What is a virtual CPA?

A virtual CPA provides the same services as a traditional CPA firm — tax preparation, bookkeeping, audits, financial planning — but delivers them remotely using secure cloud technology. You get expert-level service without visiting a physical office.

How much do virtual CPA services cost?

Pricing depends on the complexity of your financial situation and the services you need. We provide transparent fee estimates during your initial consultation. Virtual CPA firms typically have lower overhead than traditional firms, which translates to more competitive rates.

Do I need an audit for my nonprofit?

Many states require nonprofits to have an independent audit once they exceed certain revenue thresholds, often $500,000-$750,000. Grant-making organizations and government agencies frequently require audited financial statements. We can help determine your specific audit requirements.

What is the difference between an S-Corp and an LLC for tax purposes?

An LLC provides liability protection and pass-through taxation by default. An S-Corp election can provide additional tax savings by allowing owners to split income between salary (subject to payroll taxes) and distributions (not subject to payroll taxes). The right choice depends on your income level, business structure, and state tax laws.

What does a virtual CFO do?

A virtual CFO (fractional CFO) provides high-level financial strategy and oversight on a part-time basis — budgeting, forecasting, cash flow management, financial analysis, KPI reporting, and strategic financial planning. You get C-suite financial leadership without the full-time cost.

Can you help if I'm behind on bookkeeping or taxes?

Yes. We offer catch-up bookkeeping services to bring your books current and can help resolve back tax issues including IRS notices, unfiled returns, and payment plans.

What accounting software do you work with?

We work with QuickBooks Online, Xero, FreshBooks, Wave, and other major cloud accounting platforms. We can also help you select and set up the best software for your business.

How do I prepare for tax season?

Organize financial records throughout the year, keep receipts for business expenses, track mileage and home office usage, make quarterly estimated tax payments, and schedule a year-end tax planning session before December 31.

What is DCAA compliant accounting?

DCAA (Defense Contract Audit Agency) compliant accounting is a system that meets federal government requirements for contractors. It includes proper timekeeping, job cost accounting, indirect cost allocation, and specific internal controls required for government contract work.

Do I need a CPA or a bookkeeper?

Bookkeepers handle day-to-day recording of financial transactions. CPAs handle higher-level work — tax planning and preparation, audits, financial analysis, and strategic advice. Many businesses need both. Our firm provides both services so you have one team managing everything.

What's the difference between an audit, review, and compilation?

An audit provides the highest level of assurance through independent verification of financial statements. A review provides limited assurance through analytical procedures and inquiries. A compilation presents financial information in statement format without assurance. The right choice depends on your stakeholders' requirements.

Do you serve businesses outside the DMV area?

Yes. While our primary service area is Washington DC, Maryland, and Virginia, we serve clients nationwide through our 100% virtual model. Our cloud-based systems allow us to work with businesses anywhere in the United States.

How long does nonprofit audit preparation take?

For organizations with current, well-maintained books: 4–6 weeks. For organizations with reconciliation backlogs or disorganized grant files: 3–5 months. Starting at least 90 days before your expected fieldwork date is recommended for most organizations.

PBC stands for 'Prepared by Client.' It's the list of schedules, documents, and analyses that your auditor requests before and during fieldwork. Common items include trial balance, bank reconciliations, grant schedules, fixed asset schedule, board minutes, and loan agreements. Completing the PBC list promptly is the single biggest driver of audit efficiency.

What happens if we're not ready when auditors arrive?

If key documents are unavailable at the start of fieldwork, auditors will either delay fieldwork (and charge for rescheduling) or continue with available materials while issuing 'open items' that extend the engagement. Both outcomes increase cost.

Do we need to prepare financial statements before the audit?

Most auditors prepare the financial statements as part of the audit engagement — but you should provide a complete, reconciled trial balance, and schedules supporting all significant balance sheet and income statement accounts.

What is a representation letter and when do we sign it?

The management representation letter is a letter from your executive director and CFO/treasurer to the auditor confirming key representations — that financial statements are prepared in accordance with GAAP, that all transactions have been disclosed, that there are no undisclosed subsequent events, etc. It's signed at the conclusion of the audit.

How do we prepare for a Single Audit vs. a regular financial statement audit?

A Single Audit requires all of the above plus: a Schedule of Expenditures of Federal Awards (SEFA), time and effort documentation for grant-funded staff, procurement documentation (competitive bids), and compliance documentation for each major federal program. The SEFA is typically the biggest additional preparation item.

Should we hire a CFO or controller before our audit?

If your organization is preparing for its first audit and lacks internal financial expertise, engaging a part-time CFO or controller (or a virtual CFO service) 3–6 months before the audit significantly reduces preparation burden and audit costs.

How much time will the audit take during fieldwork?

