Bookkeeping for Nonprofit Organizations in Kenya — 2026 Guide
Maina Susan is a content researcher at Bubi-Alexander, who simplifies Virtual CFO services for multinationals and NGOs with her finance expertise.
LinkedIn >>Estimated read time: 3 minutes
Table of Contents:
- Introduction
- What Is Bookkeeping for Nonprofits in Kenya?
- Why Bookkeeping for Nonprofit Organizations in Kenya Is Important
- Basic Principles of Bookkeeping for Nonprofit Organizations in Kenya
- Step-by-Step Guide to Bookkeeping for Nonprofit Organizations in Kenya
- Important Note: Understanding the Double-Entry Rule
- Best Bookkeeping Software for Nonprofit Organizations in Kenya
- How Bubi Alexander Can Help with Bookkeeping for Nonprofits in Kenya
- FAQs on Bookkeeping for Nonprofit Organizations in Kenya
- Final Thoughts on Bookkeeping for Nonprofit Organizations in Kenya
Introduction
If you run a nonprofit in Kenya, keeping track of your finances is crucial.
Bookkeeping for nonprofit organizations in Kenya might sound complicated, but it doesn’t have to be.
This guide by Bubi Alexander will walk you through everything step by step – even if you’ve never handled an accounting ledger before.
Think of it as learning how to manage your nonprofit’s money so you can focus on your mission instead of worrying about numbers.
Let’s dive right in!!
Struggling to keep track of your nonprofit’s finances in Kenya?
Bubi Alexander can simplify bookkeeping for your NGO, so you can focus on your mission instead of worrying about numbers.
Request Your Free Payroll Consultation with Bubi Alexander TodayWhatsAppWhat Is Bookkeeping for Nonprofits in Kenya?
At its core, bookkeeping for nonprofit organizations in Kenya is simply recording and organizing all your financial transactions.
This includes:
- Money coming in – donations, grants, or fundraising income
- Money going out – paying salaries, buying supplies, or funding projects
Think of it like keeping a diary of every shilling your nonprofit earns and spends.
Skipping a day or mixing up numbers could make it hard to know how much you have for your next project.
Why is Bookkeeping for Nonprofit organizations in Kenya Important ?
Keeping accurate bookkeeping for nonprofit organizations in Kenya isn’t just about numbers – it’s about ensuring your nonprofit thrives, stays legal, and earns the trust of donors.
Here’s why it matters for you and your organization:
It helps you:
Stay compliant:
- Kenyan law requires accurate financial records to maintain your tax-exempt status. Without proper bookkeeping, you could risk penalties or losing your nonprofit status.
Track funds properly:
- When you receive donations or grants, your donors expect their money to be used for the intended purpose. Good bookkeeping ensures every shilling is accounted for.
Plan for growth:
- Knowing where your money goes helps you make informed decisions about expanding programs, hiring staff, or applying for new grants.
Build trust with donors:
- Transparent financial records signal professionalism and accountability, encouraging donors to continue supporting your mission.
Example:
- Imagine your NGO receives KES 100,000 from a donor specifically to build a school library.
- With proper bookkeeping for nonprofit organizations in Kenya, you can track exactly how that money is spent – on books, furniture, and construction – so nothing goes to unrelated expenses.
- You can even show a clear report to the donor.
Basic Principles of Bookkeeping for Nonprofit Organizations in Kenya
Getting started with bookkeeping for nonprofit organizations in Kenya is easier when you follow a few simple principles. These rules keep your finances organized, accurate, and donor-ready:
1. Record Everything
Every donation, grant, or expense matters.
- Think of it as keeping a financial diary. Even small contributions or in-kind donations count.
2. Use Fund Accounting
Separate restricted funds (for specific projects) from unrestricted funds (for general use).
- This helps you show donors exactly how their money is being used.
- Example: If someone donates KES 50,000 for a clean water project, keep that amount in a separate “Water Project Fund” account.
3. Stay Consistent
Record transactions regularly, ideally weekly, so nothing gets lost or forgotten.
- Consistency prevents confusion and reduces mistakes.
4. Reconcile Accounts Monthly
Compare your records against your bank statements to catch errors early.
