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About Accounting

About Accounting

According to the local laws and regulations of most countries, all registered NGOs are required to maintain a system for recording and submitting all types of financial transactions made by them for the purposes of implementing projects and running their organization. Since finances are a crucial part of organizational management, it is always a better idea to maintain a ‘Financial Statement’. Even donor agencies would be most happy to render immediate funding support to such NGOs which have systematic policies in place for effective financial management.

ADVANTAGES

Reducing Fraud

Systematic accounting process with proper internal controls helps in reducing frauds in an organization.

Securing future:

The present financial condition of any organization determines its future. In a similar manner, NGOs should also opt for sustainable use of finance. This simply means that NGOs should spend in their present ventures, keeping in mind the future. After

Making productive decisions:

With sound financial management, NGOs can make more productive decisions concerning resource allocation, fund raising, fund mobilizing and other undertakings. Good decision making skill enables right amount of funds to be invested at the right place.

Enhancing credibility

Managing finance is a matter of skills and tactics that ideally changes from time to time. With excellent finance management, NGOs enhance their image that enhances its value and making them more credible. By framing well defined financial plans and

Strengthening fundraising efforts

Most of the NGOs solely survive on its funds. Well organized financial resources help in strengthening fundraising efforts by giving an overall idea about available finance and the amount of finance that needs to be accumulated.

CSR Funding

If you maintain your account then you will get benefited in CSR Funding.

Books and Documents to be maintained for accounts management in NGOs

  1. Account Books and Documents to be maintained

    1. Cash Payment/Receipt Vouchers & Book
    2. Bank Payment/Receipt Vouchers & Book
    3. Summary/Daily Petty Cash Book
    4. Journal Vouchers and Journal
    5. General Ledger
    6. Fixed Assets Register
    7. Contract/Registration Documents
    8. Attendance Register
    9. Budget Copies of various grant
    10. Utilization Certificates
    11. FCRA and other relevant Registration papers
    12. Copies of Consultancy agreements
    13. Capital assets approvals
    14. File of original bills of assets purchased
    15. Copies of all Contracts and agreements.
    16. Stationery Register
    17. File containing Bank Mandate and authorized signatories.
    18. Quotation file for all purchases
    19. Advance Payment Register (Advance to third parties & Staff Advances)
    20. Check issue register
    21. Cancelled check register
    22. Donation receipt issue register
    23. Receipts and Payment Account

    This is like a summary of the cash and bank book and starts and ends with the cash and bank balances. It differs from the income and expenditure statement in that the income and expenditure statement does not show details of loans, sale of assets, recovery of staff advances etc. At the end of every quarter a receipts and payments account is prepared.

    24. Preparation of the Final Accounts

    Final  accounts  include  a  balance  sheet  and  income  and  expenditure  account and a receipts and payments account would need to drawn up at the end of the year.”

Documents Required for  Accounting

Documents Required for Accounting

  1. Bank Statements
  2. Bills & vouchers
  3. Receipts book
  4. Donor’s Details
  5. Beneficiary Details

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