Significance Of Maintaining Proper Booking Records For Churches And Nonprofit Institutions

For initiating good habits, as such there is no time boundation, which goes same for maintaining all the information regarding income and expenditure of any institution. Be it a profitable or a nonprofitable institution, it becomes very essential for them to keep a track on all the flows of funds, as proper financing or accounting records are the foundation of a well run nonprofit organisation.

A fine maintenance of records would help the institution in serving the members in a better and enhanced way that includes the following points:

A proper recording system helps the organisation in operating effectively.
A list of proper records helps in minimising the risks to the organisation.
It helps in ensuring accountability.
It also helps in facilitating accurate and timely reports.

In addition, for meeting all the government obligations it is very important to maintain a proper record keeping system.

Book Keeping

All the books of finance and accounting records need to be kept in a secure environment either on premises or in the online-hosted systems. However, it is up to the nonprofit institution whether they want to maintain the records and books manually or are going to use some kind of software to serve their purpose in a better and productive way.

Entire financial or accounting records need to be maintained in an electronic or paper format. The reason behind is, records in a hard copy format, depending on the regulations, need not retain all the paper if an absolute electronic image of the documents can be produced.

This will allow all the electronic reports to be in a format that could be traced to relevant supporting source documents, which could be provided in a readable and useable format. All source documents, such as sales invoices, purchase invoices, and various relevant documents should be retained, even if you maintain your reports and records electronically.

The majority of chapels as well as nonprofit institutions maintain their records for a minimum of six years from the end of the previous tax year they relate to. Also, this retention period could be stretched if the returns are filed late or if there happens to be a notice of objection or appeal in place.

Picking the Right System

Going for the apt nonprofit accounting software is very essential, as it can offer invaluable assistance when it comes to maintaining all the reports and records. For all this, your organisation just needs to evaluate the cost and benefits carefully to find out the software that best fits the requirements of your chapel or nonprofit institution.

Maintaining complete, accurate, and timely financial records and producing useful reports is not only vital for fulfilling all the government requirements, but it is also necessary for the effective operation of all the chapels and nonprofit institutions.

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6 Money Habits That Can Make You Debt-Free

1. Money Habits

Do you pay 10% into your IRA and 401K as the first thing you do when income arrives? Or do you pay the debt collector first before any other consideration? Do you spend all of your money trying to make your small business profitable as the only priority?

2. Money Mindset

Do you focus on increasing your assets and your return on investments through smart strategies, in addition to earning a good income? Or are you hyper focused on improving your FICO score and keeping the debt collectors happy? Or do you spend most of your time and money networking in local meetings and attending marketing seminars to try and drum up more business?

3. Plan for Escaping the Rat Race and Living the Rich Life

Have you adopted the Thrive Budget, Modern Portfolio Theory, easy-as-a-pie-chart nest egg strategies and the 3-Ingredient Recipe for Cooking Up Profits? Or are you clinging onto investments that have lost value, praying for a Hail Mary miracle that erases your losses and achieves unbelievable gains, and borrowing money to stay afloat in the meantime? Are you so afraid of the idea of investing that you invest only in yourself and your business, but get tempted to buy gold because that’s what everyone else is doing?

4. Health, Health Insurance and Health Savings Accounts

Do you have a high deductible with health savings account that you manage for 10% ROI? Or, are you stressed out all of the time, worried about your health, angry at all of the ways you are being eaten alive by bills, and paying an arm and a leg for health insurance because you have to? Or, do you spend most of your “extra” money on fun and pleasure instead of health insurance? Are you uninsured?

5. Outlook on Business

Do you work hard, course correct, adopt best business practices and keep work and family and home life separate? Or are you so worried about your finances that you are crabby with your family and draining your life savings to try and hang onto everything, including a failing business or investment? Have you borrowed from family and friends to buy another self-help seminar or online marketing course?

6. Outlook on Life

Do you take responsibility for your fiscal health? Or do you feel like a victim? Or are you just perplexed as to why all of your Law of Attraction seminars ended up costing you so much money, instead of bringing the riches they promised?

Once you understand how your thinking has trapped you in a cycle of over-spending and debt, you can start planning and acting more like an investor who is taking ownership of her life and is determined to get financially free. You will shift out of debt consciousness and into prosperity and abundance. Out of victim mentality and into ownership. Out of trying to appease the credit card companies, banks, debt collectors and others who hound you for a payment, and into a workable Debt Management Plan that allows you to contribute to your own Retirement Plan and basic needs, while you pay off debt on the best possible terms. You will transform out of depression, disgust, rage and/or helplessness into being a conscious creator of your world and our world at large.

