Though the terminology differs, nonprofits and for-profits use the same accounting principles. Nonprofit accounting provides financial transparency that makes donors feel comfortable and assured that the organization is spending money wisely to further its goals. Additionally, sloppy or inaccurate accounting can lead to problems with the IRS; such problems include possibly losing nonprofit status, hefty

Nonprofits must keep overhead costs to a minimum while also ensuring they provide the organization with the opportunity to grow, so careful, ongoing cost management is a must. They’ll also be used throughout the year as a way to compare actual income and expenses versus the projections listed in the budget. Keep in mind that