What does a Nonprofit Accountant Do?

​Most nonprofit leaders understand that nonprofit accounting is different than for-profit accounting. However, if they’re being honest, they may not entirely understand how it’s different, nor could they necessarily explain exactly what their nonprofit accountant does.

And yet, having this kind of information is critical for many reasons, including:

• Overseeing staff across the areas of accounting and finance.
• Hiring into the role to replace your former accountant or meet the increasing demands of a growing organization.
• Articulating the benefits of using a third-party accounting service or employing in-house accounting staff to key stakeholders.
• Maintaining credibility with donors, sponsors, and partners.
• Upholding internal controls to safeguard the organization against errors and financial malfeasance.
• Obtaining funding through public and private grants.

​Now that you know why understanding the role is so important, let’s dive into what a nonprofit accountant does so you can be better informed!

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Nonprofit Accountant Responsibilities

A standard nonprofit accountant job description will include the following responsibilities:

• Recording donations and other revenue from all sources.
• Maintaining accurate financial records.
• Preparing grant budgets and grant reports.
• Monitoring expenses and tracking budget versus actuals, including grant funded projects, for program managers and the leadership team
• Generating key financial reports (such as the Statement of Financial Position, Statement of Activities, and Statement of Cash Flows) in a timely manner.
• Reconciling bank and credit accounts to ensure transactions are properly recorded.
• Tracking grant spending and available balances.
• Ensuring proper expense allocation in compliance with grant and contract requirements.
• Maintaining internal accounting controls to mitigate errors and prevent fraud risk.
• Maintaining compliance with applicable nonprofit financial regulations and GAAP standards.
• Preparing required financial documents for programmatic and financial audits.

​In some instances, especially at smaller nonprofit organizations, the role may also include additional responsibilities such as:

• Sending donation acknowledgements to donors that match accounting records.
• Recording payroll, employee benefit, and tax withholding expenses.
• Assisting with filing applicable taxes, where necessary.
• Selecting financial software and tools.
• Assisting with developing the organizational budget.
• Advising on the financial aspect of technology-related decisions.
• Presenting financial information to the board.

Learn How Nonprofits Can Reduce Accounting Expenses

Occasionally, a nonprofit accountant will be asked to “wear extra hats” to cover adjacent areas of the organization that are understaffed. And, while they may be available to do so, stretching them too thin can compromise their focus, reducing their efficacy in their main role. For that reason, your accountant should not be tasked with responsibilities like: 

• Making major financial decisions.
• Owning long-term financial planning.
• Making investment decisions.
• Handling complex tax filings.
• Fundraising or soliciting donations.
• Writing grant proposals.
• Overseeing lease and rental contracts.
• Planning or managing programming.
• Measuring the success of programs or initiatives.
• Managing employee benefits.
• Hiring or firing employees.
• Managing online donation systems.
• Troubleshooting software issues.

​Instead, nonprofit accountants should remain focused on items directly under their purview, like financial tracking, reporting, and compliance, while leaving these other items to the organization’s leadership, including an internal or outsourced CFO, development staff, program managers, HR team, operations staff, or IT department. 

Find Out How Nonprofits Can Use Accounting Support to Gain Funding

When you need to hire a nonprofit accountant, we can help! We offer both part-time accounting services as well as accounting recruiting to nonprofit organizations looking for accounting support and staff. Our large team of fractional accountants has a vast array of experience to draw on in helping with all types of engagements, especially in nonprofit roles. At ASP our consultants have a deep understanding of what makes nonprofit accounting unique, making them a valuable asset to any organization looking to grow and expand its reach. Contact us for more information today!