Key financial reports are essential tools for assessing the financial health and performance of your nonprofit organization. They provide valuable insights that help you make informed decisions and communicate your financial status to stakeholders. ๐๐๏ธ
The primary financial reports every nonprofit should regularly review include the Income Statement (also known as the Statement of Activities) or Profit & Loss, the Balance Sheet, and the Cash Flow Statement.
For our clients we also add a monthly summary that highlighting key changes and updates ๐คฉbut aside from that bonus feature we offer, here are the basic key reports to get really familiar with:
Income Statement/ P&L BVA: This report outlines your nonprofit's revenue, expenses, and net income or loss over a specific period. It helps you assess the organization's operational efficiency and whether your programs are financially sustainable. ๐ผ๐ฐ
Balance Sheet: The Balance Sheet provides a snapshot of your nonprofit's financial position at a particular point in time. It lists assets, liabilities, and net assets (equity). It's crucial for understanding your organization's overall financial stability. ๐๐ณ
Cash Flow Statement: This report tracks the flow of cash into and out of your nonprofit. It helps you manage cash effectively, ensuring you have enough liquidity to cover operational expenses. ๐ธ๐
Regularly reviewing (and understanding) these reports and sharing them with your board and other stakeholders encourages transparency and accountability, building trust and confidence in your organizationโs financial management. ๐ค๐
One of the best parts of our work is helping you navigate your financial reports and make data-driven decisions. Our team ensures you have a clear understanding of your financial health, empowering your organization to thrive.
