I am a
What are the major differences between for-profit and not-for-profit accounting?
Answers
There are significant differences in
My recommendation is to read the AICPA's A&A Guide for not-for-profit entities and the current AICPA
Good luck!
I made the transition from for-profit manufacturing to Goodwill Industries -- a social service organization that uses thrift retail stores to fund the job training and placement programs for disabled and disadvantaged people.
As CFO at Godowill, it was a shock how much work falls on the accounting department of a NFP. The regulatory reporting, governance and compliance issues, combined with the tracking of restricted and unrestricted funds, add significant complexity for a $30M revenue operation. Budgets are tight and erery penny must be carefully tracked. We keep in mind that some elderly person on a fixed income sends us a $20 donation and expects us to use it wisely.
You must be committed to the mission to stick with it. In addition to Frank Pasacreta's suggestions, I recommend the following:
- review the IRS Form 990 instructions to get a sense of everything that must be tracked.
- review GAAP accounting for NFP entities. There is a good publication by the AICPA on Not-For-Profit Organizations.
- meet with some other cfo's of NFPs, especially within the segment that you are considering.
Good luck with your research. The job is challenging but it can also be very satisfying to know that you are making a difference to peoples' lives.
Patrick Duff
CFO, Morgan Memorial Goodwill Industries, Boston