Nonprofit – Page 2 – Beck & Company

Relax the Rules and Increase Employee Productivity. Yes, It’s Possible!

When you think about employee productivity, chances are good that you think about driving home the message that the faster and better you can get people to work, the more productive they’ll become.

Yet such employee productivity messages often backfire. Employees are adults, and hearing messages about working harder, smarter, and better often have the opposite effect. Instead of saying, “Yes, Boss!” and forging ahead, they slack off. It’s as if you’ve issued them a challenge instead of a request.

If you’re tired of giving workers the same message about employee productivity, we’ve got good news for you. Relaxing, instead of tightening, the rules at work may boost productivity.

Three Low-Risk Rules to Relax for Productivity

Although most of the evidence about relaxing to boost productivity is anecdotal, you can still try a few simple ways to lighten up and get more done. These three low-risk, high-potential-benefit changes can be tested in most nonprofit workplaces.

Extend casual Fridays to casual summers: Casual Fridays offer even the most conservative offices to relax the dress code once a week. Casual summers take this a bit further, offering employees the chance to ditch the neckties or high heels in favor of casual, professional attire. Speak with your organization’s human resources department on how to craft a policy about casual attire to make sure people understand that ‘casual’ doesn’t mean ‘ready for the beach.’ You may also want to specify exceptions, such as meetings with clients, donors, directors, and the public that require a more polished, professional appearance.
Relaxed working hours: While it’s necessary to have enough staff to handle routine business during your regular working hours, allowing people to come to work early and leave early on a beautiful summer’s day may help productivity. Instead of feeling trapped at work, they may work harder and faster to get their work done and get out the door. Relaxed hours, flex time, or even working from home may help people focus so they can obtain the reward of more free time.
More breaks: Frequent breaks, even if they’re just to walk around the block, help boost productivity by giving people a change of scenery and a chance to clear their head. Banish the stigma of taking a break. Allow your employees a chance to actually have a lunch break, and give them a space away from their desks to eat. Breaks are part of work, and the less you hassle people about taking a few breaks here and there, the more productive they can become.

So which one of these ideas will you try? Choose one or try them all. The more you can reward, encourage, and inspire people, the better they will perform. Gone are the days of the Industrial Revolution when a mean supervisor was the way to get more work done. Instead of being the stick, offer a carrot. It’s the 21st century way to increase employee productivity.

Survival Guide for Nonprofit Finance Teams

Looking for more ways to enhance productivity of your team? Join us for this free webinar on Wednesday, August 31, at 2:00 PM ET. Survival Guide for Nonprofit Finance Teams will discuss ways you can increase productivity while facing the challenges facing nonprofit finance teams. Register here.

At Beck & Company, we can help you increase productivity when it comes to your accounting by taking the weight off your shoulders. Our experienced CPAS understand the nuances of nonprofit accounting and love helping great nonprofits succeed. We offer auditing services, tax and accounting services, and more. Contact us today or call 703-834-0776.

A Smooth Transition to a New System Begins with Training

Changing to a new system can be exciting. Many people on staff will be happy to say good-bye to the old system and its quirks. Others, however, may not be as quick to embrace change. A smooth transition to a new system begins by helping everyone see the benefits of change and working with them to understand its importance.

Why Do People Resist Change?

Entire books have been written about the human propensity to resist change. Some people just prefer things to be the same, day in and day out. Others love change and seek excitement. These are all quirks of human nature, and it’s almost a certainty that your staff includes people on both extremes of the change-spectrum as well as many people who sit squarely in the middle.

Five Best Practices to Prepare Your Team for Change

There are many best practices from the world of corporate training and adult learning that you can put into place to help your team ease through the transition. We’ve put together five of our favorites, techniques that we’ve seen work time and time again. Try these to help your team embrace change and move forward.

