Accounting for Donations Received at Year End

by Kristen M. Conway, CPA, Senior Associate

Posted on October 29, 2014

Tracking when donations are received is always important, but it is even more crucial at year end as your nonprofit needs to ensure that each donation is recorded in the correct fiscal year.

To ensure your accounting records are accurate, it is crucial to ensure correct tracking of the date each donation was received. This can prove to be more difficult at year end due to the volume of donations received at year end than other times of the year. But remember you don’t have to process and deposit all of the donations before year end, just know which ones came in before and after year end. This could mean simply placing a sticky note on a pile of mail with the date “December 30” on it or separating the donations received before year end on one side of the office and donations received after year end on the other side. Another solution could be maintaining a log to track all of the donations and the date received.

The date when your organization receives a donation is crucial as that date determines which fiscal year to record the donation. Donations need to be recorded in the accounting records as of the date they were received (even if the donations were not deposited to the bank until January). Each nonprofit should find a process that works best for them given the number of staff and volume of donations received at year end.