For a typical nonprofit audit with a $1M–$5M budget: 40–80 hours of auditor time over 5–10 business days of fieldwork. Your finance team should expect to spend 2–5 hours per day during fieldwork responding to auditor questions and pulling documentation.

Nonprofit Audit Guide

Nonprofit Audit Preparation Checklist — DC, Maryland & Virginia

What documents does a nonprofit need to prepare for an audit?

A nonprofit audit requires: 12 months of reconciled bank statements, complete general ledger, all grant agreements and expenditure reports, board meeting minutes for the full year, trial balance, fixed asset schedule with depreciation detail, restricted and unrestricted net asset reconciliation, payroll records (W-2s, 941s), and prior-year audited financial statements. Most organizations need 60–90 days to compile these properly.

When Does Your Nonprofit Need an Audit?

When Does Your Organization Need an Audit or Review?

Feature	State	Review Required	Full Audit Required
Washington DC	N/A (no review tier)	$500K+ gross revenue	DLCP anniversary date
Maryland	$300K–$749,999 contributions	$750K+ contributions	6 months after FYE
Virginia	$750K–$999,999 contributions	$1M+ contributions	4.5 months after FYE
Federal (all states)		$1M+ federal awards (Single Audit)	9 months after FYE

The 10-Step Audit Preparation Checklist

Step 1: Bank Reconciliations (All Accounts)

Reconcile all bank, investment, and credit card accounts through the fiscal year-end date. Auditors will not proceed without current reconciliations. Include: operating accounts, reserve accounts, restricted grant accounts, payroll accounts.

Step 2: General Ledger & Chart of Accounts

Ensure your general ledger is complete for the full year. Review the chart of accounts for any miscategorized transactions. Auditors will request a full trial balance and general ledger.

Step 3: Grant Documentation

For each active grant: compile the grant agreement (with all amendments), budget, expenditure report, draw requests, correspondence with the funder, and any compliance reports. Organize by grant.

Step 4: Board Meeting Minutes

Compile board meeting minutes for all meetings during the fiscal year. Minutes should document: quorum, votes on key resolutions, approval of budget and financial statements, officer elections, and any related-party transactions.

Step 5: Fixed Asset Schedule

Prepare a schedule listing all fixed assets (equipment, furniture, leasehold improvements, vehicles) with: acquisition date, cost, accumulated depreciation, current book value, and funding source (grant-purchased assets require special treatment).

Step 6: Restricted Net Asset Schedule

Reconcile beginning balances, current-year additions (new grants, donor restrictions), current-year releases (expenses against restricted funds), and ending balances for each donor-restricted fund. This is a common area of audit complexity.

Step 7: Payroll Records

Prepare: payroll registers for the full year, W-2 forms for all employees, 941 quarterly returns, state unemployment tax filings, and time and effort documentation for grant-funded employees.

Step 8: Accounts Payable & Accrued Liabilities

List all outstanding vendor invoices and accrued expenses as of fiscal year-end. Auditors will test completeness of year-end liabilities by reviewing subsequent disbursements.

Step 9: Revenue Schedules

Prepare schedules of contribution revenue (with donor names and dates for gifts over $5,000), program service revenue by program, government grant revenue by grant, and investment income.

Step 10: Prior-Year Audit Report & Management Letter

Gather the prior-year audited financial statements and auditor's management letter. Prepare a status update on each prior-year finding or management letter comment showing what corrective action was taken.

Need help getting audit-ready?

We offer audit readiness assessments and virtual CFO support to help DC/MD/VA nonprofits prepare efficiently. Schedule a free consultation.

5 Common Audit Preparation Mistakes

Starting preparation the week auditors arrive

Auditors typically provide a PBC (Prepared by Client) list 30 days before fieldwork. Organizations that wait until fieldwork begins face delays, additional audit hours, and higher costs.

Bank reconciliations with 'timing differences' that are months old

Old uncleared items in bank reconciliations signal potential errors. Auditors will investigate any reconciling items over 90 days old.

Missing board minutes for key transactions

If the board approved a significant expenditure, contract, or related-party transaction without documented minutes, auditors will flag it.

Grant expenditures in the wrong cost center

Expenses charged to grants that don't match the grant budget categories or that exceed budget line items create findings. Review all grant expenditures before year-end.

Not reading the prior-year management letter

Auditors always start by reviewing prior-year findings and management letter comments. Coming to the audit without documented responses to prior-year items creates an immediate credibility gap.

Related Resources

Nonprofit Audit Services Audit Readiness Assessment Single Audit (2 CFR 200)Audit Requirement Checker

Frequently Asked Questions

Get Audit-Ready with Expert Support

Your Virtual CPA helps DC/MD/VA nonprofits prepare for audits efficiently — from reconciliations and grant documentation to board minute reviews and PBC list completion.