Identify the “Nellie Nay-Sayers”: Nellie Nay-Sayer is the pessimist in the bunch, the one who loves to say “I told you so” when something doesn’t work out. Nellie doesn’t want an idea to fail, but she’s sure it will. To help the Nellie Nay-Sayers in the bunch embrace change, make them part of the change. This way they have a vested interest in the outcome. Invite Nellie to be part of the team to find a solution and to learn about the new system. Include her in the discussions. The more you can make her feel part of the solution, the more you’ll dampen her negative attitude and fuel the positive.
Explain the reasons why: Give your team plenty of information and time to understand the reasons why you’re choosing a new system. Most will already understand the importance, but some do not. Host meetings, lunch and learns, and staff briefings to help people understand and recognize the importance of the new solution. Don’t spring the information on them at the last minute, but ramp up to the introduction of the new software with plenty of information for all.
Ask for input: Be sure to ask for input from multiple groups within your organization. Include members from each department so that everyone has a voice in the decision. Each group brings their own needs and concerns to the table. Including everyone ensures that the new solution you choose will meet the majority of needs in your organization.
Offer plenty of training: Training in a new system is more than a one-time workshop. Train small groups of people in the new system, and provide additional follow-up training and support. Invite participants to bring in work-related projects to use in the training so that the information they apply is both meaningful and useful. The more hands-on training you can provide to adults, the better they learn.
Train an expert: Another way to make the transition easier is to choose one internal expert from each department, someone who will receive advanced training and support. The onsite expert can then be the point person for questions and to help staff use the more advanced features of the system. This helps everyone use the new system to its fullest capacity, and gives people a friendly face from inside the organization to go to with questions.

It may take weeks to ramp up to your new system’s launch, but when it’s in place, and everyone has been training, you’ll find that people make the transition easier when these techniques are used to help them adjust. Change is hard, but with information, participation, awareness and training, it becomes a lot easier.

Beck & Company Training Opportunities

Beck & Company offers certified public accounting as well as business advice, with an emphasis on the world of nonprofit organizations. We understand the nuances and challenges that nonprofits face and can help you with accounting, business advice and more.

We offer many free training opportunities for your nonprofit organization. Join us for this exciting webinar, The New Roadmap for Nonprofit Finance, on August 16 at 2:00 PM ET. Check out the full list of upcoming webinars here.

Thinking of Making the Switch? Now’s the Time for a New Accounting System

No matter how much you may love your current accounting system, there comes a time when you need to make a change. It’s like a favorite pair of shoes that have simply worn out. No amount of patching or polishing is going to fix them. If that’s how you feel about your current accounting system, now is a great time to make a change.

Is It Time for a New System?

Change is always hard, and changing accounting systems can be a little bumpy for some companies. Employees are used to working a certain way. The current system is familiar and comfortable. They know precisely how to run reports, input data, and find what they need.

But there are certain signs and signals that let you know when it’s time for a new accounting system. Do any of these sound familiar?

Expansion: Your organization has grown since you implemented your original accounting system. Now you’ve got several locations, additional staff and more volunteers. The current system can’t accommodate all of its users. You’re constantly paying more money for additional site licenses so that telecommuting workers and new locations can access the same data.
Out-of-synch data: Separate systems at numerous locations mean that you’re regularly updating databases so that the information is in sync. You’re feeling frustrated because changes made to one database don’t flow through to others.
Changing priorities: When you installed your current system many years ago, you just needed to replace a paper-based accounting system with a computerized system. Now, however, you need to track different funds. You’ve expanded your operations, and offer more services, but your system can’t handle the newer information. Priorities have changed, but your system hasn’t.
Forever fixing: “Forever fixing” or “constantly patching” means that you’re always patching, fixing, or tweaking your existing system to get it to work. Maybe it crashes a lot. Perhaps it was infected with a virus last year which your IT people were able to remove, but it hasn’t worked the same way since. It stalls, freezes, or otherwise doesn’t work the way it should.

If you recognize your organization in any of these scenarios, it’s time to consider a new accounting system. You’ll be amazed at what’s available now for small to mid-sized businesses.

Newer accounting systems on the market are cloud-based. Cloud-based systems run off of the internet, so there’s no software to buy and install. These systems are also accessible wherever you have internet access. You can continue working whether you’re at home or at the office, and you can add additional locations quickly and easily.

