accounting – Beck & Company

Are You Feeling Overwhelmed Performing Accounting and Tax Service for Nonprofits?

Are you feeling just a little overwhelmed performing your own accounting and tax services for your nonprofit?

A Forbes survey found that 14% of nearly 3,000 people surveyed worldwide feel chronically overwhelmed. If you are, you’re not alone. Feeling overwhelmed is common today.

Oh, and by the way – the age bracket feeling the most overwhelm? Those 41-50 years old, or roughly, the age bracket for most senior nonprofit financial management types.

But it doesn’t have to be that way. We’re guessing you went into nonprofit financial management because you love finance, accounting, and the mission-driven culture of a nonprofit organization. You can rekindle that passion for your work again and manage that feeling of overwhelm with a few simple steps.

The Myth of Multi-Tasking

In the book “Scrum: The Art of Doing Twice the Work in Half the Time”, authors Jeff and J.J. Sutherland provide insight into why many people feel overwhelmed. They are trying to multi-task, thinking it boosts productivity. Their studies indicate the opposite.

A chart on page 91 provides statistics that indicate that as one’s attention is divided, productivity decreases. Working on two projects at once means a 20% loss in productivity due to switching gears; three projects at once, and you lose about 40% due to context switching. Context switching leads to feeling overwhelmed because the mind is never at rest, confident it can finish a project. It’s always jumping to the next open action item – which in turn makes you jumpy!

Accounting and tax service for nonprofit providers and nonprofit financial management professionals aren’t immune to this lost productivity. They may actually be at greater risk for lost productivity due to context switching due to the amount of concentration required to process accounting and financial data.

In addition to the focus needed to do your job, something is always clamoring for your attention. Messenger apps, emails, phone calls, colleagues dropping by your office – it’s a never-ending barrage of items competing for your attention.

Focus on One Thing at a Time

Multi-tasking doesn’t work. It’s a lie. So why do we buy into it?

We think it should work because, after all, if you’re busy working on seven tasks, that’s seven projects underway. However, time and time again, studies demonstrate that it is better to have one open task, complete it, then turn your attention to the next one.

Commit to single-tasking rather than multi-tasking. Turn off the television or music while you work. Shut down the instant messenger apps and sounds that ping and bong when emails arrive. Focus on one thing at a time.

Build a Set of Rules

Do you have an open-door policy? That’s a useful and common management technique. However, it can lead to people interrupting you and breaking your concentration. It is helpful to build out a set of rules and guidelines for your team so they know when they can interrupt you.

Some managers choose to post ‘office hours’ or leave their door open as a signal to their staff that they may interrupt them. Another technique is to use a shared calendar such as Google Calendar or an Office calendar and post your office hours there while blocking out time for work requiring deep concentration. Experiment to find the method that works the best for you.

Yes, You Can Turn Off Your Phone

Nearly everyone carries a cell phone today. It makes it convenient to call someone for a quick answer, dial AAA when your car breaks down, or find your coworker after hours. It can quickly turn into an invisible umbilical cord connecting you to the office 24/7. Cut the cord. Tell your coworkers you plan to switch your phone off at night and follow through. Make the hours after 7 p.m. or whatever time you choose “off limits” so you get some downtime.

You Have Permission to Take Vacation, Weekends Off, and Holidays

Nonprofit accounting and tax professionals often work long hours right before tax season. That may be inevitable. At other times of the year, those extra hours may be unnecessary. Take a vacation, weekends off, and holidays.

Workaholics are lauded in American culture, but they also get sicker faster and burn out. Don’t be a statistic. Close the office door, turn off your phone, and head to the beach or the mountains so you give your mind and body a rest. You’ll be better off for it, as will your nonprofit organization if you return refreshed.

Beck & Company

Beck & Company is an independent certified accounting firm offering accounting and tax service for nonprofits, nonprofit financial management, auditing services and more. Since 1987, we have helped many nonprofits in the Washington D.C. area and along the Eastern seaboard with their accounting and financial management needs. We provide audit, tax, accounting, and consulting service that addresses all aspects of a small to mid-sized nonprofit organization’s business. Contact us or call 703-834-0776 x8001.