- This step ensures your books match reality and gives confidence to donors and auditors.
Remember:
- Following these principles is the backbone of effective bookkeeping for nonprofit organizations in Kenya.
- Once you master them, managing donations, grants, and expenses becomes much easier—and your nonprofit will earn more trust from donors and stakeholders.
| Purposes of a payroll account in Kenya | |
|---|---|
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Protect salaries first
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– No more worrying that supplier invoices or office expenses will swallow up staff pay. – Payroll money is ring-fenced, waiting for payday. |
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Simplify compliance
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– PAYE, NSSF, SHIF… all those statutory deadlines suddenly stop feeling like landmines. – With a dedicated account, remittances become routine and audit-friendly. |
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Build employee trust
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– Few things motivate staff more than knowing payday is sacred.
– Consistent, on-time pay builds loyalty and lowers staff turnover. |
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Make auditing painless
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– Instead of digging through mixed-up statements, auditors (and donors, if you’re an NGO) get one clean record showing exactly how salaries and deductions were handled.
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Improve cash discipline
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– A payroll account forces you to plan ahead. – You’ll know exactly how much needs to be set aside each month, so there’s no last-minute scrambling for cash. |
Not sure how to record donations, grants, and expenses accurately?
We guide nonprofit leaders like you through bookkeeping step by step
Request Your Free Payroll Consultation with Bubi Alexander TodayWhatsAppStep-by-Step Guide to Bookkeeping for Nonprofit Organizations in Kenya
Managing your nonprofit’s finances doesn’t have to be complicated.
By following these clear steps, you can keep your records accurate, transparent, and donor-ready.
| Step | What You Should Do | Example |
|---|---|---|
|
1
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Set up your accounting system
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– Use spreadsheets or bookkeeping software like QuickBooks to track all income and expenses for your nonprofit organization. Example: Create a simple Excel sheet for donations, grants, and project costs |
|
2
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Record every transaction |
– Log every donation, grant, payment, or in-kind contribution. Example: If someone donates a classroom desk, enter it as a non-cash donation |
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3
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Categorize your expenses |
– Group spending into categories like “Operations,” “Projects,” or “Fundraising” Example: Rent and utilities under Operations, books and learning materials under Projects |
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4
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Reconcile bank statements |
– Compare your recorded transactions with your bank statements Example: Ensure a KES 50,000 donation matches your bank deposit |
|
5
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Prepare basic financial statements |
– Periodically, Create your Statement of Activities, Statement of Financial Position, and Statement of Cash Flows Example: Show that KES 100,000 donated for a library project went fully to books, furniture, and construction |
Following these steps makes bookkeeping for nonprofit organizations in Kenya simpler and keeps your finances under control.
Important Note: The Double-Entry Rule in Bookkeeping
When doing bookkeeping for nonprofit organizations in Kenya, one key rule to understand is the double-entry system.
This accounting rule ensures that every transaction affects at least two accounts, keeping your books balanced and accurate.
How It Works:
- Every donation, payment, or expense is recorded twice: once as a debit and once as a credit.
- This helps you avoid errors and makes your financial reports reliable for donors, auditors, and stakeholders.
Example:
- Your NGO receives KES 50,000 in donations for a school project.
- Debit: Cash/Bank account increases by KES 50,000
- Credit: Donations/Revenue account increases by KES 50,000
- Debit: Cash/Bank account increases by KES 50,000
This simple system ensures that your total debits always equal your total credits. Over time, it makes bookkeeping for nonprofit organizations in Kenya much more accurate and transparent.
Pro Tip:
- Even if you’re using software like QuickBooks or Xero, understanding the double-entry rule helps you verify that your records are correct and complete.
Best Bookkeeping Software for Nonprofit Organizations in Kenya
Choosing the right software can save you time, reduce errors, and make your nonprofit’s finances much easier to manage.
If you’re just starting out or running a small NGO, you can even begin with a simple Excel spreadsheet to track donations, expenses, and project costs.
