Long Story Short
Your P&L and balance sheet can both look fine while you’re quietly in compliance trouble — or flying strategically blind. Check out Andrea’s Net Asset Roll Forward Toolkit if you want the tool that shows you what’s actually going on.
For a long time, I thought I had a handle on our restricted revenue when I was at Think of Us. Not a perfect handle, but still a handle. I kept a spreadsheet. I reallocated when new grants came in. I’d email funders when I needed to shift categories. It worked fine when we had five funding sources. It was manageable with ten.
But as we grew, and especially as we started bringing in more complex grants, the spreadsheet started creaking. By the time we had 30+ sources coming in and were expanding the team, my rinky-dinky spreadsheet was not cutting it. And the deeper problem wasn’t even the spreadsheet itself but that the whole system lived in my head. I could feel my way through it. I knew where things were (mostly), but I could never successfully transfer that knowledge to anyone else.
I tried. Over and over. I’d walk people through it, explain the logic, even show them how I tracked things. They’d nod, and then they’d come back to me with every question and every decision point because the system only made sense to me. And if I got busy, or someone transitioned, or we reallocated something and I didn’t update the spreadsheet in time? We’d go months without proper tracking. And then we’d be backtracking under pressure.
We needed a system. A real one. A tool someone else could actually use, that didn’t require my constant presence to function AND that prevented $3M swings at the end of the year that sent us all scrambling to untangle.
By the time we had 30+ funding sources coming in… my rinky-dinky spreadsheet was not cutting it.
The person who transformed restricted revenue from a liability into a strategic tool
Andrea Chen started Propeller, a social sector incubator in New Orleans, with $30,000 in the bank and a federal grant (specifically, a disaster community development block grant.) She quickly learned the hard way what happens when your tracking system can’t keep up with your funding.
“I remember Sundays were my accounting days where I would have to justify every single expense and have all the receipts to back it up. It took a very long time to work through and I would still get it wrong. I would send it to them, they’d be like ‘This is off by two cents’ and then we have to redo it.”
She had a patient program officer who let her redo it three or four times before getting reimbursed. But as Propeller grew, doubling in size for five to eight years, the complexity hit a wall.
“In the beginning, if you have four or five grants you can kind of do it yourself, but once you get past 20, you can’t. You’re getting it wrong and then the grant report is coming up and you’re guessing what you spent money on. Are you double dipping? I don’t know. Probably. Who knows? Can’t tell.”
It took a couple of years to find the right accountant. Andrea finally found someone who’d been a nonprofit CFO at multiple organizations, who introduced her to a Net Asset Roll Forward. This tracker (lovingly referred to as The NARF) became her go-to spreadsheet because it made everything revenue-related clear — it showed what revenue she started with, what new revenue came in, what revenue went out, what revenue was left, and what restrictions were attached to every dollar.
Andrea is now helping others by sharing some of her most hard-earned resources and learnings. (Full Disclosure: Andrea is now consulting in partnership with Helia, and I get to see her brilliance up close as we work on projects together.) What makes Andrea’s approach to non-profit finance distinctive is that she doesn’t treat the Net Asset Roll Forward as a compliance obligation. She makes it her primary document— the one she looks at before anything else. More than the P&L, more than the balance sheet, more than the cash flow. It’s the document that tells her what’s actually happening.
When I heard that, something clicked for me. Helia now works with so many organizations that are managing their finances the way I used to — running that spreadsheet as long as it’ll hold, then scrambling when you realize that $3M you thought you had access to is actually restricted. Sometimes you can fix it, but I’d love a world where none of us ever have to feel that kind of stress in the first place. That’s what this tool is really about — not compliance, not audits. Just actually knowing what you have, when you have it, so you can lead from clarity instead of catching up in a panic.
The Key Takeaway
Here’s the thing about restricted revenue — your official financial documents can look totally fine while you’re actually in trouble.
Your P&L only shows the revenue you can recognize right now, so multi-year grants, future commitments, and reimbursable contracts are invisible. Your balance sheet shows total assets but not what restrictions are attached to them. Your cash flow shows what’s moving but not whether those movements are compliant with your grant agreements.
The Net Asset Roll Forward is the one document that does all of that, and every non-profit should be using it. It’s not glamorous (the acronym is literally NARF), but it’s the document that shows whether that healthy-looking bank balance is real or whether it’s sitting in three restricted buckets you can’t touch.
