It’s no secret that nonprofits are under constant pressure to do more with less. In the era of big data, this pressure is only going to intensify. That’s why it’s more important than ever for nonprofits to have a strong financial management system in place. A good system will not only help you keep track of your revenue and expenses, but also help you meet compliance requirements.
Tracking donor restrictions and understanding the implications of those restrictions on revenue recognition are common challenges for nonprofits — especially if they try to manage these important metrics with spreadsheets. Luckily, there are solutions, like Sage Intacct’s Nonprofit Revenue Recognition and Restriction Tracking, that can make the process much easier.
Revenue Recognition Standard for Nonprofits
Updated revenue recognition standards for nonprofits issued as part of FASB ASU 2018-18 and ASC Topic 606 represent significant changes that increase the complexity of nonprofit accounting.
Under Topic 606, for example, revenue from nonreciprocal contributions is recognized when any donor-imposed conditions or restrictions are met. This can mean a performance metric (such as the number of people served) or a restriction on the expenditure’s timing or purpose.
When a donor imposes conditions or restrictions on their gift, it’s critical for a nonprofit to track its expenditures very carefully and recognize revenue only when those conditions have been met. Tracking these milestones in spreadsheets, however, is cumbersome, subject to mistakes, and difficult to keep current.
Sage Intacct Simplifies Revenue Recognition and Tracking
Sage Intacct automates this common nonprofit accounting challenge while improving visibility into your organization’s revenue and performance with easy-to-use revenue recognition tools.
For instance, nonprofits can enhance donation tracking by creating condition-based milestones and defining a schedule to recognize the associated revenue automatically. Similarly, you can track donor-imposed restrictions and automate journal entries as those restrictions are released.
Automating revenue tracking and recognition enhances the accuracy of your organization’s financial reporting and its compliance processes, while demonstrating transparency to current and prospective donors. Using Sage Intacct, nonprofits can highlight how funds are being used for their intended purposes, without having to wrestle this data out of spreadsheets or prepare reports manually.
Additional Features Sage Intacct Offers
Other tools in the Sage Intacct solution include customizable report writing tools, chart and graph generators, and the ability to automate reports including GAAP financial statements, Form 990 submissions, FASB compliance reports, and other key documents.
We Can Help You Get Started with Sage Intacct
If you’re looking for a more efficient way to track and recognize your nonprofit’s revenue, Sage Intacct may be the answer. Our team has years of experience helping nonprofits implement Sage Intacct and look forward to learning about your mission and helping you. For a demo, or to speak with our Sage Intacct team, contact us.
In the meantime, see how you can manage grants more effectively with Sage Intacct in the video below: