Nonprofit accounting and Form 990 preparation for Colorado organizations

Nonprofits are accountable to donors, grantors, boards and regulators, and each expects clear, reliable figures. SBA CPA maintains your books so that restricted and unrestricted funds are tracked separately, prepares the appropriate Form 990 on time, keeps your Colorado charitable solicitation registration current and gives your board reports that support sound oversight.

What’s included

Monthly bookkeeping with tracking by fund and donor restriction

Form 990, 990-EZ or 990-N preparation and filing

Colorado charitable solicitation registration and annual renewals

Board-ready financial statements and budget-to-actual reports

Grant tracking and single audit readiness

Applications for tax exemption and unrelated business income filings

An overhead view of people seated around a large wooden table with notebooks, sticky notes, printed charts and a laptop showing graphs

What makes nonprofit accounting different?

A business measures success in profit. A nonprofit measures it by its mission, and it must demonstrate to donors, grantors, its board and regulators that every dollar was used as intended. That obligation shapes how the books are kept, which reports matter and which filings are due.

The most significant difference is donor restrictions. A gift made for a scholarship fund, a building campaign or next year’s program cannot be treated as general operating money. Nonprofit financial statements report net assets with donor restrictions separately from net assets without donor restrictions, so the books must track each restricted gift until its restriction has been met. Fund accounting is the discipline that makes this possible.

Which Form 990 does your organization file?

Most tax-exempt organizations file an annual return from the Form 990 series, and the correct form depends on the organization’s size. Under the IRS filing thresholds:

Form 990-N (e-Postcard): gross receipts normally $50,000 or less
Form 990-EZ: gross receipts under $200,000 and total assets under $500,000
Form 990: gross receipts of $200,000 or more, or total assets of $500,000 or more
Form 990-PF: all private foundations, regardless of size

The return is due on the 15th day of the fifth month after your fiscal year ends, which is May 15 for a calendar-year organization, and Form 8868 provides an automatic six-month extension. Missed deadlines carry real consequences: organizations that do not file for three consecutive years automatically lose their tax-exempt status.

A scenario: outgrowing the short form

For example, a community arts organization in Boulder County reports $180,000 in gross receipts and holds $120,000 in assets, so it files Form 990-EZ. The following year, a new foundation grant raises gross receipts to $240,000. Because the organization has now crossed the $200,000 threshold, it must file the full Form 990, which requires more detailed disclosure of governance, compensation and program expenses. Recognizing this at midyear gives the treasurer time to establish the program and functional expense tracking that the longer form requires. The figures here are illustrative.

Form 990 is also a public document. Donors, grantmakers and journalists read it, so we prepare it as a clear account of your organization’s work rather than a mere compliance exercise.

Do you need to register to solicit donations in Colorado?

Charitable organizations that plan to solicit contributions in Colorado must generally register with the Colorado Secretary of State under the Colorado Charitable Solicitations Act, with only a few exceptions. The organization must first be registered as a business entity, and an out-of-state charity files a Statement of Foreign Entity Authority. Registration is renewed every year, and the renewal is due by the 15th day of the fifth month after the fiscal year ends, the same timing as the Form 990, with an automatic three-month extension. We manage both calendars together so that neither deadline is missed.

What reports does your board need?

Board members are volunteers with limited time. They need a concise set of reports that answers three questions: Is the organization financially sound? Is it spending in line with the budget? Are restricted funds being used as promised? We prepare monthly or quarterly financial statements, budget-to-actual reports and a short summary of restricted funds, and we can walk the finance committee through them.

How do grants and federal funding affect your obligations?

Many nonprofits rely on grants, and federal funds carry their own rules. An organization that expends $1,000,000 or more in federal awards in a fiscal year must have a single audit under 2 CFR 200.501. Our government grant accounting team helps you track awards and allowable costs, and our assurance team can discuss reviewed or audited financial statements when a funder or lender requests them.

An annual compliance checklist

Close the books at year-end and reconcile restricted funds.
File the appropriate Form 990, or an extension, by the 15th day of the fifth month.
Renew your Colorado charitable solicitation registration on the same timeline.
Review any unrelated business income, which may require Form 990-T.
Have the board approve next year’s budget before the year begins.

We also help newly formed organizations apply for tax-exempt status and establish sound books from the outset. To discuss what your organization needs, the first step is an introductory call with our client services team.

Common questions

Which Form 990 does our nonprofit file?

Organizations whose gross receipts are normally $50,000 or less can generally file the Form 990-N e-Postcard. Those with gross receipts under $200,000 and total assets under $500,000 may file Form 990-EZ. Larger organizations file the full Form 990, and private foundations file Form 990-PF regardless of size.

When is Form 990 due?

Form 990 is due by the 15th day of the fifth month after your fiscal year ends, which is May 15 for a calendar-year organization. Form 8868 provides an automatic six-month extension.

What happens if we miss our 990 filings?

An organization that does not file for three consecutive years automatically loses its tax-exempt status. Reinstatement requires a new application, so remaining current is far simpler than restoring exempt status afterward.

Do we need to register with the Colorado Secretary of State?

Most charitable organizations that solicit contributions in Colorado must register under the Colorado Charitable Solicitations Act, with a few exceptions such as churches. Registration is renewed annually, generally on the same schedule as your Form 990.

What is fund accounting?

Fund accounting is a method of bookkeeping in which money given for a specific purpose or period is tracked separately from general funds. It allows you to demonstrate to donors and grantors that their gifts were used as intended.

How do we get started?

Schedule an introductory call or request a proposal. Our client services team will learn about your programs, funding sources and board reporting needs, then define the scope of the engagement.