Because such systems run off of the internet, the data streams in “real time” to the main database and back out to the users. This means that changes made in one location in your company flow through to all users. No more accessing data in one part of your company and finding it differs from data in another part.

Lastly, newer accounting systems synchronize with other systems such as membership systems, donor tracking and more. Your nonprofit can integrate multiple systems into an accounting system and track all of its operations.

Learn More

Learn more about an accounting system perfect for nonprofits by joining us for this free webinar, Intacct Product Tour for Nonprofits, on Tuesday, August 9, at 1:00 PM ET.

A nonprofit organization today needs a sophisticated database system. If you’ve put off changing to a new system because you were afraid of the downtime or expense, please contact Beck & Company today. We work with nonprofits to transition them into new systems and help them enhance their business and accounting processes. We can help you select the best accounting system for your needs and help you transition to a new system with minimal disruption and downtime. Contact us today or call 703-834-0776.

Uh-Oh: What to Do If Your Organization Loses Tax Exempt Status

It’s with a sinking feeling that you learn your nonprofit’s tax exempt status has been denied. You’ve got two tasks before you now: figuring out how it happened so that you can prevent it from happening again in the future, and appealing the decision to get your nonprofit’s tax exempt status active again.

Tax-Exempt Status: What Does It Mean?

Non-profit status is granted to your organization by the state. It is a business designation, not a tax designation. Once your organization has non-profit status, you can then apply for tax-exempt status.

Reasons Why You Can Lose Tax Exempt Status

The IRS lists six reasons why you can lose your tax exempt status. These fall into the following categories:

Deriving private benefit from charitable activities: This is a big no-no with the government. As a nonprofit organization, the benefits derived from your organization must flow to the groups you say you serve. You shouldn’t personally profit from the activities or the organization.
Lobbying: Nonprofits must not engage in political lobbying.
Political activity: Nonprofits must also refrain from any other political activities.
Unrelated business income: Income that’s derived from avenues not directly related to your nonprofit’s mission or activities can also be cause for losing tax exempt status.
Failing to file an annual report: Even if your organization doesn’t have to pay an annual income tax, in order to maintain your tax exempt status, the government requires specific information be reported each year. Failure to file an annual report can be problematic because it contains much of the required information to maintain tax exempt status.
Deviating from tax-exempt purposes: An organization sets forth specific reasons why it should be tax-exempt. Deviating from these purposes, or changing too much of what it does, is another reason why it can lose tax-exempt status.

Regaining Tax Exempt Status

It goes without saying that losing your tax exempt status is a serious problem. It shows that someone in your organization isn’t filing the right documents or that the group has lost sight of its mission. It may be time to meet with your leadership team and make sure everyone is on the same page.

After the dust settles and you can figure out where the mistakes occurred that led to losing nonprofit status, it’s time to roll up your sleeves and regain your status.

The National Council on Nonprofits recommends that you consult the IRS’s publication, Revenue Procedure 2014-11, and consult with your accounting firm for help regaining your nonprofit status. You must also clearly communicate with your members and donors, who may worry that their donations or dues aren’t being used properly. Let them know what is going on and the steps you are taking to fix the problem.

Going forward, be sure to take the following steps to safeguard your nonprofit status:

Maintain accurate records in a central location, and update those records periodically.
File all paperwork at the state and federal levels by the due date. Leave nothing to chance. Make it a priority!
Screen all potential new projects according to the rubric of how well they meet your current mission. Be tough. If they don’t fit the mission, you may need to pass on them.
Make sure that no one at your organization derives monetary gain from their work at the organization. Make it clear as part of your HR policies that such actions aren’t tolerated.
Hire external counsel, such as a CPA firm, to review your annual reports and your record keeping. An annual audit conducted by a reputable firm is a necessity.

It can be disheartening to learn that your organization has lost its nonprofit status. Take steps to rectify the situation and prevent future problems, clearly communicate those steps to your constituents, and soon you should be back on track to serve the people or causes that need you the most.

