Not-for-Profit Organizations (NPOs) play a vital role in Canada, enhancing communities and providing support to several areas of activities. These organizations are vastly different from traditional businesses, especially in respect to their accounting and taxation needs. For that reason, having an accountant that thoroughly understands the requirements for NPOs and Registered Charities is key to ensure financial stability and compliance in the sector.
Taxation Filing Needs of NPOs
Even though most NPOs are tax-exempted, they are still required to file an income tax return with the Canada Revenue Agency each year. In addition to that, organizations that meet certain financial thresholds must file the T1044 Form – Non-Profit Organization Information Return. Failure to comply with these requirements will result in severe penalties from the CRA.
Accounting and Auditing Needs of NPOs
NPOs need to prepare financial statements, which should be in accordance with the professional accounting standards. Depending on the needs of the NPOs, accountants can prepare these statements on a monthly, quarterly, semi-annual or annual basis. Auditing needs of NPOs are equally important. As an NPO, you will need to be prepared for auditing procedures and at the same time, ensure that review and notice to reader engagements are appropriately prepared.
Sound advice on options such as International Financial Reporting Standards (IFRS), special procedures for funders and Accounting Standards for NPOs can help you stay protected and ensure sustainability. Timely advice on these matters as well as regular tracking of your revenues and expenses can make a difference to your organization.
Advisory Needs of NPOs
NPOs require reliable advisory services in order to evaluate internal controls; special reports; due diligence; corporate governance review; reinstatement of registered charity status; and review of agreements. You might also require professional help to establish the mandate or structure of various committees such as Finance/Audit committees. Other factors such as formulation of financial policies also deserve special attention. Through professional advice, you can be assured that your best interests are safeguarded.
We can help you.
At SME, we offer end-to-end solutions for Not-for-Profit organizations operating in Canada. From setting up an NPO, to complying with tax requirements and anything in between, SME can help you manage your organization and improve its operational goals. For more information please contact your ASSOCIUM GAIN team.