Nonprofit organizations use four main financial reporting statements: 1) balance sheet, 2) income statement, 3) statement of cash flows, and 4) statement of functional expenses. Financial reports should be offered at every board meeting, allowing time for members to regularly review the organization’s income statement showing income and expenses for the period compared to the budget, a balance sheet showing assets and liabilities, and the budget – designed to align with programmatic work – which should be approved annually before the start of the fiscal year. Annual financial reports, audit reports, and IRS 990 information should be reviewed by the board once a year (Propel Nonprofits).
Documents found in this section provide information on managing risk, readable documents for use by board and staff, and reports that meet best accounting practices.