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Financial Statement Basics and Presentation: The Balance Sheet

Financial Statement Basics: The Balance Sheet

The Canadian Balance Sheet shows the financial position of an entity which is why this statement is commonly referred to as ‘The Statement of Financial Position.” The first key point to note is that the balance sheet is prepared to show the company’s position at a specified single point in time (Example, as of December 31st, 20xx) whereas other financial statements such as the Income Statement are reported to show the company’s operational performance for a specified length of time such as, “for the year ended December 31st, 20xx.” In this example, the income statement is said to cover an entire year from January 1st – December 31st which is also known as a calendar year-end.

Furthermore, the balance sheet consists of three important elements to consider. It reports the balances of all assets, liabilities and equity accounts for the company. It is critical to understand the fundamental accounting equation in the preparation and presentation of the balance sheet where Assets = Liabilities + Equity.

Assets: contains all resources that the company owns at the balance sheet date. This includes both current and non-current assets that the company utilizes in order to generate future economic benefits. The most common current assets listed on the balance sheet includes cash, accounts receivable and inventory which are resources that are anticipated by management to be converted into cash within a year or the entity’s operating cycle, whichever is longer. Accounts receivable is simply the amount of money owed to the company by its customers which is generated from the sale of goods and services on account. Non-current assets, therefore, contains all resources owned by the company that have a useful life of more than one year. These assets are often referred to as Capital Assets which include equipment, buildings and land. Notice that all assets mentioned thus far whether current or non-current can be classified as Tangible Assets which contain physical substance. However, the balance sheet also presents Intangible Assets which are reported as non-current capital assets as well, since they have a useful life of more than one year but do not have any physical substance such as goodwill and patents. The sum of the current and non-current assets will equate to and be reported on the balance sheet as Total Assets of the company.

Liabilities: represents the claims against the company’s assets that have not been paid at the balance sheet date. Therefore, they are obligations to the company’s creditors. Just like assets, liabilities are subdivided into current and non-current. Accounts Payable is a frequent account that can be seen on the balance sheet and is essentially the direct opposite of the accounts receivable balance. While accounts receivable are amounts owed to the company from a customer sale on account, accounts payable are amounts owed by the company to its creditors arising from purchases on account both of which are either expected to be collected or paid typically within 30 days. Non-current liabilities represent obligations that will not be settled for more than one year or the company’s operating cycle, whichever is longer. Long-term liabilities (non-current) found on the balance sheet include long-term bank loans and notes payable. The creditor’s claims against the assets can be seen by examining the fundamental accounting equation stated above where the entity’s assets equal the creditors’ claim which represents liabilities plus the owner’s claim of the assets representing the company’s equity.

Equity: according to the fundamental accounting equation if we rearrange this to solve for equity, one can conclude that Equity = Assets – Liabilities. Upon closer examination, it can be clearly seen that equity represents the value of a business after liabilities have been reduced from the company’s assets. Often equity is referred to as the residual interest of a company. Also, it is important to note that the creditors’ claims to the assets are always settled first before the owner’s claim can be realized.

Presentation Example for the Statement of Financial Position


Statement of Financial Position

As at December 31st, 20xx


Current assets:

Cash $2,000

Accounts Receivable 1,000

Inventory 3,500

Supplies 500

Total Current assets $7,000

Non-Current assets:

Building $75,000

Equipment 7,000

Total Non-Current assets $82,000



Current liabilities:

Accounts Payable $3,000

Wages Payable 1,500

Total Current Liabilities $4,500

Non-Current liabilities:

Lease liability 1,000



OWNER’S NAME, Capital 83,5000



The above illustrated example for the statement of financial position shows various key features. The heading indicates the name of the company, clearly indicates what type of financial statement is shown and what period it is covering. Furthermore, the statement of financial position is visual a representation of the fundamental accounting equation. The left side of the statement represents assets which is also the left side of the equation. The right side of the statement represents liabilities and owner’s equity which in turn captures the right side of the equation. As a result, the statement of financial position is perfectly balanced only when total assets equals total liabilities and owner’s equity.

After examining the above illustrated equity section of the balance sheet and noting the name of the company reporting the statement, it is important to recognize that the form of organization in this example is that of a proprietorship and not a corporation. The difference in the balance sheet reported by a proprietorship and by a corporation lies primarily within the equity section. In a proprietorship, the owner’s capital includes the initial investment in the business, net income (profits) or net loss (losses) and is reduced by any drawings (withdrawals made by the owner for personal use). However, in a corporation, these amounts are split up into two common accounts: Contributed Capital and Retained Earnings. Contributed capital also known as share capital represents the investments made by the shareholders’ of the corporation. Retained Earnings is the cumulative income/loss amounts of the corporation since inception and also includes all dividends paid out to the shareholders. Dividends are similar to drawings in that they both reduce the equity account since they are distribution of equity payments to the shareholders’ or the owner respectively.

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