Tracking Financial Positions on a Program Level

Having a clear view of your financial position is essential to bookkeeping for nonprofits. Not only is it an important tool; but a statement of financial position is also required for your nonprofit’s annual audit.

Also known as a balance sheet, financial position is an up-to-date report of your organization’s assets, liabilities, and equity. It functions as a snapshot of your nonprofit’s finances at a specific moment in time.

With this data, you are able to make important decisions for your nonprofit’s short-term and long-term fiscal health.

However, if your nonprofit has a lot of programs, it can be difficult to keep track of everything for your financial position. Good Steward Financial Company can help.

Good Steward Financial Company is a nonprofit bookkeeping service that specializes in 501c3 services, including annual audit assistance, QuickBooks bookkeeping services, payroll processing, and fractional CFOs.

Our mission is to share our financial expertise so that your nonprofit can stop worrying about money and focus on what really matters: helping people.

Whether you are looking for a full-service nonprofit bookkeeping service or simply need some help streamlining your QuickBooks Online bookkeeping services, we are here for you!

What is Included in a Financial Position?

When your accountant is looking at your financial position during your annual audit, they will consider the following:

• Whether your organization has enough cash to cover bills and operating costs
• Whether accounts receivable are increasing or decreasing over time
• Whether liabilities are decreasing or increasing
• How much debt do you have and how long it will take you to pay it off

These factors all boil down to one question: do you have more assets than liabilities?

When you prepare your financial position, you will be dealing with three categories in this simple equation: Assets (what you own) – Liabilities (what you owe) = Net Assets (your equity).

Examples of assets include cash, property, and long-term receivables, and examples of liabilities include accounts payable, expenses owed to vendors, and organization debt.

When you’re preparing your financial position, you will organize your assets by liquidity (ease of accessibility) and your liabilities by the due date. Your current liabilities are due within the next year, whereas long-term liabilities will be paid over multiple years.

As a nonprofit, you will then want to categorize your net assets into three subcategories:

• Assets that can be used without donor restrictions
• Assets with donor restrictions related to purpose or time
• Assets with donor restrictions that are held in perpetuity and cannot be used to fund organizational expenses

However, you don’t have to do all of this bookkeeping by hand!

How to Use QuickBooks Online Bookkeeping Services to Track Your Financial Position on a Program Level

If your organization already uses QuickBooks bookkeeping services to track your finances, it can also be a helpful tool for preparing your statement of financial position and organizing your program-level data.

The most important way QuickBooks can help is by revealing the true cost of your nonprofit’s programs. Programs have a lot of moving parts, and it can be difficult for nonprofits to know exactly what they are spending and gaining.

We recommend using the “classes” feature, which allows you to organize each program’s costs.

To use the classes feature, first, you will need to turn on class tracking in settings:

1. Click Settings → Account and Settings.
2. Select Advanced.
3. Scroll down to Categories, and click Edit.
4. Turn on Track classes.
5. Click Save and Done.

Then, create a new class for each program:

1. Click Settings → All Lists.
2. Select Classes.
3. Click New and enter a name for your program.
4. Save.

QuickBooks can also assist your financial position preparation by tracking your funds with the Parent accounts feature and tagging revenue and expense transactions with the location feature.

QuickBooks Full Service Bookkeeping and Other 501c3 Services with Good Steward Financial Company

This article is only the tip of the iceberg! When it comes to statements of financial positions and QuickBooks full-service bookkeeping, there is more to learn than we can explain in just one blog post.

That’s why we are currently offering a FREE QuickBooks review. Our financial experts will review your QuickBooks and make suggestions to optimize how you approach bookkeeping for your nonprofit.

Good Steward is a nonprofit bookkeeping service based on Biblical ideals of altruism, dedication, and integrity, so you can trust in all of our 501c3 services.

Contact us today for your free QuickBooks review and to learn more about how we can transform your nonprofit!