As the new year begins, it’s a good time for non-profit organisations (NPOs) to focus on two important tasks: preparing for the upcoming audit season and creating a budget that aligns with your goals for the year ahead. By taking the right steps, your NPO can stay compliant, improve financial management, and allocate resources effectively.
Here’s how to get started.
Getting Audit-Ready
Audit season can be stressful, but with the right preparation, it doesn’t have to be. Here are some practical steps to help your NPO prepare:
- Review Financial Statements and Documentation
Start by checking that your financial records are up-to-date and accurate. This includes reviewing income, expenses, donations, and grants. Missing or incomplete records can lead to delays or issues during the audit. - Ensure Section 18A Compliance
Section 18A of the Income Tax Act allows donors to claim tax deductions. Make sure your donor reporting is accurate and follows the guidelines for tax exemptions. This helps maintain transparency and trust with your supporters. - Get Expert Help If Needed
If you’re unsure about any part of the audit process or compliance requirements, it’s a good idea to seek professional assistance. Turning Point offers audit readiness services that can help you navigate these tasks.
Setting Up a Practical Budget for 2025
The beginning of the year is the ideal time to create a budget that supports your NPO’s goals for the year ahead and ensures that your resources are allocated efficiently.
- Evaluate Year-End Financials
Look back at your financial performance from the previous year. Did you meet your revenue goals? If not, consider where you can cut costs or look for additional funding. - Align Your Budget with Your Mission
Your budget should reflect your NPO’s goals. Make sure that funds are allocated to the areas that support your mission and priorities. If certain programmes perform well, consider increasing their budget to expand them. - Prepare for Unexpected Expenses
It’s always good to have a contingency plan. Set aside some funds for unexpected costs that may arise during the year. This ensures your NPO can handle unforeseen challenges without disrupting operations.
Preparing for the Year Ahead
By focusing on audit readiness and budgeting for the year ahead, your NPO can stay on track and make the most of available resources. Turning Point can help you navigate these processes, from ensuring successful audits to creating a budget that supports your goals.
Watch our video, Audit Readiness and Financial Planning for NPOs: Key Strategies for 2025:
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