Beck & Company Certified Public Accountants and Business Advisors

At Beck & Company, our team of certified public accountants can guide you on how to apply for and maintain your tax-exempt status. We provide auditing services, consulting, business advice, workshops, and seminars for the nonprofit world. For more information, contact us or call 703-834-0776.

Keeping the Cash Flowing and Other Nonprofit Woes

Living hand-to-mouth, or living one step ahead of the bill collector, is something most college kids are chided about when they graduate and take their first job on the corporate ladder. Yet many nonprofits are living “hand to mouth” or waiting for the next fundraising event or donation campaign to make up for significant shortfalls in their cash flow.

If that just described your nonprofit, it’s time to take action. Just like newly-minted college graduates can only live on Ramen noodles and a weekly paycheck for so long, you’ve got to put aside a nest egg to carry your organization through the lean times.

No matter how good you’re doing now, lean times will come. They may come because of lowered donations or not winning a grant, or they may come simply because your constituents’ needs burgeon beyond what your current operating budget can sustain. That’s when having money set aside can be a lifesaver.

Five Tips for Corralling Your Cash Flow

If it’s time to corral your cash flow, these five tips can help you regain control and manage it more effectively against the proverbial rainy day.

Balance sheet management: A strong equity-to-debt ratio ensures that you’ve got enough cash on hand to safeguard your organization during lean times. If the ratio favors debt to equity, work on bringing it back into balance or slightly tipped to the equity side of the equation.
Avoid unnecessary debt: Debt, such as credit card debt or loans, can be used strategically to offset larger purchases. But don’t get into the habit of taking on large debts while waiting for more money to come in. That grant you’ve “always” gotten may not be awarded to you this year, or a charity fundraiser could be cancelled due to a snowstorm or hurricane. Smart use of debt may mean funding a large purchase with a loan or a no-interest credit card payment, for example, that lets you pay the principle off without interest or penalty.
Consider leasing major equipment: If your nonprofit regularly buys vehicles for its use, consider leasing them. The cost of the lease can be written off and you won’t have expensive payments to make to own something that depreciates in value. Other equipment such as office furniture, copiers and computers can also be leased.
Embrace the cloud: Cloud-based software can save an organization a great deal of money, which puts cash back into the cash flow. Cloud software uses rented or shared server space with other companies. You can renew licenses on a monthly or annual basis, and you don’t need to invest in costly upgrades or updates. The information saved to the cloud is also accessible for others in your organization via a web-based interface making it easier to share. It saves you money while enhancing productivity, two great strategies for improving cash flow.
Avoid taking on new projects until you’re sure you can afford them: That’s easier said than done for many nonprofits. The need is great, and the resources to serve that need may be small. But if you take on too many new projects too soon, without capital undergirding those projects, you could be headed for trouble. Instead, set aside money for specific capital campaigns such as building funds or new projects so that the money is earmarked for the intended purpose without taking it from the general cash flow.

Talk to your accountant or a business consultant such as Beck & Company about other strategies to improve your nonprofit’s cash flow. You can’t always rely on this week’s income to pay next week’s debts. Some weeks your donations will be up, some weeks they will be down. But with the right cash management strategy, you can be assured you’ll always have enough on hand to pay the most important bills first.

Beck & Company Certified Public Accountants and Business Advisors

At Beck & Company, we know that earning a margin means achieving your mission. Managing your money so that you can continue to do the work of your nonprofit is our primary concern. We work with nonprofits to help them with their accounting and business planning needs. Contact us today for more information, or call us at 703-834-0776.

Trends to Watch: The Rise of Social Media for Nonprofit Donor Communications

Do you use social media to keep in touch with friends, family, colleagues or acquaintances? If so, then you’re among the estimated 65 percent of all adults using social media. Whether you tweet, pin or post, social media has become an important communications channel for nonprofit marketing.

