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What unique accounting issues may be faced by a nonprofit organization?
Like profit organizations, nonprofit organizations are usually faced with some complex accounting issues. One of these issues is how to track the grants they receive from different well wishers. Since these organizations are not legally supposed to adhere to certain accounting procedures and reporting at the end of their fiscal year, it may quite hard for the donors or even its board members to monitor the movement of such grants. Thus the fact that there is no standard procedure makes it a real accounting issue for these organizations.
Another real accounting issue is how to track the pledges made by its different donors. The main issue here it to accounting how much of such pledges has being settled and how much is due. Moreover, managing the payroll of such organizations is still an accounting issue for nonprofit organizations. These firms usually lack the required expertise to effectively manage this expenditure issue. Other accounting issues which these firms usually have to face are how to manage its cash flows not to mention how to understand them and also their optimal staffing levels of such organizations.
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