Cherie Trewevas (Business Partner at BNZ) recently wrote an article which perfectly highlights an important message regarding NFP reporting changes - that these changes will benefit the sector! These benefits are a greater level of transparency of the activities of the Charities, a higher level of accountability and increased confidence in the sector which can only lead to increased donations
Indian Newslink recently posted the following article by Cherie Tewavas as part of the BNZ non-profit series. Cherie Trewevas shares her insights on building the financial capacities of Non-Profit organisations.
Compliance is one of those words that sends a shiver down the spine of many people working in non-profit organisations. Changes to the rules surrounding the reporting of financial accounts for non-profits came into effect on July 1, 2015.
These changes have only exemplified these feelings of dread; however, after a few deep breaths and a little time considering the changes, we can see that they can actually bring benefits.
First, charities are now required by law to follow External Reporting Board (XRB) standards. There are too many details to go into here, so if would like to see more, please visit the XRB website.
The changes themselves will generally hold non-profit organisations to a higher standard of financial reporting than what they have previously been required to do.
However, because of the way non-profits have been separated into four different tiers, these effects will be felt differently across the sector depending on the size of the operation.
Smaller entities may well find the accounting process is now easier than before.
You can find a good summation of the tiers and how the changes affect each on the RSM website.
While the detail understandably goes into some depth, here are a few of the key points that the changes address: