Year-end

 Year-end brings accounting factors not often considered during the year when interim reports are generated. If you are performing the following tasks on a monthly basis, you are probably not doing it with a 10% administration fee. 

Let’s start with depreciation of capital assets and the  corresponding amortization of donation revenue where applicable. While this is often performed once at year-end, you could calculate these at the beginning of the year and allocate during the period using reoccurring entries. Remember, though, you will need to consider additions and disposals which occur during the year.

Next, many of you have bi-weekly payroll which means the first pay after year-end will include days which belong to the prior year requiring an accrual in old year and a reversal in new. Some systems are able to do this monthly if the feature is available and used correctly.

From there, we reevaluate leave balances by program such as sick and annual, and adjust the liabilities up or down accordingly, the opposing entries against your salary expenses. 

From there we may have to realign common services such as Administration and Facilities. Remember, facilites costs for areas where you carry out program delivery are not Administration, they are a program cost.

Next, we look at programs with deficits to see if we have deferred revenue available, and what the terms are regarding this according to your agreement.

If we do not have deferred revenue to cover a program deficit and the funder will not assist with the shortfall, where can you find other funding sources such as general donations, fundraising initiatives or interest revenue?

Finally, if you have a surplus in a program, return it to deferred where warranted, and refer to the funding agreement regarding disposition.

In closing, while you may have people who will take care of all this for you, you must understand how this works, and appreciate reasonable timelines. 

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