The Top Three Social Media Sites for Nonprofits

You probably have your favorite social media sites, but some seem to work best for nonprofit communications. The top three social media sites for nonprofits are:

Facebook: Facebook remains the social media site of choice for most nonprofits, and it’s no wonder. The site consistently ranks as the most visited site in the world with 09 billion active daily users. Nonprofits can share stories, webpages, blog posts, graphics, videos, and more, reaching an enormous audience who care about their cause.
Twitter: Saying what you need to say in 140 characters or less is tough, but Twitter’s newer features, including the ability to share pictures, makes it appealing for more people. Nonprofits who need to get the word out quickly about an immediate need or cause can do so via the rapid-fire delivery of the Twitter system. Twitter has 115 million daily users, far less than Facebook, but those users prefer the short, direct messages the site sends.
YouTube: YouTube, owned by search engine giant Google, is an enormous repository of videos. Anyone can establish their own YouTube “channel” and upload videos. Nonprofits who want to reach out personally to potential supporters by sharing videos of events, constituents, or the groups they serve can find no better way than through video. About one-third of the entire world’s population watches YouTube.

Nonprofits are using social media daily, with posts going out at least once a day (often more frequently). The person sending out those messages varies according to the nonprofit and its organizational structure. In some larger nonprofits, a director of communications handles the lion’s share of PR, digital communications, and social media. Other staff positions responsible for social media include executive directors and developmental directors, who may be tasked with both social media and other communications related to their programs.

Social Media Trends for Nonprofits

If your nonprofit doesn’t have a written social media management policy, it may be time to create one. A simple policy that spells out which sites your organization has a presence on and who has the final say about what goes on social media can help you stick to your message online.

More importantly, a specific social media policy can prevent media faux pas that can be a nightmare to clean up. One single mistake can derail a lot of good work by raising the ire of your constituents or creating negative press. Sites like Twitter create a unique, publicly accessible URL for every message you tweet. That means that even if you erase a message from your Twitter account, it may already be too late; it could be shared or indexed, making it even more difficult to remove.

Social media use and sharing policies should include instructions on who may post and who is delegated to check and respond to messages. Followers, fans, donors and constituents may choose to communicate with you via your social media sites. Be sure to have someone tasked with monitoring and responding within 24 hours to messages on social media. The instant nature of these sites has made quick responses important. People expect fast responses, and if they don’t get them, they can feel slighted.

Enduring Value in Nonprofit Consulting from Beck & Company

Social media started out as a trend, but it’s here to stay. At Beck & Company, we believe that any trend that offers enduring value is something of note. We hope that this information helps your nonprofit achieve its mission more effectively.

Beck & Company is an accounting and business consulting firm for the nonprofit industry. We have many years of experience and a staff with direct, hands-on experience in the nonprofit world. For more information, contact us online or call 703-834-0776.

Operational Efficiencies and Achieving Your Mission: The Hidden Link

The business side of nonprofit management sometimes gets short shrift among those actively working to achieve your nonprofit’s mission. Those working on the front lines, or on projects directly supporting the mission, may look askance at those whose sole focus is back-office operations and organizational efficiency.

Yet those who focus on operational efficiencies and productivity in the nonprofit workplace are supporting its mission in many important ways. Without someone paying attention to operational efficiencies at a nonprofit organization, precious resources may be spent unproductively.

The Importance of Operational Efficiencies

“Achieve the mission” is usually the rallying cry of the nonprofit organization. Your nonprofit’s mission may be tied to healthcare, education, animal rights, the arts, or helping industry professionals network. No matter what its mission, the growing need for services, combined with the rising costs of providing those services, means that every resource at your organization must be used as effectively and efficiently as possible.

Enter the office people: the folks from your accounting, finance, human resources, sales and marketing areas (if you’re lucky enough to work for a nonprofit large enough to have people dedicated to each of these areas and not wearing multiple hats). These are the people tasked with making sure that those precious resources such as donations, grant money, membership fees, dues, and fundraising monies are spent in a wise manner. They’re tasked with finding ways to improve how your organization does its much-needed work without sacrificing the quality of that work.

If it seems like a big job, it is. Fortunately, there are ways to help improve operational efficiencies without extreme measures.

