501(C)(3) Financial audit checklist
The idea of using an outside service to perform a financial audit on a 501(C)(3) corporation may appear like an extravagance, as the goal of non-profit organizations is generally to limit costs not directly related to the mission. To the contrary, having regular professional audits performed can be vital in identifying risk, preventing problems and reassuring donors.
Preparing for a financial audit is important for all organizations, including not for profit businesses. The auditor will need easy access to financial documents, such as investment-related documents, accounting records, and physical inventories. Rather than scrambling to pull this information together prior to an audit, you can save time and money by making sure all bookkeeping records are kept up-to-date, well-organized, and reconciled throughout the year.
Working with a team that understands your business
When you’re dealing with millions of dollars, an abundance of care is necessary. Staying on top of the accounting of non-profit organizations saves the CPA, who performs the financial audits, valuable time. In general, the auditor will provide a list of financial records they’ll need so you can assemble documents in advance, saving both time and money.
It’s also helpful to organize documents pertaining to the organization itself, such as articles of incorporation, financial policies, board meeting minutes, grant agreements, exemptions letters, funding documents, contracts, leases, and insurance policies. The CPA will require access to all of these records in order to perform a full and accurate audit of the business.
Keep your organization growing
While non-profit organization audits are necessary for compliance reasons, they can also serve as a valuable tool for analyzing financial performance and identifying opportunities for growth. The success of 501(C)(3) corporations depends on funding from state and federal agencies as well as individual and corporate donations. And the ability to understand and function within the regulatory environment is also critical.
At GYL, we have specialized staff, with experience and expertise in providing accounting services for non-profit entities, who can ensure your corporation remains compliant with all regulations. Additionally, we offer a full range of accounting and business consulting services to help improve operations going forward.
Non-profits offer a vital service to the community, but they can’t stay functional unless they keep finances on track. Call for a free consultation today and find out how partnering with GYL can help you accomplish that goal.