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Establishing a Nonprofit Organization

Open a bank account and establish check signing procedures

It is important to establish a prudent system of checks and balances when dealing with the finances of an organization. It is advisable to allocate finance work among several people so that no one person is in charge of handling all of the transactions related to money. For example, when dealing with the receipt of cash, there should be one staff member who receives and tallies the funds, but a different staff member who then is responsible for taking the money to the bank and making the deposit. You should arrange for bank statements to be sent directly to the executive director, in order to ensure that each transaction can be accounted for. In turn, the bank statements then can be forwarded to the staff member responsible for reconciling the account(s).

By proceeding in such a prudent fashion, the potential for misappropriation of funds is minimized. Such sound fiscal procedures will please auditors, as well as future donors.

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