And here’s the shift that makes this more than a compliance tool. When you build it into a monthly process and actually use it to make decisions, it becomes a strategic dashboard. The one that tells you whether you can hire, whether you need to negotiate with a funder, or whether you’re in as healthy a position as your P&L suggests.
Andrea’s Net Asset Roll Forward System
If you’re a “just give me the template” kind of person (aka Helia’s COO Libby), Andrea’s Net Asset Roll Forward Template in our Toolkit has everything you need to stay ahead of your finances — a START HERE guide, a bookkeeper cheat sheet, a committed grants dashboard, a monthly close checklist, and a full working example. Set aside time with your accountant and work through it together.
If you’re a “tell me why this works” kind of person (aka our Founder Jess), read on. Here’s what we’re covering:
- Step 1 — Set up the foundation: Getting the right infrastructure in place with your accountant before you try to track anything
- Step 2 — Allocate strategically every month: The “hardest first” approach that keeps you compliant and flexible
- Step 3 — Make it your primary document: Using the NARF as a strategic management tool, not just a compliance exercise
How Andrea’s Net Asset Roll Forward System Works
Step 1: Set up the foundation BEFORE you try to track anything
This is not something to wing on your own. “Get it set up right so that you can class everything,” Andrea says. “Have your accountant or bookkeeper do this. The best set-up is if you can give your accountant a cheat sheet ahead of time of like, ‘ We have these grants, these kinds of expenses, this is what you should be allocating to.'”
The Bookkeeper Cheat Sheet is a small thing that makes a massive difference. Every time a new grant comes in, you give your bookkeeper the details — the categories, the allowable expenses, the timeline — so they’re coding things correctly from the start instead of you untangling it months later when a report is due.
The other non-negotiable is a monthly close process. “A lot of people don’t do a monthly close process. That’s not okay, especially when money is tight. If you’re struggling financially, it is really important to have timely financials and to know which grants are getting drawn down, which ones are not.” If you don’t have one, that’s step zero. Before any of this works, you need that rhythm in place. The Sample Monthly Close Checklist is a good starting point to build from with your accountant.
And one more thing Andrea is emphatic about: as the ED or CEO, you need to sign off on the monthly close every single month, not just the finance team. Review bank statements yourself (not just the QuickBooks reports, the actual bank statements) and spot-check vendors and larger transactions. “If there’s fraud, you’re on the line for this.” The financial reports can look fine while money is quietly leaving the building. The monthly close is what catches it.
Step 2: Allocate strategically with the strictest grants first
This is Andrea’s signature move, and it’s the piece that turns the Net Asset Roll Forward from a tracking spreadsheet into an actual management tool.
When you’re allocating expenses to grants each month, you don’t do so randomly, but by following a priority order:
- Hardest first: Grants with approaching deadlines get allocated first. If a grant expires in three months, you need to draw it down before you lose access to it.
- Most stringent next: Funding sources with the tightest restrictions come next. These are the ones where there’s very little room to shift categories even if you need to.
- Easiest last: The more flexible ones — maybe there’s a timeline but broad programmatic use — get whatever remains.
Why does this matter? Because without a priority system, it’s easy to end up in a situation Andrea describes like this: “This program is overfunded by $200,000, but this one’s underfunded by $200,000. You’re like, ‘Oh, I have $400,000, I’m in good shape. I have enough money.’ No, you don’t. Those funds are restricted and you can only use them for what they’re allotted for, not what you actually need.”
When the allocations aren’t matching up, the move is to negotiate with your funders, and sooner is much better than later. “From a compliance perspective, you need to get sign-off from the donor that they’re okay with you moving categories, but usually people are very okay with it. They just need that email.” PDF that email. It’s your audit record.
One tip Andrea shares (that foundations rarely volunteer) — many have internal rules about how much you can shift between categories — 10%, 25%, sometimes more — that won’t appear in your grant agreement. “Ask about the percentages they give you, both overall and between the categories.” Knowing this upfront gives you leeway as you allocate throughout the year.
Here’s a story that illustrates why monthly allocation matters: “At Propeller, we had a grant that got double-booked. We thought we had $200,000 more than we actually did. How scary is that?” Their Net Asset Roll Forward caught it. Going back to the grant agreement, line by line, they found the discrepancy. “There will be mistakes made no matter how good your accounting team is, and your job as the CEO or ED is to catch them early. This tool helps you do that.”
