If you have any questions about the specifics of not-for profit accounting or need help navigating regulatory requirements - reach out directly or schedule your free consulation at www.wcc-consulting.com

What are the main differences between Forms 990 and 990-EZ?

Form 990-EZ is a simplified version of form 990 (income tax return for nonprofit and exempt organizations). All nonprofit organizations are required to file an income tax return with the Internal Revenue Service (IRS). Some smaller, less complex organizations can file form 990-EZ, which is an easier, shorter form than the full form 990.

To qualify for a 990-EZ filing, the organization's gross receipts must not exceed $200,000, with total assets under $500,000. With that, those are the main differences between form 990 and 990-EZ: complexity and size are the two key factors.

For very small nonprofit organizations, there is another form available that is even simpler than 990-EZ: 990-N (also known as e-Postcard). Nonprofit organizations with gross receipts under $50,000 may qualify for filing form 990-N.

Correct accounting and bookkeeping are paramount to knowing what form is right for your organization.

Schedule your free consultation for nonprofit accounting and bookkeeping at www.wcc-consulting.com or reach out directly.

Not-for-profit accounting is unique and differs from accounting for organizations that target generating profits. The main differentiation factor of not-for-profit accounting is creating transparency for the public and the funders. This unique requirement emerged as fund accounting requirement. There are three main distinguishable requirements in fund accounting:

1) segregation of funds: not-for-profit accounting requires clear segregation of funds within an organization, with each fund representing a distinct accounting entity

2) restriction of the funds: not-for-profit accounting distinguishes between restricted and unrestricted funds. Restricted funds being earmarked for specific purposes (designated by donors or grantors), while unrestricted, can be used at the organization's discretion

3) accurate allocation and classification of revenues and expenses: not-for-profit accounting requires that financial transactions are recorded in a way that reflects their specific purposes, ensuring transparency and accountability.

Schedule your free consultation at www.wcc-consulting.com

Exciting news! Weber CPA Consulting (WCC) is thrilled to announced that we are officially launched our services dedicated to serve not-for-profit organizations.

At WCC we understand the paramount importance of financial management and accounting transparency for organizations with purpose. Our team is passionate about the industry and serves as a partner in achieving your mission by providing fractional CFO, accounting and bookkeeping services. Our CPA's are dedicated to provide valuable insight and advice on your financial operations so that you can focus on what matters most - making a difference in the community.

Whether you are a smaller organization or a larger charity, we are here to be your trusted financial experts and advisors. Join us on this exciting journey of strengthening financial foundation of organizations that make an impact in the world.