Accounting for Nonprofits: Close the Book on It!

Preparing Your Books for the End of Year Close

‘Tis the season – the season when nonprofits everywhere start thinking about year-end close. This year, vow that you’ll do all you can to smoothly and efficiently close the books with minimal stress to your accountant. Accountants everywhere thank you.

In all seriousness, there are many reasons why doing a good job preparing your books for the end of year close is important. Without closing your books for the year, you’ll have no idea if your nonprofit was profitable or not. Closing the books and reconciling them means that you’ve tallied up everything for the end of the year, put a period or end point on it, and start with a fresh slate in the new year.

Register for this Webinar Now: The Modern Day General Ledger – Leveraging Cloud Technology for Nonprofit Accounting.

Closing the accounts for the year reset the revenue and expense lines to zero. These ‘temporary’ accounts are now ready for the new year, a clean slate, and a new eye to profitability. Without closing your books, you’ll have a muddle of data to assess, and you won’t get a clear picture on how well your organization achieves its financial goals during the year.

Accounting for Nonprofits: Tips for Success

There are certain steps you can take to successfully close your books for the end of the year. This includes:

Keep your accounts updated: Schedule time monthly to reconcile expenses and income. If you let it all pile up to the end of the year, it will feel overwhelming. There’s also more of a chance to make mistakes and forget items.
Create a checklist: A detailed and thorough checklist that details every step for your year-end close is a helpful resource. Such a process can guide you through the close out each year and save time.
Ask questions during the year: Hopefully, you have a great certified nonprofit accountants to work with, someone who knows your nonprofit and is open to questions. Don’t let questions delay your routine accounting practices. Ask questions throughout the year so that you don’t let mistakes proliferate.
Schedule plenty of time for your audit: Dovetail your end of year close with audit prep, but leave plenty of time for your audit. By doing both at the same time – audit prep and end of year close – you’ll be well-prepared for the new year.

Pay Bills, Lower Receivables

Another useful end of year task to tackle before reconciling and closing your books is to pay off any outstanding invoices so that you carry fewer into the new year. You should also review your accounts receivable file, and attempt to collect any past due invoices. You can certainly carry these over, but it is always a good idea to avoid open receivables. The fewer receivables you have, the more income your nonprofit has at the ready.

While closing out your books may not be top of mind as you celebrate the holidays, tackle the tasks early enough in the month so that you can get them done while people remain in the office. Note when your accounting team may be taking time off to travel or celebrate the holidays, and work around their schedules. You can complete your end of year close with plenty of time to enjoy the festivities of the season.

Beck & Company

Beck & Company provides nonprofit accounting and audit services in Washington, D.C and Virginia. Founded in 1987, we specialize in the world of nonprofit institutions, helping them to navigate the complex world of finance and accounting. Our services are always personalized, and cost-effective for your institution. We welcome your inquiry or call. Contact us today or call 703-834-0776 x 8001.

Nonprofit Financial Management Tips [Free Webinar]

Why Nonprofits Need to Learn More About ASC 606 and IRFS 15

Nonprofit financial management includes keeping abreast of FASB changes, and examining your accounting methods to ensure they coincide with the latest recommendations. In May 2014, FASB issued Topic 606: Revenue from Contracts with Customers. In it, plans were unveiled to require all entities, both public and private, to change how they accounted for revenues. Revenues were to be recognized when the entity satisfied the performance obligation with the customer. This usually means that when goods or services are transferred to the customer, the revenue can be recognized.

While much of the work of a nonprofit doesn’t fall under the new ruling, some of it might, which is why you should pay attention to the changes and evaluate your revenues accordingly. Activities typical of a nonprofit that might be considered under the new ruling include membership fees, conferences and seminars, subscriptions, tuition, products and services, advertising, licensing, sponsorships, royalty agreements, and federal and state grants and contracts.

