The Evolution of Accounting for Nonprofits

Accounting comes in many forms and has been exponentially growing as the years go by, affecting nearly every aspect of business – even for those that don’t make profit. The evolution of nonprofit accounting started small through bookkeeping and cultivated into using key software which has overall contributed to nonprofits’ success. Technology has allowed fewer errors and more efficient calculations in order to further the mission of the non profit. The advancements of today’s accounting technology is ever-growing, and consequently, so has the world of nonprofit accounting.

A Change in Tracking

To begin, when nonprofit businesses were still growing, financial record-keeping was often informal. Smaller charitable organizations relied on simple bookkeeping methods to track their income and expenses. These records were typically maintained by the founders or volunteers, and there were no formal accounting standards specific to nonprofits. As nonprofits grew in size and complexity in the beginning of the 20th century, the need for more structured accounting practices became evident. Here, the accounting profession established generally accepted accounting principles (GAAP) that applied to both for-profit and nonprofit entities. However, as nonprofits had unique characteristics, the financial reporting standards began to differentiate between the two types of businesses.

Accounting for Nonprofits Going Forward

As time went on and the 21st century took off, there were significant advancements in technology, which had a profound impact on nonprofit accounting. Accounting software such as Sage Inacct emerged, streamlining financial processes, improving accuracy, and reducing manual errors. In recent years, there has been a growing emphasis on outcome measurement and impact reporting for nonprofits. Donors and stakeholders increasingly want to see the tangible results of their contributions. Nonprofits have adapted their accounting practices to measure and report their impact on the communities they serve. And in 2014, a company was created in order to aid these nonprofits in their accounting software.

Alta Vista Technology emerged, and we set our goals on helping businesses in need of accounting software. So, if you are looking for new nonprofit accounting software to help you make a difference and keep your accounting in order, drop us a line at 855.913.3228 or fill out our simple web form. Someone will reach out within one business day to help you find just the right software to service your community. At Alta Vista Technology, we take pride in being part of your solution!