Improving Operational Efficiencies: Three Tips

Although specific people in your nonprofit may be tasked with improving operational efficiencies, everyone within your organization plays an important role. The following tips may encourage everyone to find ways to work better, faster, and smarter.

Share resources: Share resources, people, and time with other departments. Avoid the “silo” mentality, which forms walls or barriers around your group to keep information and resources in the group instead of sharing with the broader team. The more you can share, the more efficient your organization will be. Shared resources and talents save money by adding value or solving problems that a single person may struggle with.
Embrace mobile technology: Smartphones and cloud-based business systems are two ways in which you can make it easy for your team to work wherever they are. If they’re traveling, at an event, or at home, they can still respond to inquiries, handle work, and access company information. It makes for a much more efficient system than older site-based software and resources.
Reduce unnecessary travel: Take a long, hard look at your organization’s travel schedule and budget. Do you really need to attend that many trade shows, conferences and events? Face-to-face team meetings can be replaced by video conference, conference calls, or shared documents. With so many options to work easily from a distance, the need for travel should be reduced. Save travel budgets for the most important things that can only be accomplished in person, and reduce costs whenever possible in your travel by staying at inexpensive hotels, limiting meal budgets, sharing taxis, and other cost-saving measures.

Operational Efficiencies Enhanced by the Right Software

We mentioned cloud-based systems as part of operational efficiencies, and they remain an important and accessible path to improving access, communications and collaborations for nonprofits. The right software solution for your nonprofit organization can make it much easier to track expenses and income and make sure the two are balanced appropriately. Making margin enables you to fulfill your mission, and that’s important for any organization. With the right software in place, improving operational efficiencies is a lot easier.

Dive deeper into nonprofit software and attend this webinar “Not Your Mother’s Chart of Accounts—Leveraging Cloud Technology for Nonprofit Accounting.”

Beck & Company Certified Public Accountants and Business Consultants

At Beck & Company, we believe that technical experience must be matched with a service mindset for the best customer experience. We offer consulting, seminars, workshops, and accounting services for the nonprofit industry. For more information, contact us online or call 703-834-0776.

Tips to Help You Prepare for a Nonprofit Audit

Greater benefits require greater transparency, and the tax-exempt status of nonprofit organizations puts them at greater odds of an audit. The scrutiny required of a nonprofit’s finances and accounting is part of the trade-off for being a tax exempt organization. Donors and members trust you to fulfill your organization’s mission using their money, and in return, they expect reasonable use of their funds and clear reporting of how that money is used.

Who Requires Audits?

Depending on your organization and how it is funded, you may be required to perform a federal or state audit. The National Council of Nonprofits provides a list of states requiring an audit. This list changes frequently, so please check back with your state or your accounting firm for the current regulations.

Nonprofits that receive federal funding during a fiscal year that exceeds a certain amount (which can change annually) should keep an eye on whether or not they need an audit. Chances are good that you should have an independent audit conducted. Learn more about this requirement from the National Council of Nonprofits.

Preparing for an Audit

Preparing for an audit is a combination of common sense and detective work. Your goal should be to provide as much accurate documentation to the auditors as possible in a timely fashion so that they can go about their work without delay.

To prepare for an audit, you should:

Draft an engagement letter, which specifies the details of the independent audit that you have commissioned.
Meet with the auditing firm to ensure mutual understanding of goals, expectations and timelines.
Organize documents required for the audit.
Prepare folders for the auditors that include pertinent documents.
Read the “prep pack” provided by the auditors if they include one. A prep pack provides background on what you need to do to prepare for the audit.
Identify staff contacts for the auditors.
Schedule a meeting to brief the staff about the audit.

After the Audit: What to Expect

Depending upon the timeline you’ve set for the audit, you should receive the auditor’s report within a reasonable amount of time after the audit itself is completed.

The audit review committee, board of directors and senior staff should meet to review the initial draft of the audit. You can provide consolidated feedback, and request clarification of any findings. Then, the final audit can be prepared.