Step 3: Make the NARF your primary financial document, not your P&L
This is where Andrea gets genuinely excited, and where the real power of this system shows up.
“A lot of people will be like ‘Oh my P&L looks good,and my balance sheet, too.’ But I don’t really care what those look like day to day. It’s actually the Net Asset Roll Forward that I look at. That’s my go-to, not the P&L.”
The reasoning is fundamental to how nonprofit and social sector finance actually works. If you are doing your job right, you are getting lots of multi-year commitments — none of which are reflected on your annual P&L because you cannot recognize future revenue.”
“You might raise $3 million in multi-year grants, but none of that’s going to show up on your P&L. So it might look like you’re not doing well, but in actuality you have $2 million coming in 2026, 2027, 2028.
Andrea built a dashboard on top of the NARF showing committed grants by year, so the team could see years out what they’d raised and what was coming. That dashboard became the lens for the decisions that actually matter like staffing and fundraising strategies.
You might raise $3 million in multi-year grants, but none of that’s going to show up on your P&L. So it might look like you’re not doing well, but in actuality you have $2 million coming in 2026, 2027, 2028.
Non-profit numbers can feel as complicated as a spider’s web. A Net Asset Roll Forward spreadsheet turns them into something beautiful.
When to do this Yourself vs Bring Someone in
A lot of this you can start on your own — working through Andrea’s template, building the bookkeeper cheat sheet, and getting your monthly close process in place. The framework is clear enough to be self-directed if you have the right accounting setup.
That said, it’s worth bringing someone in when:
- You’ve never had a monthly close process and don’t know where to start
- Your QuickBooks isn’t set up by class/grant and needs restructuring
- You have more than 10-15 grants and the complexity is already getting away from you
- You’ve had grant reporting discrepancies — overages, compliance questions, or audit findings
- You’re about to take on federal funding for the first time (this is exactly the moment to get ahead of it, not catch up later)
If you want help
Andrea Chen works directly with nonprofits and social sector organizations to get this right — from setting up the accounting infrastructure to building the monthly processes that actually hold over time. She’s built this system herself, taught it across hundreds of organizations through Propeller, and brings both the technical depth and the leader’s perspective to the work.
She’s a good fit if:
- You’re managing 10+ funding sources and your current system is starting to strain
- You’re taking on federal funding or preparing for a single audit for the first time
- You have a bookkeeper or accountant but no one’s set up a proper monthly close process
- You want help getting your whole team oriented around the Net Asset Roll Forward — not just your finance person
Connect with Andrea!
Try it Yourself
Andrea’s Net Asset Roll Forward Toolkit:
- START HERE guide with Andrea’s advice built in
- Dashboard showing committed grants by year
- Bookkeeper Cheat Sheet — give this to your accountant every time a new grant comes in
- Full Net Asset Roll Forward with realistic working examples
- Sample Monthly Close Checklist — a starting point for building your monthly close process with your bookkeeper
Recommended Reads:
- fiscally seCURE — An excellent financial management book by Helia Collective Member, Raj Thakkar.
Questions to Sit With
Take some time with these — there’s wisdom in the thinking, not just the doing.
- Do I have a monthly close process, and am I actually reviewing the results each month?
- Am I making strategic decisions based on my P&L? What might I see differently if I was looking at the Net Asset Roll Forward instead?
- Do I know which of my grants are about to end, and am I drawing those down first?
- If a grant got double-booked today, would I catch it?
- What decisions am I avoiding or guessing at because my restricted revenue picture feels unclear?
Not sure Andrea‘s the right fit? Talk to Helia directly!
This article comes from a coffee chat with Andrea Chen in September 2025. These conversations form the heart of the Helia Library — because we’ve learned the most from doing and from talking with other doers willing to share their wisdom. We don’t need to start from blank pages or do everything alone.
As always, take what’s helpful, leave what’s not, and make it your own.
About Andrea
Andrea Chen spent her Sundays for years justifying every expense down to the penny with receipts spread across her kitchen table, trying to make sense of federal grant reporting. She turned that painful experience into a system that helped her grow Propeller from $30K to a multi-million dollar organization — and now helps other social sector leaders avoid the financial chaos she lived through. She still gets genuinely excited about a well-organized monthly close process.
Work with Andrea