Nonprofits seeking to learn more about the law should sign up for the forthcoming seminar from Intacct: The Impacts of ASC 606 on Subscription Businesses. This webinar will take place on Thursday, November 3^rd at 11 a.m. PST/ 2 p.m. EST.

If you are currently using spreadsheets to manage your accounting, it will be almost impossible to comply with this law and IRFS 15 compliance, the effects of which will begin in December 2016.

The webinar is led by Tony Sondhi, a member of FASB’s Emerging Issues Task Force and an expert on revenue recognition. This is a unique opportunity not only to learn first-hand about 606 and IRFS 15 compliance but to learn from a well-known expert and member of the FASB task force.

At this seminar, you will learn more about the changes begun by these rulings, as well as information on how you can interpret and implement them for your organization. You will also learn more about the financial risks for subscription businesses. Many membership organizations rely upon a subscription model, which is directly impacted by these rulings.

According to the FASB document, “The core principle is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.”

The AICPA has put together a good paper that outlines the requirements and delineates the steps to take under each. There are five basic steps to comply with the new regulation:

Identify the contract with the customer.
Identify the performance obligation within the contract.
Determine the transaction price.
Allocate the transaction price.
Recognize the revenue when the entity satisfies the transaction.

Typically, step 5 occurs when goods or services are delivered satisfactorily to the customer.

The goal, of course, is to protect customers and to make it simpler and clearer for entities to recognize revenues. Many organizations are already using similar protocols, and for those organizations, making adjustments to satisfy the requirements should be simply. For others, it may take a deeper look at the way they are recognizing revenues, and shifting some of their processes.

Do You Need to Make Adjustments?

All nonprofits should assess their accounting practices and see how their revenue streams compare to the new rules. Organizations should also consider what, if any, impact this may have on their financial statements. It is a wise move as part of nonprofit financial management.

Keeping Abreast of FASB Changes

We have previously shared details of the proposed FASB changes taking effect in 2016. Any changes that impact your business should be noted and researched as soon as possible. Nonprofits, like other business entities, must comply with all requirements. Failing to do so can put your nonprofit at risk for losing its nonprofit status. You also risk falling behind in compliance issues, an important part of accurate nonprofit financial management.

More seminars are available to provide updates on various issues pertaining to accounting and nonprofit accounting and finance. You may view our complete list online.

Beck & Company

Beck & Company is an independent certified public accounting firm located in Washington, D.C. Founded in 1987, we specialize in the world of nonprofit institutions, helping them to navigate the complex world of finance and accounting. Our services are always personalized, and cost-effective for your institution. We welcome your inquiry or call. Contact us today or call 703-834-0776 x 8001.

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.

Training Your Team for Fund Accounting Systems: Tips for Successful Implementation

It’s go-time, and your staff is excited about the new fund accounting systems you’ve put into place. But wait: before launching the new system, have you made plans for training everyone on how to use the new fund accounting system?

Training, it seems, is often an afterthought when it comes to new software launches. Managers, IT staff, and everyone involved with selecting, implementing and using the new software should be involved in the training. Here’s how you can learn from adult educators on the best ways of engaging users in your new fund accounting system.

#1: Sell the value.

Even before you invite the team to a training meeting, you need to ‘sell’ them the value of the new software. Unlike children, who learn out of curiosity or obedience to authority, adults learn best when they perceive the personal value of anything they are expected to learn.

The staff of your organization must know right from the start why you’ve chosen the new software and why this particular product from among many fund accounting systems. How will it help them with their daily work? Will it solve problems, increase productivity, work smarter or faster than what they’ve used before? It’s only by answering these questions upfront will you grab their attention for further training.

#2: Keep training sessions focused on what users need to know.

Users need to know precise information to help them do their jobs well. They don’t need to know the history of the product, or the bells and whistles that so excited your CEO. They want to know now how to use it to do their jobs better. Focus your training on immediate activities the group can do to use the new software.

