Our thanks go out to Eric Fraint and his staff for presenting our May 21 Expert Webcast on Reconciling Your Fundraising and Accounting Systems. Eric Fraint, CPA, founded Your Part-Time Controller, LLC, which focuses on delivering general accounting and financial services to nonprofit clients. Fundraising staff is frequently confronted with the situation where financial reports from the development office don’t match the reports from the accounting office. In his webcast, Eric offered explanations and solutions to this problem.
Click here to download the webinar materials
Discrepancies in reports often stem from the following issues:
- Timing of the income is an issue at month-end, and especially around year-end.
- Conditional gifts are subject to a certain action from your organization. They create different reporting treatments because accounting does not recognize these gifts but development does.
- All the revenue from multi-year gifts from pledges or grants is recorded in the first year by accounting. Development recognizes the income in the year it is received.
- Valuation of stock and other non-financial assets may be different, particularly regarding the treatment of commissions.
- Other possible causes are classifications of the income, treatment of pledge payments, reporting on a cash versus accrual basis, communication breakdown, and errors.
Many of these situations can be resolved with better communication between development and accounting, new or improved report formats, monthly reconciliations between the two systems, and documentation of policies and procedures. If data entry is done in both systems, the discrepancies can be minimized with coordination and cooperation between the two functions. To save time and minimize errors from double entry, DonorPerfect offers an integration with QuickBooks.
