Communication breakdowns between a not-for-profit
organization's development and accounting departments can lead
to confusion, embarrassment and, worse yet, financial problems.
Organizations, therefore, must take proactive steps to facilitate
collaboration between these two critical functions. Here are three
tips:
- Get a Handle on the Differences
Accounting and development typically record their financial
information differently, which is why they can produce numbers that
vary, but nonetheless are both correct. The development department
likely uses a cash basis of accounting, while the
accounting department records contributions, grants, donations and
pledges in accordance with Generally Accepted Accounting Principles
(GAAP). How does this difference play out? Let's say a donor
makes a $10,000 payment in April 2015 on a pledge made in December
2014. The development department will enter the amount of the
payment as a receipt in its donor database in April. The
