All nonprofits have to track expenses by “function” for external reporting. As an internal accountant for your nonprofit, you might wonder: What does it mean to track expenses by function? Why should we do it? What line items should we track? How can we know what portion of each expense relates to each function? What about indirect costs? How should we document cost allocations? How can functional expenses information help us make management decisions?
This session will answer these questions and more. Learn tips on tracking expenses by function, some nuances of preparing the Statement of Functional Expenses, what auditors are looking for, and how you can use functional expense reports as a management tool. We’ll address principles of cost allocation as well as practical applications.
We’ll also address the unique treatment of certain types of expenses, like special events, volunteer management, and more.
This session will help you understand the concepts of cost allocation and expense reporting, as well as provide practical guidance for operationalizing the concepts.