If you run a non-profit organization, you need to keep track of all incoming and outgoing funds. In particular, you should track and keep receipts for all expenditures and petty cash disbursements. As you collect funds from donors or through other venues, you should meticulously record these amounts. If you issue receipts, ensure that you understand the Canada Revenue Agency’s expectations.
Basic accounting methods tend to be the same between non-profit organizations and businesses, with a few key differences. In particular, businesses tend to generate balance sheets, which include owner equity and assets, while non-profit organizations create statements of financial position. These statements outline the organizations assets and liabilities to create a picture of its financial health. Finally, every year, you should file a T4117, Non-Profit Organization (NPO) Information Return. Make sure to maintain all records for at least six years.