Setting Up Your First Fiscal Year

Your fiscal year is the 12-month period your organization uses for financial reporting. It might match the calendar year (January through December), or it might start in a different month -- many nonprofits use July through June. Getting this right at the start is important because your reports, period closing, and 990 filing all depend on it.

• Know your fiscal year start month. Check your bylaws, articles of incorporation, or IRS determination letter. If you're not sure, your accountant can tell you. Most nonprofits use one of these:
• January -- December (calendar year, most common)
• July -- June (common for organizations that follow the school year or receive government grants)
• October -- September (common for organizations aligned with the federal fiscal year)
• If you're switching from another system, gather your account balances as of the start date so you can enter opening balances

Step 1: Set your fiscal year start month

1. Go to Organization > Settings (or during onboarding, this is part of the initial setup).
2. Find the Fiscal Year section.
3. Select your start month from the dropdown (January through December).
4. Click Save.

NP Ledger automatically creates your first fiscal year based on the start month you selected.

Step 2: Verify the fiscal year

1. Check your dashboard -- the date range at the top should show your current fiscal year (e.g., "Jul 2026 -- Jun 2027").
2. Go to Managing Your Books > Periods to see the fiscal year listed with its start and end dates.

Step 3: Enter opening balances (if switching from another system)

If you're migrating from QuickBooks, a spreadsheet, or another system, you need to bring over your account balances so NP Ledger starts with accurate numbers.

1. Gather your trial balance or balance sheet from your previous system as of the day before your NP Ledger start date.
2. Enter the balance for each account:
3. Bank account balances (checking, savings)
4. Outstanding payables or receivables
5. Fund balances (net assets by restriction type)
6. You can enter these through Quick Entry as "opening balance" transactions or use Spreadsheet Import for a batch entry.

Tip: If you're starting fresh (no history to bring over), skip opening balances. Your first transactions will establish your account balances naturally.

• The fiscal year dates on your dashboard match your actual fiscal year
• Reports default to the correct date range
• If you entered opening balances, run a Trial Balance report to verify debits equal credits

• Choosing calendar year when your bylaws say July-June. Your 990 filing must match the fiscal year in your governing documents. If you filed previous 990s on a July-June basis, don't switch to calendar year without consulting your accountant.
• Not entering opening balances. If you're switching from another system and skip this step, your first year's reports will only show transactions entered in NP Ledger -- past balances won't appear. Your Statement of Financial Position will be incomplete.
• Trying to change the fiscal year start month after posting transactions. If you need to change it, contact support. Changing mid-year can create accounting complications.
• Confusing fiscal year with calendar year. Your fiscal year may not start in January. "FY 2027" for a July-June organization means July 2026 through June 2027.

• Reports filter by fiscal year -- the right start month means your annual reports cover the right 12 months
• Period closing locks a complete fiscal year
• 990 filing uses fiscal year data -- the 990 Wizard asks you to select the fiscal year you're filing for
• Grant reporting often aligns with your fiscal year -- funders expect financial reports that match your annual reporting period

Accountant Note: The fiscal year election is made on the organization's first Form 990 filing. Once established, changing the fiscal year requires IRS approval (Form 1128) or, for organizations that have not yet filed, a timely election with the first return. NP Ledger supports any 12-month fiscal year period.