Here’s a beginner-friendly guide to some of the most popular tools for bookkeeping for nonprofit organizations in Kenya:
| Software | Why It’s Useful | Best For |
|---|---|---|
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Small NGOs starting out
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NGOs with multiple staff or remote teams
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Very small nonprofits or community groups
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Large nonprofits with multiple projects
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NGOs with limited budget |
With software like this, you can automate record-keeping, generate reports for your board, and track donor contributions—saving time and reducing mistakes.
How Bubi Alexander Can Help with Bookkeeping for Nonprofits in Kenya
If managing your nonprofit’s finances feels overwhelming, you’re not alone.
That’s where Bubi Alexander comes in.
They offer virtual CFO and outsourced bookkeeping services specifically designed for nonprofit organizations in Kenya.
Here’s how they can help you and your nonprofit:
- Set up your books from scratch – Whether you’re just starting or switching from manual records, Bubi Alexander will organize your accounts so everything is clear and compliant.
- Train your team – Make sure everyone handling your finances knows how to record donations, track expenses, and generate accurate reports.
- Fully manage your finances – If you’d rather focus on your mission, they can take care of day-to-day bookkeeping, reporting, and donor accounting for you.
Pro Tip: You can request a quote and have it ready within 48 hours, so your nonprofit can start keeping accurate, compliant records immediately.
With Bubi Alexander’s support, you’ll spend less time worrying about numbers and more time making a real impact in your community.
FAQs on Bookkeeping for Nonprofit Organizations in Kenya
1. What type of accounting is used in bookkeeping for nonprofit organizations in Kenya?
- Nonprofits in Kenya typically use fund accounting, which helps you track restricted funds (for specific projects) separately from unrestricted funds (for general use).
- This makes it easier to report to donors and stay compliant with Kenyan regulations.
2. What are the essential financial statements for nonprofit bookkeeping in Kenya?
When managing bookkeeping for nonprofit organizations in Kenya, you should prepare these key statements:
- Statement of Activities – Shows where your donations and grants came from and how they were spent.
- Statement of Financial Position – Lists your nonprofit’s assets, liabilities, and net funds.
- Statement of Cash Flows – Tracks money coming in and going out.
- Notes to the Financial Statements – Provides additional details and explanations for transparency.
3. What is the 80/20 rule in nonprofit bookkeeping in Kenya?
- The 80/20 rule suggests that 80% of your nonprofit’s funds should go to programs and projects, while 20% can be used for administration and fundraising.
- Following this guideline helps maintain donor trust and accountability.
4. Do nonprofits in Kenya follow GAAP for bookkeeping?
- Yes! Many nonprofits in Kenya follow international accounting standards similar to GAAP to ensure transparency, compliance, and consistency in reporting.
5. Can nonprofits in Kenya use QuickBooks for bookkeeping?
- Absolutely! QuickBooks is widely used by nonprofits in Kenya because it makes bookkeeping simple, helps track donations and grants, and generates reports for boards or donors.
6. What is INPAS and how can it be used for nonprofit bookkeeping in Kenya?
INPAS (Integrated Nonprofit Accounting Standard) is a global framework tailored specifically for nonprofit organizations. It helps you:
- Track donations, grants, and project spending accurately
- Maintain separate records for restricted and unrestricted funds
- Generate detailed, donor-friendly reports
- Stay compliant with both Kenyan regulations and international best practices
INPAS is highly suitable for bookkeeping for nonprofit organizations in Kenya, giving your nonprofit credibility and transparency in financial reporting.
Would you like us to assist you with:
Bookkeeping services for your Non-profit ?
Click the WhatsApp button to book your free consultation with Bubi Alexander now
Or call us at 0737 570 370
WhatsAppFinal Thoughts on Bookkeeping for Nonprofit Organizations in Kenya
Bookkeeping for nonprofit organizations in Kenya doesn’t have to be intimidating.
By following simple steps, staying organized, and using software like QuickBooks, Xero, or Zoho, you can keep your finances in order, remain compliant, and focus on your mission.
For professional support, Bubi Alexander provides virtual CFO and outsourced bookkeeping services tailored specifically for nonprofits like yours in Kenya.
You can request a quote ready within 48 hours and start your nonprofit on the right financial footing.
With the right support, you’ll spend less time worrying about numbers and more time making a real impact in your community.
Talk to us today!!
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