Question

Why is it essential that the healthcare organizations such as nonprofit and Proprietary organizations report their cash flow statements, balance sheets, and income statements?

Answer 1

Answer ) From churches to youth organizations to the local chambers of commerce, nonprofit organizations make our communities more livable places. Unlike for-profit businesses that exist to generate profits for their owners, nonprofit organizations exist to pursue missions that address the needs of society. Nonprofit organizations serve in a variety of sectors, such as religious, education, health, social services, commerce, amateur sports clubs, and the arts.

Nonprofits do not have commercial owners and must rely on funds from contributions, membership dues, program revenues, fundraising events, public and private grants, and investment income.

Most of the time when a Non-Profit or Not-for-Profit is introduced, it elicits associations with their overall mission or goal. The organization may be raising funds for research, scholarships or providing meals to those in need. Whatever the mission or purpose of the Non-Profit, proper accounting is essential to long-term abilities to serve that mission.

Reliable accounting is vital for the success of any organization, and most definitely for Non-Profits that often must stretch every penny for essential programming. Accounting needs vary based on the size and programs of the organization. For example, a large Non-Profit might maintain an in-house staff that handles the majority of the bookkeeping functions. Often, these organizations can benefit from outsourced accounting services for month-end financial statements, tax preparation and audits.

On the other hand, smaller Non-Profits may be working with a limited budget or might simply not have the manpower to deliver on all of these accounting functions. Often times in Non-Profits, cross-functional roles fill the organization. It’s often an all-hands-on-deck situation. These types of organizations benefit from a partnership with accounting firms for monthly financial statements, management and general bookkeeping responsibilities.

No matter how big or small a Non-Profit is, professional and accurate accounting is the key to success. Money comes in and out with narrow operating lines and a skilled accounting firm can relieve the often-daunting financial tasks. This way the organization can get back to the heart of their work.