How Does Governmental Accounting Differ From Nonprofit Accounting?
Fund accounting is a system of accounting used by non-profits to track the amount of cash assigned to different purposes and the usage of that cash.
Governmental accounting and nonprofit accounting are similar because they use a fund accounting model rather than a traditional business one. This model means government and nonprofit organizations rely on revenue from multiple sources and often confront restrictions on how they allocate these funds.
Within government organizations, accounting becomes even more complicated. Government entities manage a wide array of organizations within a community, which makes budgeting more involved. Funds have to be distributed to give all the community components the support they need.
Bureaucracy has a greater hold on government organizations, which puts more restrictions on fund usage and requires more compliance, like the regulations identified by GASB. Even the vocabulary involved in government accounting is more complicated than that of the nonprofit sector.
Government budgets are subject to change regularly with partisan influence, which means your funding may be inconsistent. The financial demands of government fund accounting require close attention to detail and a reliable organizational process.
What Is GASB Compliance?
The Governmental Accounting Standards Board (GASB) is a private sector organization that determines state and local requirements for government accounting. This organization’s primary goal is to ensure financial transparency for investors, taxpayers and public officials. Government funds come from the community and those who represent it, and this money needs to be used in agreeable ways.
GASB compliance involves an in-depth list of regulations all government organizations must adhere to. These regulations include concepts like the following:
- Responses to debt
- Retirement obligations
- Required benefits for employees
- Tax concerns
- Asset and liability reporting
- Fund type limitations
- Fund reporting
Within communities, GASB compliance ensures constituents are satisfied with the way their money is spent. When the public is pleased with fund allocation, they continue to fund these government programs, which then goes back into community improvement. GASB regulations represent the best way to keep government organizations effective.
When it comes to governmental accounting, it’s vital to comply with GASB policies. This practice ensures your organization satisfies the community’s wants and needs, and it can help you receive more funding in the long term. With the right tools, following GASB compliance rules can be simple. At MIP, we’re here to support your governmental accounting processes.
How MIP Makes Compliance Easy
At MIP, we offer GASB-compliant accounting software to streamline your financial management. As a true fund accounting system, our program provides reports that meet all current GASB standards. Input your fund information as you go, and our system compiles it for you. Our software offers financial transparency for stakeholders along with simplified compliance, and it provides accessible audit trails.
GASB fund accounting software changes the way you handle your government finances. With our single, user-friendly solution, you can customize your modules and allocate your funds according to regulations.
Work With MIP for GASB Fund Accounting Software
MIP is here to support your financial needs as a government organization. Stay compliant and manage funds with ease with our accounting software. Get started today by requesting a demo, and feel free to reach out if you have any questions.