How is accounting managed in an NGO?
Posted: Mon Jan 06, 2025 5:18 am
There are those who think that an NGO, as a Non-Governmental Organisation, is an organisation that operates outside of any type of taxation… But nothing could be further from the truth. Are you thinking of starting an NGO? Well, in that case, you should know that you will have to dedicate time and resources to the invoicing and accounting of your company.
But don't let it be an uphill battle. After all, an NGO is an organisation like any other. And, beyond the particularities of its business objectives, it has to operate based on rules and processes for invoicing and accounting. How to do it? Keep reading and find out.
Centralize your finances and monitor their progress!
Use the best tools to simplify your processes with the help of Holded.
Start now
What should an NGO's accounting take into account?
As stated above, an NGO must be up canada number data to date and, therefore, its accounting must be in accordance with the General Accounting Plan (specifically, the PGC specific to ENL). Therefore, and always depending on the tax situation of the NGO in particular, it must present both the quarterly VAT and IRPF declarations and the relevant annual Corporate Tax, all of them depending on the type of activity carried out.
What does this mean? The same as for any other company. To give a very common example, if your NGO has contracted professionals (direct or independent) and these professionals generate invoices with withholding, it will be necessary to be registered with the Treasury as withholding agents and carry out quarterly settlements. Another common example: if the premises in which the NGO carries out its activity are rented and withholding is applied, this must also be settled every quarter.
And, although it is not obligatory, it is advisable that, at the end of each financial year, your NGO legalises its official books (i.e. the daily book, the inventory book and the annual accounts) in the relevant Commercial Registry. For all these reasons, the accounting of every NGO is obliged to record all its financial transactions and reflect them appropriately... Which, undoubtedly, leads to another question: once you know what you have to do, how can and should you manage it?
How to manage your NGO's accounting?
If, for practical purposes, an NGO operates like any other type of company, why should you manage your billing and accounting in a different way? As always, the possibilities are endless, but it is best to centralize as many processes as possible in a single tool.
For this last point, there are business management services (such as Holded , for example). With a service of these characteristics, it is possible to keep billing up to date, avoiding any kind of surprise and keeping an exhaustive record of everything that comes in and out of the NGO. Simplified billing will make it easier to manage both recurring (which can be automated) and one-off invoices. And, as far as possible, it always helps to opt for online management in direct contact with your bank.
The same goes for accounting: why scatter all the processes when it's better to have them all together? Use an accounting management service that allows you to easily keep all your official books, including the necessary invoices. Always have a list of your assets and depreciation at hand and, above all, a very clear overview of your financial statements: an account that clearly reflects your profits and losses, a balance sheet (comparing assets and liabilities), a book of sums and balances...
Do you have everything listed here under control? Then you can rest easy: you are managing your NGO's accounting perfectly. But if there is something in all of this that doesn't sound familiar to you, hurry up and find out more before it becomes a problem.
But don't let it be an uphill battle. After all, an NGO is an organisation like any other. And, beyond the particularities of its business objectives, it has to operate based on rules and processes for invoicing and accounting. How to do it? Keep reading and find out.
Centralize your finances and monitor their progress!
Use the best tools to simplify your processes with the help of Holded.
Start now
What should an NGO's accounting take into account?
As stated above, an NGO must be up canada number data to date and, therefore, its accounting must be in accordance with the General Accounting Plan (specifically, the PGC specific to ENL). Therefore, and always depending on the tax situation of the NGO in particular, it must present both the quarterly VAT and IRPF declarations and the relevant annual Corporate Tax, all of them depending on the type of activity carried out.
What does this mean? The same as for any other company. To give a very common example, if your NGO has contracted professionals (direct or independent) and these professionals generate invoices with withholding, it will be necessary to be registered with the Treasury as withholding agents and carry out quarterly settlements. Another common example: if the premises in which the NGO carries out its activity are rented and withholding is applied, this must also be settled every quarter.
And, although it is not obligatory, it is advisable that, at the end of each financial year, your NGO legalises its official books (i.e. the daily book, the inventory book and the annual accounts) in the relevant Commercial Registry. For all these reasons, the accounting of every NGO is obliged to record all its financial transactions and reflect them appropriately... Which, undoubtedly, leads to another question: once you know what you have to do, how can and should you manage it?
How to manage your NGO's accounting?
If, for practical purposes, an NGO operates like any other type of company, why should you manage your billing and accounting in a different way? As always, the possibilities are endless, but it is best to centralize as many processes as possible in a single tool.
For this last point, there are business management services (such as Holded , for example). With a service of these characteristics, it is possible to keep billing up to date, avoiding any kind of surprise and keeping an exhaustive record of everything that comes in and out of the NGO. Simplified billing will make it easier to manage both recurring (which can be automated) and one-off invoices. And, as far as possible, it always helps to opt for online management in direct contact with your bank.
The same goes for accounting: why scatter all the processes when it's better to have them all together? Use an accounting management service that allows you to easily keep all your official books, including the necessary invoices. Always have a list of your assets and depreciation at hand and, above all, a very clear overview of your financial statements: an account that clearly reflects your profits and losses, a balance sheet (comparing assets and liabilities), a book of sums and balances...
Do you have everything listed here under control? Then you can rest easy: you are managing your NGO's accounting perfectly. But if there is something in all of this that doesn't sound familiar to you, hurry up and find out more before it becomes a problem.