Understanding Your Financial Reports
Financial statements provide critical insights into your program's financial health. Whether NOPI manages your financials or you handle them independently, these key areas will help you interpret your reports effectively.
2025 Updated Financial Statement Format
To improve clarity, we have adjusted how shared administrative costs ("admin allocation") are displayed. Previously, these costs were shown within revenue, making it challenging to track actual income. Now, they appear as an expense category labeled "Fiscal Sponsorship Admin Cost Expense." This update makes it easier to see your program's true revenue and expenses.
Opening Balance, In-Kind Contributions, and Net Revenue
With our transition from QuickBooks Accounting to QuickBooks Advanced in 2025, your financial statements now include an opening balance reflecting available revenue at the start of the year. This balance, along with your program's current net revenue, is located at the bottom of your financial statement. In-kind contributions will also be included under Other Revenue at the bottom of your statement if your program receives them.
Cash vs. Accrual Accounting
NOPI is shifting to accrual-basis accounting in 2025 to align with best practices in fiscal sponsorship. Here's what this means:
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Cash Basis: Records transactions when cash moves in or out.
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Accrual Basis: Tracks income when earned and expenses when incurred, regardless of cash flow.
Accrual accounting provides a more comprehensive view of your program's financial status, especially for reimbursable grants or when planning fund advances. However, we may switch between cash and accrual depending on your inquiries about available cash.
Pro Tip: Many small nonprofits start with cash-based accounting for simplicity but transition to accrual as they grow. Learn more about the differences in this article.
Updated Account Categories
We have streamlined financial categories to enhance clarity and compliance with Generally Accepted Accounting Principles (GAAP). These updates ensure:
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Simplified and meaningful categories.
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Clearer tracking of revenue and expenses.
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Consistency across your financial tools, including Bill Spend.
Need Help?
Join our open office hours every Thursday from 11 AM - 1 PM EST, or email accounting@thenopi.org for assistance.