A good audit will identify any internal weaknesses or problems with compliance to generally accepted accounting standards and rules for nonprofits. Review the issues uncovered during the audit, and prepare a plan to respond and correct and problems. Operating inefficiencies discussed in the audit documents should also be thoughtfully considered and corrected.

An audit may not necessarily uncover evidence of fraud, although inefficiencies and problems may point to fraud. It’s up to your staff and board of directors to follow through on any issues described in the audit.

A formal presentation of the audit report closes out the process. The board of directors and management may offer suggestions to fix any issues, which can be included in the auditor’s report.

Is It Time for an Audit?

Audits are an important component of proper nonprofit management. An audit shouldn’t be viewed as a burden, but rather a chance to improve your operation’s management and ability to fulfill its mission.

An upcoming webinar will discuss how the demands on nonprofit finance teams have continued to increase. Also, how you must create greater levels of transparency and visibility, enhance the governance of the organization, and strengthen decision-making and strategic focus – all while improving productivity. Click here to register for the Survival Guide for Nonprofit Finance Teams Webinar on Thursday, June 23rd at 11 AM PT/2 PM ET.

The team at Beck & Company can provide the expert insights into your finances and operations to help your nonprofit grow and thrive. Founded in 1987, the CPAs and consultants at Beck & Company understand the complexities and nuances of the nonprofit world. Please contact us at 703-834-0776 for a consultation.

FASB Set to Release Nonprofit Accounting Changes Summer 2016

The Financial Accounting Standards Board (FASB) is set to release the first wave of nonprofit accounting changes during the summer of 2016, according to an article in Accounting Today.

The article indicates that FASB has completed its assessment of the feedback received on Phase 1 of its intended changes. The organization appears ready to release the first set of accounting standards changes that will guide nonprofit organizations in the near future.

The changes are expected to significantly affect the way nonprofits report net revenue, as well as other less significant changes impacting how nonprofits report and account for their finances. This is the first major overhaul of the nonprofit accounting guidelines in over 20 years. The overhaul came because FASB recognized the changing face of the nonprofit sector, with newer types of nonprofits requiring a different view on accounting standards.

Nonprofits Prefer to Stay Flexible, In-Sync with For-Profit Accounting

One thing that surprised the people at FASB was the outpouring of feedback they received from the nonprofit sector. Typically, the standards board receives only a smattering of feedback when it requests public input. The nonprofit sector sent in 250+ letters detailing feedback on the proposed changes.

The biggest request was that FASB retain the flexibility it has previously allowed in nonprofit reporting. Another request that came over loud and clear was the desire for nonprofits, in similar industries as for-profits, to continue using accounting methods and standards in line with the industry itself, rather than based on tax status.

The goal of keeping both for-profit and nonprofit accounting models in sync is to keep their reporting methods clear and easily understandable by most people. Because many people are at least familiar with basic accounting concepts used by for-profits, by keeping the nonprofit model similar, donors and the general public can better understand the finances of nonprofits. Transparency is maintained as it pertains to financial records because the information can be understood more easily.

The Rollout Schedule: What to Expect

As Phase 1 begins rollout this year, it will impact reports generated starting December 2017. Financial statements for the fiscal year ending December 2017 should follow the new guidelines, with early adoption permitted.

The Big Change: Two Net Asset Reporting Categories Instead of Three

The biggest changed planned for Phase 1 includes condensing the three net asset reporting categories into two. The current categories include unrestricted, temporarily restricted and permanently restricted. The two new categories will be donor restrictions and without donor restrictions. The “without donor restrictions” category replacing the former unrestricted category.

Other areas impacted by the changes include some minor tweaks in the reporting of investment returns, as well as liquidity and availability.

Help Navigating the Changes

An upcoming webinar will be discussing how the FASB and IASB have released a new revenue recognition standard – which will dramatically impact the financial processes of software companies. Although the effective date is several quarters away, you need to begin taking action now. Click here to register for the New FASB Rev Rec Standards, Actions You Should Take Now Webinar on Thursday, June 16th at 11 AM PT/2 PM ET.

