The approaching end of the fiscal year can often bring a sense of unease for nonprofit directors. It entails compiling large amounts of information and making crucial decisions. However, with meticulous documentation and a well-defined end of year checklist, preparing for the fiscal year end doesn't have to be overwhelming!
Fiscal Year End Date
The term "fiscal year-end" refers to the conclusion of a 12-month accounting period that does not align with the typical calendar year. It is during this period that organizations calculate their annual financial statements. Unlike the calendar year, a company's fiscal year can vary based on its specific needs and may not necessarily end on December 31st. This flexibility allows organizations to select any date as their fiscal year end, as long as they consistently adhere to it year after year. While June 30th is widely recognized as a common fiscal year end date, different industries may have varying fiscal year end dates to accommodate their unique requirements.
What is a Nonprofit Organization?
A nonprofit organization is a legal entity organized and operated for a collective, public, or social benefit, in contrast with an entity that operates as a business aiming to generate a profit for its owners. Any revenues that exceed expenses must be committed to the nonprofit’s purpose, not taken by private parties. A wide array of organizations are nonprofit, including most political organizations, schools, business associations, churches, social clubs, and consumer cooperatives.
Nonprofit Fiscal End of Year Checklist
- Review fundraising plans to see if you’re on target. Whether it’s good news, or you missed your goal, you need an accurate picture of where your finances stand to prepare for the following year.
- Launch one last fundraising plan to raise funds before your fiscal year end date. The end of the fiscal year can be a great time to run one last fundraising campaign. Sometimes donors have money they need to disperse before the fiscal year ends!
- Review major donor pledges and thank your donors. It’s important to know where your major donations are coming from. Review all major donor pledges for the year and make sure they’re on track. A handwritten note is a great way to say thank you!
- Review board giving commitments. Has your board committed to giving money this year? Review your commitments and make sure they’re all fulfilled before the end of the fiscal year.
- Invest any remaining funds before the end of the fiscal year. If you have funds left in your budget for the year, this is the time to spend them! Evaluate where those funds can make the biggest impact and spend them before the year ends.
- Hold an annual meeting. You should meet with your board at least once a year. Review current fiscal year performance and set your budget for next year
- Prepare financial reports. This part of closing out the fiscal year can be a chore! If it’s not something that’s your specialty it’s ok to hire someone to help. Since nonprofit organizations are accountable to the donors, founders, volunteers, program recipients, and the public community it’s very important to have accurate reports.
- Approve next year's budget. This is the time to set new goals for the upcoming year and to evaluate where you might want to invest and where you need to cut back.
Once your fiscal end of year checklist is complete you will probably feel a huge sense of relief and will be ready to focus on new goals in the fiscal year ahead! Each time you close out a fiscal year it will become easier and more routine. Closing out a fiscal year properly is important to the financial health of a nonprofit organization.
Exym Mental Health Billing Software + Nonprofit Organizations
If you are a nonprofit mental health organization utilizing Exym mental health billing software as your EHR solution, you will find the reports within Exym to be incredibly beneficial. Should you require assistance in accessing these reports, do not hesitate to reach out to our dedicated support team. Visit our Finance page to learn more about the ways Exym can help you maximize revenue and manage your nonprofit's billing and finances.
Exym is a comprehensive EHR software solution designed specifically for behavioral health agencies. Trusted for 20+ years, our intuitive and customizable software empowers providers to improve client outcomes, manage revenue cycles, and increase agency efficiency. Exym allows you to spend more time on what matters most- the clients in your care.
Book a demo today!