Introduction to the Non Profit Chart of Accounts
The chart of accounts for a non profit organization differs from a normal business in that the balance sheet is referred to as the statement of financial position, the income statement is referred to as the statement of activities or statement of operations, and as the non profit organization is governed by trustees and does not have owners, the equity side of the accounting equation is replaced by the term net assets or funds.
A chart of accounts, sometimes abbreviated to COA, is a list of all the names of the accounts found in the general ledger with an account code (chart of accounts numbers) allocated to it.
The chart of accounts simply sets out the structure of your accounts system so that all similar accounts are grouped together. For example, statement of financial position fixed operating assets accounts might have codes from 1600, or revenue accounts might have codes from 4000.
A simple structure allows you to easily identify accounts and helps in the posting of transactions and the preparation of the trial balance and financial statements. It is usually best to use numbers for account codes as this will speed up the process of entering transactions as the numeric key pad can be used.
What Should a Non Profit Chart of Accounts look like?
The nonprofit chart of accounts should be split into statement of financial position and statement of activities sections, each of which is then subdivided into groups (e.g. cash, accounts receivable, revenue, expenses etc). Generally the most used accounts should be kept near the top of each group.
A sample non profit chart of accounts is shown in the interactive table below.
Non Profit Chart of Accounts Guide and Key
- Account Name: The name of the account in the general ledger
- FS: The Financial Statement in which the account appears
- SFP: Statement of Financial Position
- SA: Statement of Activities:
- Group: The type of account.
- Code: A suggested account code for the account
|Cash in bank||SFP||Cash||1010|
|Savings & short-term investments||SFP||Cash||1070|
|Accounts receivable control||SFP||Accounts receivable||1110|
|Doubtful accounts allowance||SFP||Accounts receivable||1115|
|Prepaid expenses||SFP||Other assets||1450|
|Accrued revenue||SFP||Other assets||1460|
|Leasehold improvements||SFP||Fixed operating assets||1630|
|Furniture, fixtures, and equipment||SFP||Fixed operating assets||1640|
|Accum amort – leasehold improv||SFP||Accum depreciation||1735|
|Accumulated deprec – ff & e||SFP||Accum depreciation||1745|
|Accrued expenses||SFP||Accrued liabilities||2150|
|Deferred revenue||SFP||Accrued liabilities||2310|
|Short-term liabilities – other||SFP||Short-term notes & loans||2570|
|Long-term liabilities – other||SFP||Long-term notes & loans||2770|
|Unrestricted net assets (funds)||SFP||Funds||3010|
|Temp. restricted net assets (funds)||SFP||Funds||3110|
|Perm. restricted net assets (funds)||SFP||Funds||3210|
|Contributions||SA||Direct contributions revenue||4010|
|Donations||SA||Donated goods & services revenue||4110|
|Non Government grants||SA||Non government grants revenue||4230|
|Fundraising||SA||Indirect contributions revenue||4430|
|Government grants||SA||Government grants revenue||4510|
|Program service fees||SA||Program-related sales & fees||5180|
|Membership dues||SA||Revenue from dues||5210|
|Interest-savings/short-term invest||SA||Revenue from investments||5310|
|Miscellaneous revenue||SA||Revenue from other sources||5490|
|Officers & directors salaries||SA||Salaries & related expenses||7210|
|Wages and salaries||SA||Salaries & related expenses||7220|
|Pension costs||SA||Salaries & related expenses||7230|
|Employee benefits – not pension||SA||Salaries & related expenses||7240|
|Payroll taxes, etc.||SA||Salaries & related expenses||7250|
|Accounting fees||SA||Contract service expenses||7520|
|Legal fees||SA||Contract service expenses||7530|
|Professional fees – other||SA||Contract service expenses||7540|
|Rent||SA||Facility & equipment expenses||8210|
|Occupancy costs||SA||Facility & equipment expenses||8215|
|Utilities||SA||Facility & equipment expenses||8220|
|Equipment rental & maintenance||SA||Facility & equipment expenses||8260|
|Depreciation||SA||Facility & equipment expenses||8270|
|Depreciation and amortization||SA||Facility & equipment expenses||8270|
|Travel||SA||Travel & meetings expenses||8310|
|Conferences, conventions, meetings||SA||Travel & meetings expenses||8320|
|Membership dues||SA||Other expenses||8530|
|Staff development||SA||Other expenses||8540|
|Outside computer services||SA||Other expenses||8560|
|Advertising expenses||SA||Other expenses||8570|
|Contingency provisions||SA||Other expenses||8580|
|Other expenses||SA||Other expenses||8590|
|Bad debt expense||SA||Business expenses||8610|
|Sales taxes||SA||Business expenses||8620|
|Taxes – other||SA||Business expenses||8650|
Notice how each account in the non profit chart of accounts is classified as statement of financial position or statement of activities and then further classified into a group such as for example other assets. The account names will depend on your type of business, but the classification and grouping should be similar to the table above.
When allocating account codes (chart of accounts numbers) don’t forget to leave space in the non profit chart of accounts for additional accounts and codes to be inserted in a group at a later stage. For example the revenue codes run from 4000 to 5999 so there is plenty of room to incorporate new categories of revenue if needed.
About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.