It can be difficult to discern which changes may truly impact your nonprofit organization and which may be considered and evaluated for your particular needs. The professional CPAs and consultants at Beck & Company can assist you through these changes, helping you update your accounting standards to reflect your nonprofit’s financial models and goals. We invite you to contact us to learn more. Call us at 703-834-0776.

To Telecommute or Not to Telecommute? Telecommuting May Drive Productivity for Non-Profits

Telecommuting may call to mind images of pajama-clad workers surfing the net, but new information indicates that offering telecommuting as an option for non-profit workers increases employee productivity.

BizTech magazine reports that remote employees tend to work 20 percent more than on-site employees. They typically clock more than 40 hours per workweek, too.

Mobile technology has revolutionized how many companies view their workforce. Onsite workers clocking an average 40-hour workweek seem to be a remnant of our country’s industrial past, when workers punched a timecard and were paid hourly. Today’s workforce is more likely to seek flexibility in working hours and a better work-life balance, but are willing to work longer hours in exchange for that flexibility.

Currently, 45 percent of nonprofits offer some type of telecommuting policy. The benefit to employee productivity is enormous. Telecommuting employees are 20 percent more likely to work longer hours when engaged in projects from home, and will easily clock more than 40 hours when working on creative projects.

Nonprofits seeking to enact telecommuting-friendly policies need to understand the potential technology and budgetary ramifications. The technology needed to support a mobile workforce includes cloud-based applications, which can be easily accessed from any Internet browser, mobile phones, and laptops.

Some nonprofits have a ‘bring your own device’ policy, allowing workers to use their own smartphones, tablets and laptops to access company data, but with that policy comes a price. Nonprofits who allow workers to use their own devices to work on company systems must have higher security protocols in place to prevent accidental data breaches, viruses and malware from corrupting important systems and inadvertently sharing sensitive donor information, such as credit card numbers.

Telecommuting Employees Are Happier

Studies show that telecommuting employees are generally happier and more satisfied with their jobs than their onsite coworkers. Satisfied employees tend to stay in their jobs longer, leading to reduced turnover and greater productivity.

TinyPulse, an employment survey startup, assessed 509 full time remote employees and data from over 200,000 other employees to create a portrait of the happiness and satisfaction of remote workers.

Remote or telecommuting employees ranked their happiness and job satisfaction much higher than their onsite coworkers. The only drawback to telecommuting they noted was a decrease in coworker relationships and a feeling of connection with coworkers. For some, this was a drawback. For those who are tired of office politics, it may be a benefit.

The Future of Nonprofit Employee Productivity

By 2018, it is projected that more than 2.5 million nonprofits will embrace mobile workforce management solutions. This reflects a 21 percent increase over today’s numbers. With that growing use of mobile technology, specific steps should be considered by nonprofit managers.

Create a structured telecommuting policy for employees. A written policy sets a common understanding of what is allowed (and what isn’t), and also provides a good recruiting benefit when attracting talent to your organization.
Update your software and systems with cloud-based solutions that are easily accessed via mobile devices.
Discuss security issues with your IT staff or consultants now. Make sure that sensitive data, such as donor lists, accounting and fund data, and employee data is protected with the best security you can install. Close the barn door before the proverbial horse escapes, not after.

The future seems to be one in which work, however it is defined, can be conducted just as easily from the bleachers at a child’s Little League game to an office downtown. Higher job satisfaction, flexible work arrangements, and personal investment into a nonprofit’s mission are all benefits for employees working at nonprofits. When employee productivity increases too, it’s a win-win for both employees and their organizations.

An upcoming webinar will be discussing how the demands on nonprofit finance teams have continued to increase. Also, how you must create greater levels of transparency and visibility, enhance the governance of the organization, and strengthen decision-making and strategic focus – all while improving productivity. Click here to register for the Survival Guide for Nonprofit Finance Teams Webinar On Thursday, June 3rd at 11 AM PT/2 PM ET.

Beck & Company provides nonprofit accounting and consulting services nationwide. Founded in 1987, our staff of CPAs and seasoned nonprofit experts can help you with audits, tax compliance and more. Please call us at 703-834-0776 for an appointment today.