If you run a non-profit, you’re probably busy focusing on your mission, fundraising, and serving your community.
But have you finalized your budget for 2025?
Beyond sustainability, financial planning should focus on staying compliant, managing audits effectively, and avoiding financial roadblocks that could impact your organization’s future.
Budgeting for 2025: Are You Ready?
A well-planned budget isn’t just a nice-to-have; it’s essential for responsible financial management.
Your 2025 budget should account for operating costs, program expenses, fundraising initiatives, and potential economic changes. Having a finalized budget gives you a roadmap for the year ahead and ensures that your organization remains financially stable.
Without a clear financial plan, unexpected costs or shortfalls could derail your non-profit’s ability to serve its mission effectively.
Understanding Non-profit Audits: The Three Levels
Non-profits, especially those handling significant funds, need to be prepared for audits.
Audits involve financial oversight, as well as maintaining donor trust and compliance. There are three levels of audits non-profits may encounter:
Full Financial Audit – This is the most comprehensive level, where an independent CPA firm examines your financial statements to confirm their accuracy. Organizations with substantial revenue or government funding often require full audits for transparency and regulatory compliance.
Monitoring – A step below a full audit, monitoring involves ongoing financial oversight, often required by grant funders or stakeholders who want regular financial check-ins.
Review – Less extensive than an audit, a financial review involves an accountant analyzing financial statements for accuracy, though it does not provide full assurance of compliance like an audit would.
Understanding these levels helps non-profits determine what level of financial scrutiny they may face and how to prepare accordingly.
Why Compliance Is Critical for Non-profits Over $300,000 in Revenue
Nonprofits with annual revenue exceeding $300,000 must pay special attention to compliance.
Many states and grant agencies require financial audits or reviews once organizations surpass this threshold. Failing to meet compliance requirements can result in loss of funding, penalties, or even jeopardized tax-exempt status.
Staying compliant means protecting your non-profit’s ability to operate effectively and maintain credibility with donors and grant providers.
The Challenges of Non-profit Audits
Handling non-profit audits can be daunting.
The process involves extensive documentation, financial transparency, and navigating complex regulations. Some accounting firms hesitate to work with non-profits due to the added layers of compliance and red tape.
However, partnering with a financial firm experienced in non-profit audits can make the process smoother. A knowledgeable accountant can help you prepare financial statements, maintain compliance, and avoid audit-related stress.
Whether you’re finalizing your 2025 budget or preparing for an audit, financial management is key to your non-profit’s success. Don’t let financial uncertainty hold you back—get your non-profit’s financial house in order today.
About Real Finance Group
Real Finance Group LLC is a resolute and full-service accounting firm, dedicated to empowering Business Owners and Non-Profits by optimizing their financial operations. Our expertise lies in refining accounting structures to ensure the delivery of precise financial data, which is crucial for informed decision-making. We are committed to providing personalized accounting solutions with a focus on efficiency and accuracy, tailored specifically to meet the distinct needs of each client.
Furthering our commitment to fostering business growth, Real Finance Group LLC offers comprehensive training workshops. These are designed for any audience eager to master business financial management and planning, as well as non-profit management. Our approach is not just supportive but transformative, aiming to elevate the financial insights and operational effectiveness of all our clients.
For more information, please contact us today.
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