At first glance, the non-profit world might seem to be a strange fit for accounting majors or CPAs. In truth, non-profit organizations need accountants to help manage their finances. And, working with them provides a steady and satisfying CPA career path that allows accountants to invest their time and talents in ideas and organizations that they are passionate about.
What Are Non-profits
According to the U.S. tax code, there are over 30 kinds of organizations that are tax-exempt. These range from the less common labor organizations and business leagues to traditional charitable organizations. Non-profit organizations have to offer some sort of benefit to the community in order to qualify for their tax exemption. Because of this, any funds the organization has access to must be used according to strict guidelines and an accountant working for or with a non-profit will likely have to help ensure those guidelines are followed.
How Accountants Can Serve in Non-Profits
There isn’t a one-size-fits-all CPA career path in non-profit sectors. A CPA can build a career out of working for a variety of non-profits or in a more private capacity working for one. If a CPA is working in a more advisory way, responsibilities might include helping a non-profit set up its budget, preparing financial reports, or assistance with any tax issues that might arise.
Depending on the size of the non-profit, there may be one or several positions above that of an entry-level accountant. In that case, a new hire would likely report to a Senior Accountant and may be responsible for handling detailed assignments such as receivables, payables, property, and payroll. Responsibilities may also include managing the general ledger and preparing and reviewing financial statements and reports.
As time passes at a bigger non-profit, CPAs may be able to rise in the ranks to advise newer employees. At higher levels, accountants at non-profits may also be tasked with developing special reports and running analyses of financial data. More senior accountants may also be in charge of internal audits. This includes tests of accounting and internal control systems and can mean the regular testing of document approval through statistical samples, using specially developed tests to expose defalcations and other means of operational testing that might inform recommendations for future profit improvement and company health.
Higher-level jobs an accountant might have in the non-profit sector include a controller and Chief Financial Officer (CFO). A controller is essentially the Chief Accounting Executive in charge of the management of all lower-level accounting personnel. The CFO works with the other heads of the company and advises on issues regarding financial stability and liquidity and financial reporting and may also be responsible for maintaining relationships the company has with financial institutions.
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