Basic Reports for Nonprofit Organizations

Like many organizations and businesses, there are specific reports that nonprofit organizations have to provide when reporting about their organization. These report not only help determine the financial health of the organization, but many are also required by funders when applying for grants. The reports also convey important financial information to the board of trustees and the government.

The following are the basic financial reports that nonprofit organizations should include:

  • Statement of Financial Position: This is also referred to as a balance sheet. This summarizes the assets, liabilities and net assets of the organization at a specific date. It is like taking a picture of the organization at that particular period.
  • Statement of Activity: This is the income and expense statement. It shows an overview of the financial activity over a period in time. This statement will also show income with the expenses taken out, which will result in a profit or a loss.
  • Statement of Cash Flow: This statement summarizes the resources that are available to the organization during the reporting period and how the resources were used. This is one of the most useful reports because it shows the income coming and the expenses going out. A statement that shows projected cash flow can also be helpful to the board in determining if there will be any shortfalls or overages for the budget period.
  • Statement of Functional Expenses: This report is for all expenses related to the program services and supporting services. Expenses for each program and shown divided into the various programs. The expenses under the supporting services are usually divided into two sections, the management and the general expenses, and fundraising expenses.

There are other report that can be used such as government information returns, payroll tax returns, reports to founders, management reports, budget monitoring reports, and analysis of statements and investment reports. The report that your nonprofit needs is determined on an individual basis. Remember nothing replaces a qualified accountant that can take care of all the needs of the nonprofit.