How to Tackle CACFP Accounting: A Simple Guide for Daycares

Welcome to the world of CACFP accounting—a vital piece of the puzzle for any program involved in the Child and Adult Care Food Program (CACFP). It’s not just about balancing the books; it’s about creating a specialized financial approach to ensure your program runs smoothly and stays compliant with CACFP guidelines. 

Fortunately, navigating CACFP accounting doesn’t have to be a daunting task. While it is crucial for ensuring compliance with the Child and Adult Care Food Program (CACFP), it doesn’t need to be complex or overwhelming. This guide will walk you through the essential steps to simplify your CACFP accounting process– making it easier to stay organized, meet guidelines, and prepare for audits or reviews.

Here’s What’s Involved in CACFP Accounting

Documenting Expenses

• Proper documentation is your financial safety net– Save every receipt or invoice related to your expenses. 
• This helps prove that your costs are allowable and meet CACFP guidelines, so you’re always ready for an audit or review.
• For tips on managing your CACFP receipts, check out this article: https://cacfpsolutions.com/cacfp-receipt-tips/ 

Tracking Allowable Expenses

• Use CACFP funds exclusively for allowable costs (e.g., food, kitchen supplies, related labor).
• Ensure costs are necessary, reasonable, and directly related to the program’s food service.
• Avoid unallowable expenses like personal travel or non-program purchases. You can view a full list of allowable expenses here.

Managing Your Budget

• Regularly check that your spending aligns with your approved budget. 
• Make amendments to the CACFP budget as necessary. 
• This helps keep all costs in check and ensures you’re not veering off.

Ensuring Accurate Monthly Reporting

• Stay on top of your CACFP revenue and expenses with accurate monthly reporting. 
• Perform monthly reconciliations to ensure reimbursements are used for allowable costs.
• Maintain up-to-date financial reports to avoid discrepancies.

Staying Prepared for Program Reviews

• Keep financial records organized and accessible for periodic program reviews.
• Conduct internal audits regularly to spot and correct errors before formal reviews.

How Can You Simplify Your CACFP Accounting? 

Utilize Dedicated Accounting Software

Specialized accounting software, such as QuickBooks, can be customized to automate your CACFP tasks, from tracking expenses to generating detailed financial reports. By leveraging digital tools, you streamline the accounting process and enhance your program’s compliance.

In CACFP accounting, having the right documents readily available is crucial. In the event of a CACFP review, these are what you’ll use to prove compliance with CACFP guidelines. Automated accounting software, like Quickbooks, is vital in helping to create these documents.

Maintain Key CACFP Accounting Documents 

Here’s a guide to the key documents you need to keep handy:

1. Chart of Accounts: A chart of accounts is an organized list that a business uses to keep track of where its money is going. It sorts everything into simple categories like assets, bills it has to pay, income, and expenses. To learn more about the Chart of Accounts, click here. 
2. Income Statements: An income statement is a simple report that shows how much money a business earned and spent over a certain period, like a month or a year. It helps you see if the business made a profit (earned more than it spent) or had a loss (spent more than it earned).  For more info regarding income statements, see here. 
3. Balance Sheets: A balance sheet is a snapshot of a business’s finances at a specific moment. It shows what the business owns (its assets), what it owes (its debts or liabilities), and what’s left over for the owners (equity). It helps you understand the overall financial position of the business—basically, what it has versus what it owes. To learn more about balance sheets, click here. 
4. General Ledgers: A general ledger is the main record book for a business’s finances. It keeps track of all the money coming in and going out, organizing it into different categories, like sales, expenses, and payments. Click here to learn more about general ledgers. 
5. Payroll records: For staff with labor costs assigned to CACFP, it’s essential to maintain complete payroll records. These records should include detailed information about hours worked, wages paid, and any benefits provided for CACFP-related duties. QuickBooks simplifies this by tracking employee hours and generating payroll reports. For more information about payroll reports in Quickbooks, click here. 

Are you feeling overwhelmed by CACFP Accounting? 

• Are you struggling to keep up with CACFP accounting requirements?
• Do you find it challenging to track allowable expenses and reconcile your budget?
• Is preparing for program reviews or audits stressing you out?
• Are you unsure if your current accounting practices are fully compliant with CACFP guidelines?
• Would you like to streamline your financial processes but don’t know where to start?
• Would you like guidance on how to get started with Quickbooks & CACFP Accounting? 

Utilize a CACFP Consulting Team

If you answered “yes” to any of these questions, our consulting services at CACFP Solutions can help.  We can provide valuable insights and recommendations to help you enhance your program.

How Can We Help?

• Customized Guidance: We provide tailored advice on managing your CACFP accounting practices, ensuring you understand and apply CACFP guidelines correctly.
• Streamlined Processes: Our team can help you implement efficient systems and processes, reducing manual tasks and minimizing errors.
• Software Integration: We offer support in setting up and optimizing accounting software like QuickBooks for CACFP purposes, ensuring you leverage its full potential to automate tasks and generate accurate reports.
• Review Preparation: We assist in organizing and preparing your documents for audits and reviews, making sure everything is in order and compliant.
• Ongoing Support: From troubleshooting issues to providing updates on new regulations, our consultants are here to support you every step of the way.

Stay tuned for our next blog post, “Is It Time to Reconsider Your Accounting Service?” where we’ll explore how to select the best accounting service for your needs.

This blog post was crafted in collaboration with cutting-edge AI!