Where nonprofits and churches books go wrong
A gift for the building fund and a gift for general expenses go into the same bank account. Unless each restricted gift is tracked, the board cannot tell how much is truly free to spend.
The weekly offering is counted by volunteers, deposited later and recorded by someone else. A missing count sheet or a deposit that does not match the count is hard to explain months later.
Event tickets, auctions and dinners mix a gift with something the donor receives, which changes what the donor's receipt has to say.
Accounts we set up for nonprofits and churches
Your chart of accounts is reviewed during onboarding. These are the lines that usually matter most in this kind of business:
| Account | Why it is separate |
|---|---|
| Unrestricted contributions | general giving and tithes |
| Restricted contributions, by fund | building, missions, scholarships and grants, each visible on its own |
| Grant income and grant spending | so reports to a funder come straight from the books |
| Event and fundraising income | with the cost of the event beside it |
| Program expenses | spending on the mission itself |
| Management and general | administration, insurance, bank fees |
| Clergy and staff compensation | kept in line with payroll reports |
Records the IRS describes
Publication 1828 says churches, as distinct from other religious organizations, are not required to file Form 990, 990-EZ or 990-N, and that tax-exempt organizations, including churches, must keep books and records needed to justify their exemption. Source: IRS Publication 1828, Tax Guide for Churches and Religious Organizations.
Publication 1828 says a donor cannot claim a deduction for a single contribution of $250 or more without a written acknowledgment from the organization, and that a church must give a written statement to a donor who makes a payment over $75 that is partly a gift and partly for goods or services. Source: IRS Publication 1828, Tax Guide for Churches and Religious Organizations.
Many small exempt organizations that are not churches may file the Form 990-N e-Postcard if gross receipts are normally $50,000 or less. The IRS says an organization that fails to file for three consecutive years automatically loses its exempt status. Source: IRS: Form 990-N (e-Postcard) for small exempt organizations.
How long to keep them: the IRS says three years in most cases, longer in some situations, and at least four years for employment tax records (IRS: How long should I keep records?).
Cash through the year
Giving often rises in December and around major holidays and dips in summer. Grants arrive in lump sums and are spent over months. A monthly report by fund shows the board what is available now, not just the total in the bank.
Year-end is the busiest time for a treasurer: giving statements in January, the annual return for organizations that file one, and the budget for next year. Current monthly books make all three faster.
Contractors, employees and year-end forms
Churches and nonprofits that pay musicians, speakers or contractors may need year-end reporting under the same rules as businesses; Publication 1099 sets a $2,000 threshold for tax years beginning after 2025.
Clergy pay has its own tax rules. We record what the payroll provider or the church pays and keep the records together; your tax preparer or payroll provider decides the treatment.
What the monthly service includes
Every month, the same close the bookkeeping page describes: transactions categorized, bank, card and loan balances reconciled to statements, a profit and loss and balance sheet delivered, and a short list of questions instead of guesses. The books stay ready for your tax preparer at year end. For nonprofits and churches, that close also covers:
- Income and spending recorded by fund, with each restricted fund's balance
- Deposits tied to count sheets or giving platform reports
- A one-page report the board can read, with budget beside actual if you have one
Need more than the books? The service levels page describes a monthly review and CFO-style planning on top of the same close.
How remote onboarding works
- Tell us about your books. The short form asks what your books live in today, how many transactions you have a month, how many bank, card and loan accounts, how far behind the books are and what you need. You can ask for a 15-minute call instead of an email reply.
- Written quote and engagement letter. We review what you sent and reply with the scope and monthly price in writing before any work starts.
- Access, without passwords. QuickBooks Online: you invite us as an accountant user. Xero: you invite us with the Advisor role. Excel or Google Sheets: you share the workbook and we send a folder for statements. Nothing yet: we recommend QuickBooks Online or Xero and set it up in your name. You keep ownership and can remove our access.
- Opening balances and a close day. We confirm your accounts, collect recent statements and your prior-year return or financial statements, check opening balances, and agree the day each month's books are delivered.
What helps most for nonprofits and churches:
- Your list of funds and any restrictions donors attached
- Giving platform reports and recent count sheets
- Your most recent annual return or financial statements, if any
Price
These are the starting prices the quote form uses. Your written scope sets the final price before any work begins.
| Transactions a month | Monthly bookkeeping | Catch-up |
|---|---|---|
| Up to 100 transactions a month | From $450 a month | $300 per month behind |
| 100 to 300 transactions a month | From $750 a month | $450 per month behind |
| 300 to 600 transactions a month | From $1,200 a month | $700 per month behind |
| Over 600 transactions a month | Custom quote | Custom quote |
- 2 bank, card or loan accounts are included; each additional account is $35 a month.
- Books kept in Excel or Google Sheets add $100 a month; starting from nothing adds a one-time $400 software setup.
- A monthly financial report and KPI summary is $125 a month on top of current books.
Prices shown are starting estimates, not quotes.