NGO Bookkeeping Tips

Friday, March 23, 2012 - 14:10

I recently hosted a successful NGO governance seminar and had quite a bit of questions relating to the right accounting package and where to begin with regards to good record keeping. I have audited a couple of NGOs and the main reason NGOs outsource their accounting is because it is often too costly to hire a full-time accountant or just fear of having to do bookkeeping in-house.

Here are some of the questions I have been asked and my best response to it:

I need to start recording the NGO’s income and expenses. Where do I begin?

  • Well, if you have opened a bank account for the NGO at the very beginning, then processing entries from your bank statements is not a bad idea;
  • Another option is to use the slips and whatever supporting documentation you have with regards to the various financial transactions that have taken place in your organisation and sit down with a person knowledgeable in the area of accounting to assist you with the appropriate record keeping approaches.
What is the correct basis of accounting for transactions?
  • From funder agreements that I have read through, the most acceptable basis is generally accepted accounting practices or the cash basis of accounting;
  • The cash basis is recording expenses as you pay them and income as you receive it.
What accounting package is best for us to use?
  • As an auditor, I know of some very good accounting solutions that have helped many of our NGO clients;
  • The one package is Pastel Express. It is a start up package for small businesses and organisations. I still find it a bit expensive and the annual renewal license fee required can be a bit costly for smaller organisations;
  • A free solution available is TurboCash. Many use this, but support is required if you want to start using this package;
  • Another package that comes highly recommended is Omni Accounts. It is not well recognised in the market, but coming from an auditor, believe me, this is a great accounting solution;
  • Omni Accounts is easy to use and easy to learn. Pricing starts from about R399, with no renewal licence fee and you can create up to three companies;
  • I am working on releasing a useful NGO Accounting Pack very soon, but I will certainly keep you posted.
For more valuable Accounting tips and financial management advice, be sure to join us on 31 March 2012 at Radio CCFm for our Accounting and Tax Seminar.

For more about the Seminar, refer to www.ngoaccounting.org/accounting--tax-management-seminar.html.

- Cheryl-Lynn, Freeman, auditor and creator of NGO Accounting.

Comments

Did u finally do the accounting pack for NGOS? how do we get it
Hi, How can I get hold of the cd you provided at the accounting and tax seminar for NGOs? Thanks
you can contact our team 011 056 5202 ask for for Ace he will help you.
I think there are two ways that this matter can be dealt with depending on whether the European Funder is depositing the money in a Euro Account or ZAR Account.If you have a Euro Account I think the salary can be paid straight from theEuro Account to the ZAR Account since the employees are in SA.There is an Advantage as well as a disadvantage regarding this method.If the exchange rate is favorable it means employees will get more money but this will mean that the contracts of employment will need to be changed so that employees will aprove of it.If they agree it means every month they will get half their salary pegged at the Euro rate covering half of their salary and this will mean their salary will vary every month unless the company is using an average rate per year or per time period but this will also have complications. The simple way will be to pay the Employees in ZAR but transfer half the wage bill from the Euro Account so that it becomes easier on reporting back to the Euro Funder.
I wish to get guidance on paying salaries in foreign currency. We have been locally funded in the past but we have just signed up a funding agreement with a European donor and will receive the funding in Euro. The new funder will cover 50 % of our staff salaries which will be paid to staff in Euro, the other 50% will be funded from local sources and paid in Rand. My challenge is understanding the tax/PAYE implications of this, how do we deal with this in a manner that complies with SARS requirements ?
Hi Please forward me financial management guide and excel schedules. Thanks
Hi, You can send me your email address and I will forward you a free financial management guide and excel schedules. My email address is cheryl@allaboutmzansi.com. You can also visit www.ngoaccounting.org
Hi I am currently part of a team in the process of assisting an exisiting NGO find its feet. I am tasked to assist with setting up budgets and the governance framework for the NGO. Any asssitance will be welcome. I am looking for examples of budgets and any templates I can use. Where would be the best place to start looking. Kind regards
Yes, most definitely. I hosted an accounting and tax seminar for NGOs. I provided a cd with useful information and a copy of the free accounting software available. The only cost to an NGO will be initial training on the package. i audit NGOs and too often I see thousands going into very simple bookkeeping. 
These could be very useful for NGOs to maintain their regular charges and cost.