Effective financial reporting and annual closing are vital for not-for-profits (NFPs) to ensure accountability, compliance and financial health. By adopting best practices tailored to their unique needs, NFPs can enhance transparency, strengthen stewardship and support long-term success. Read on to discover 10 best practices that will keep your not-for-profit in top shape for year-end and beyond.

A comprehensive checklist helps ensure that all financial tasks are completed systematically. This includes reconciling bank accounts, reviewing outstanding invoices and confirming the accuracy of donor contributions. A standardized approach reduces errors and provides a clear roadmap for the closing process. It should include cleaning up or reserving old and stagnant receivables, reimbursable work in process and fixed assets no longer in service.

NFPs prepare several key financial statements: the Statement of Financial Position, which provides a snapshot of assets, liabilities and net assets; the Statement of Activities, which outlines revenue and expenses by program, administrative, and fundraising functions; and the Statement of Cash Flows, which shows the flow of cash through operating, investing and financing activities. Reviewing these ensures they present an accurate picture of the organization’s financial health.

Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett (CSH).