Introducing Terrell Turner

In our latest episode, we dive deep into the realm of nonprofit financial management with our special guest, Terrell Turner. As a CPA and the visionary behind TLTurner Group, Terrell joins May L. Harris, Esq., to shed light on the intricacies of nonprofit financial health and reporting. Through this enlightening chat, Terrell offers insights into how he aids nonprofits in achieving financial clarity and equips them with the tools for adept accounting, bookkeeping, and tax reporting.

Key Steps to Financial Fitness for Nonprofits

Being with TLTurner Group, Terrell is dedicated to simplifying accounting and finance for nonprofits. In this episode, Terrell underscores two primary facets of financial wellness for nonprofits:

1. Establishing robust financial protocols: Initiate strong policies that track all monetary transactions, ensuring transparency in inflow and outflow of assets.
2. Data-driven financial decisions: By tracking financial data, nonprofits are in a better position to make judicious spending decisions, fortifying the organizations core purpose. Such an approach not only bolsters trust with stakeholders, but also ensures legal compliance and accurate impact assessments.

Tackling Financial Queries from Nonprofits

Terrell shares common questions his clients ask regarding finances and offers insight into their respective answers.

Keeping Track of Finances

The first common question Terrell receives is about the need to keep track of finances. The importance of nonprofits maintaining a financial record cannot be understated. An accurate financial record can inform users of how their money is spent and allows nonprofits to allocate funds to best fulfill the mission and purpose of the organization. This well-rounded financial record will also assist nonprofits file their required annual filings.

The Role of the Form 990

Even with 501(c)3 tax-exempt status, informational tax returns (form 990), are required. Terrell discusses with May that nonprofits do not want to miss filing informational tax returns as it could impact their status as a tax-exempt organization. This, in turn, influences a nonprofits ability to accomplish their mission. You do not want to lose your status or even the entire organization because you missed out on the filing form 990.

Safeguarding Organizational Finances

May shares that embezzlement in nonprofit organizations is unfortunately more prevalent compared to for-profit businesses since they usually deal with volunteers. This makes it easier for individuals to take advantage of the lack of proper financial controls. Therefore, Terrell emphasizes the need for stringent financial controls, especially when it comes to expense approvals.

As Terrell said, “If you're a nonprofit, you have to have almost more accountability than a for-profit company, so you really need to make sure we focus on accountability.” To achieve this, he suggests setting up primary controls like an accounting system and bookkeeping process to provide accountability to avoid this situation. Having these clear policies in place can reduce the risk of anything unsavory occurring within your organization.

Deciphering Key Financial Statements

Terrell stresses the significance of accurate income statements, balance sheets, and cash flow statements. These are windows through which donors and regulators gauge an organization’s financial health, as well as if they are making true efforts toward their purpose. Keeping these documents accurate serves to denote your organization's authenticity.

Effective Nonprofit Bookkeeping Systems

It's important to have an effective bookkeeping system to maintain financial record accuracy, which involves daily transactions including received funds, expenses, and salaries. Nonprofits can use any type of accounting software, including Quickbooks. However, bookkeeping is not just about having good software but also about tailoring it to the organization's needs, especially since nonprofit finances will be tracked differently than for-profit organizations.

May and Terrell emphasized the importance of customization when implementing accounting software for nonprofits. The design of the chart of accounts must align with the organization's mission and goals. It should be designed to provide clarity on its revenue sources and expenses, which offers a transparent view of the organization's financial journey and impact on its community. This level of detail ensures that every dollar is accounted for and allocated to its intended destination, which guides the nonprofit toward its goals.

Conclusion

Financial prudence is the bedrock of a thriving nonprofit. Terrell’s expertise encompass diligent financial tracking, timely tax return filing, stringent spending controls, precise financial statement compilation, and a bespoke bookkeeping system that fosters both transparency and accountability.

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