Associations

Nonprofit fund accounting where membership dues and restricted gifts need proper tracking for 990 filings.

The Industry

Associations operate under 501(c)(3) or 501(c)(6) status with IRS reporting requirements most businesses never face. Form 990 filings are public documents that get scrutinized by members, donors, and regulators. Get the numbers wrong and you’re explaining discrepancies to your board or worse, risking tax-exempt status. Membership dues need tracking by member type - individual, corporate, lifetime. Event revenue gets separated from operating income. Restricted donations can only be spent on specific purposes and need accounting that shows you’re using funds correctly.

HOAs deal with assessment collection, reserve fund management, and vendor payments for shared property maintenance. Alumni associations track donations by graduation year and program, manage scholarship funds with restrictions, and run events that may or may not be profitable. Trade associations have membership tiers with different benefits and pricing, educational programs that need cost tracking, and lobbying activities with specific reporting requirements. Each type of association has unique accounting needs that don’t fit standard business bookkeeping.

Who This Covers

Trade associations, homeowners associations, alumni groups, professional organizations, membership-based nonprofits. Any association in Phoenix with tax-exempt status, membership dues, or restricted fund requirements.

What's Different

Form 990 annual filing requirements. Fund accounting separating restricted from unrestricted funds. Membership dues by tier or class. Donation tracking with restrictions on use. Reserve funds for HOAs. Event accounting showing profitability by program. Board reporting showing adherence to budget and proper use of restricted funds.

What We Handle

Fund accounting separates restricted donations from operating funds. When a donor gives $10,000 for scholarships, that money can’t pay for office rent. We track restricted funds properly and show the board you’re using donations as intended. Membership dues get recorded by category with renewal tracking. HOA assessments are tracked by unit with aging reports showing who’s current and who’s delinquent.

Form 990 preparation requires nonprofit-specific knowledge. We prepare the return with proper classification of revenue streams, functional expense allocation, and board reporting. QuickBooks gets set up with fund accounting structure, not standard business charts of accounts. Tax-exempt status maintenance means understanding unrelated business income rules and when activities might trigger UBIT reporting.

Fund Accounting and Compliance

Restricted versus unrestricted fund tracking. Membership dues by category. Donation tracking with gift restrictions. Form 990 preparation with proper revenue classification and functional expense allocation. UBIT identification for activities that might trigger tax on unrelated business income.

Operations and Board Reporting

QuickBooks setup using fund accounting structure. Budget versus actual reports for board meetings. HOA assessment tracking and collections. Event profitability by program. Reserve fund management for HOAs. Financial statements formatted for nonprofit governance showing compliance with donor restrictions.

What Goes Wrong

Restricted funds getting spent on wrong purposes because nobody’s tracking them separately. A donor gives $25,000 for a specific scholarship program. The money goes into the general account and gets used for operating expenses. When the donor asks about the scholarship, you can’t show the money was used correctly. Board members resign over it or worse, the donor reports it to the IRS.

HOAs without proper reserve fund accounting face special assessment crises. Nobody tracked what’s set aside for roof replacement or major repairs. When the roof fails, there’s no money to fix it and owners get hit with $5,000 special assessments. Form 990 gets filed with errors - revenue misclassified, functional expenses wrong, related party transactions not disclosed. The form is public and members see mistakes that undermine confidence in leadership.

Restricted Fund Violations

Donations with restrictions getting commingled with operating funds. Money spent on purposes other than donor intent. No way to prove to donors or board that restricted funds were used correctly. Risk to tax-exempt status if violations are significant or repeated.

Compliance and Reporting Failures

Form 990 filed with errors that are publicly visible. Reserve funds not tracked properly leading to special assessments. Membership dues not categorized correctly making renewal analysis impossible. Budget variance reports that don’t help the board make informed decisions.

What Changes

Restricted funds tracked separately with reporting that shows the board and donors you’re using money correctly. Membership dues organized by tier with renewal rates visible. HOA reserve funds managed with clear accounting for what’s set aside for specific purposes. Form 990 filed accurately with proper revenue classification and expense allocation.

Board meetings include financial reports formatted for nonprofit governance - budget versus actual, fund balance by restriction, program profitability. Your accounting supports good decision-making instead of just satisfying compliance requirements. Tax-exempt status maintained through proper accounting and awareness of UBIT issues before they become problems.

Donor and Member Confidence

Restricted funds accounted for properly with transparent reporting to donors and board. Membership tracking showing renewal rates and revenue trends. Clean 990 filings that stand up to public scrutiny. Financial statements that demonstrate good stewardship of member dues and donations.

Operational Clarity

Reserve funds managed properly preventing special assessment crises for HOAs. Event profitability tracked by program. Budget variance reporting that helps boards make informed decisions. Compliance handled without constant worry about IRS examinations or loss of tax-exempt status.

The Valley's Trusted Accounting Firm