5 Differences Between Bookkeeping For-Profit and Not-for-Profit Organizations
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5 Differences Between Bookkeeping For-Profit and Not-for-Profit Organizations

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For-Profit and Not-for-Profit organizations have two ways of thinking. The bookkeeping elements will be different as well . Learn how ratio, balance sheet, taxes, income statements are handle ...

For-Profit and Not-for-Profit organizations have two ways of thinking. The bookkeeping elements will be different as well . Learn how ratio, balance sheet, taxes, income statements are handle differently for-profit and not-for-profit organizations.

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5 Differences Between Bookkeeping For-Profit and Not-for-Profit Organizations Presentation Transcript

  • 1. 5 differences between Bookkeeping For-profit organization and Not-for-profit organization Marks Bookkeeping Services 40 West 24th Street, Suite 3F Join us New York, NY 10010 http://www.marksbookkeeping.com Contact: info@marksbookkeeping.com Copyright© 2009 Marks Bookkeeping Services, LLC. - All Rights Reserved
  • 2. Objectives Taxes Balance Sheets Income Statements Ratio 1- The Objectives of the organizationFor-profit Not-for-profit Earn and Maximize profit Support a Cause Society needs Convince people to buy through commercial strategy Convince people to donate by making them that the product will satisfy their needs, or create new aware of the cause the organization is working needs. for. In both cases they want to make a sustainable business Nowadays, more organizations try to have a sustainable business approach these 3 levels : - Social - Environmental - Economical Join us http://www.marksbookkeeping.com 2 Copyright© 2012 Marks Bookkeeping Services, LLC. - All Rights Reserved
  • 3. Objective Taxes Balance Sheets Income Statements Ratio 2- The taxesFor-profit Not-for-profit Taxes on Net Incomes Some are Exempt from Taxes Corporates taxes is imposed in the United States at the The Not For Profit can be exempt from federal federal level and in most states. Taxable income varies income taxes if the organization meet the from 15% to 35 %. For Profit organizations have to pay requirements set by the Internal Revenue these taxes each year Service. One of this requirements : the organization must be organized and operated exclusively for exempt purpose. Join us http://www.marksbookkeeping.com Copyright© 2012 Marks Bookkeeping Services, LLC. - All Rights Reserved
  • 4. Objective The taxes Balance Sheets Income Statements Ratio 3- Balance SheetFor-profit Not-for-profit Balance Sheet Detailed Statement of Financial Position The For-Profit company have to show the assets – The organizations will provide a statement of liabilities on their balance sheet. The balance sheet has financial position. The financial reports will to show the company owner’s equity as well. provide information about revenues, support and expenses, but the emphasis will be not on profit or loss. Join us http://www.marksbookkeeping.com Copyright© 2012 Marks Bookkeeping Services, LLC. - All Rights Reserved 4
  • 5. Objective The taxes Balance Sheets Income statements Ratio 4- Income StatementsFor-profit Not-for-profit Income statements Actions done during the quarter Incomes statements have to be completed each quarter: A report providing all the actions completed has to revenues, gains, expenses and losses have to be be provided by the Not-For-Profit company. reported on it. A financial report will show information about revenues, support and expenses, but the emphasis is not on profit or loss. Join us http://www.marksbookkeeping.com 5 Copyright© 2012 Marks Bookkeeping Services, LLC. - All Rights Reserved
  • 6. Objective The taxes Balance Sheets Income Statements Ratio 5- RatiosFor-profit Not-for-profit Find the Best Profitably Ratio Administrative = <10% The Profitability Ratios is the ratio providing by the The organization must keep the fundraising company in general: it measures the firms use of its expenses and administrative overheads to less than assets and control of its expenses to generate an 10% of the budget. This information is usually acceptable rate of return. made available in the organizations annual report. Join us http://www.marksbookkeeping.com 6 Copyright© 2012 Marks Bookkeeping Services, LLC. - All Rights Reserved
  • 7. For more information Visit our website: Discover our blog: Mark’s Bookkeeping Services 40 West 24th St., Suite 3-F New York, NY 10010 Tel : 212 243 5757 info@marksbookkeeping.com Join us http://www.marksbookkeeping.com 7 Copyright© 2012 Marks Bookkeeping Services, LLC. - All Rights Reserved
  • 8. Photos Creditshttp://project33.org/http://blog.accountingcoach.comhttp://ottawawebsites.wordpress.comhttp://bozemanhelpcenter.orghttp://granthammond.comEach photo is copyright to the respected owner.Sourceshttp://dummies.comSmallbusiness.chron.com Join us http://www.marksbookkeeping.com 8 Copyright© 2012 Marks Bookkeeping Services, LLC. - All Rights Reserved