#3: Use it or lose it.

Another truism with adult learners is that they must use their newfound knowledge immediately or else it is forgotten. Adults need to use new skills repeatedly in order to keep them fresh. Schedule training sessions with the new fund accounting system where users actually bring in their projects and work so that the training can focus on job-related skills, and users can ask questions while actually using the system for real work.

#4: Customize vendor trainings.

Vendor trainings can be a great asset, but you may need to customize a vendor training session to your organization’s needs. You know your team. They may respond best to written materials, hands-on demonstrations, or simple verbal instructions. Work with your software vendor to tailor training needs to your team.

#5: Schedule follow up.

Many training programs fail because trainers pour information out and then leave without follow-up. Users leave the session invigorated and excited, but stumble using the new system when they return to their workplace. To keep the momentum going after training, schedule follow-up meetings a week or two after the initial training. Invite users to bring questions to the meeting so that you can help them use the system to its fullest.

Ready for New Fund Accounting Systems?

At Beck & Company, we understand the unique needs of the nonprofit sector. Our CPAs and consultants have been assisting nonprofits since 1987 with their accounting and operational needs. If it’s time to implement a new fund accounting system, please contact us for assistance. Call 1-703-834-0776.

Nonprofit Accounting Best Practices: Automating your Processes

We have come to our final blog in this series on nonprofit accounting best practices. Thus far, we have reviewed some key areas that we hope you’ll put into your plans as you prepare for future growth. This week’s focus is nothing short of critical to the flow and infrastructure health of your organization, automating your processes.

As nonprofits, we focus on expanding programs and services, reducing costs, increasing return on mission, and strengthening donor loyalty – all of which is good stewardship. That’s really what automation of processes is all about: doing more and creating greater impact with less.

We started this series talking about outcome measures. It’s pretty clear from funder prioritization and requirements that monitoring, measuring, and sharing key metrics are critical. But this requires efficiency and automation of processes. If you want to ensure high program efficiency metrics, you have to create the productivity savings, via automation, to reduce the proportional costs of overhead to program investment.

Here’s a specific example – let’s say you want to improve internal controls and reduce the inefficiencies of your manual purchasing system. By utilizing automated workflows in a best in class fund accounting solution, you will save time, paper, and frustration. Automated purchasing workflows will give you notification (on any device) that you have a pending electronic purchasing requisition or PO for approval. As you approve vendor payments, you can drill right into the original document to see the invoice. Payments are point and click. Reporting and visibility are instant.

Another example might be your audit. Is it taking too long and costing too much? In an automated environment, you can create a dashboard for your auditors that give them view only access to key reports and documents – right from their office. They can drill right into the source documents and you save travel, delays, and costs.

When you begin identifying your goals, priorities, and strategies, select some best practices to implement in your organization. It’s extremely helpful to define, track and measure results so that you can identify your savings and efficiency gains. Get familiar with the technology tools available to help you increase stewardship while decreasing costs.

Questions or comments regarding automating your processes? Please reach out to us. You can also follow us on Twitter (@BeckCPAs).

At Beck & Company we specialize in not-for-profit accounting and auditing. We understand the unique challenge of balancing the needs of your various stakeholders – contributors, members and your board, too. We have experience serving not-for-profit organizations such as unions, homeowner’s associations, religious organizations, charities, and social service organizations. If you have any questions regarding the filing of your form 990 we are here to help. Contact us today for more information.

Nonprofit Accounting Best Practices: Scaling for Growth and Impact

For several years now, we have seen the demands for nonprofit services increase rapidly, oftentimes exceeding capacity. Nonprofit organizations are focused on meeting the needs of their constituency while increasing impact. Some of the challenges get raised when organizations are planning to effectively scale for growth and impact. With the ever changing and growing needs, how are nonprofits adapting?

We’re seeing more mergers between nonprofits as well as new partnerships and collaborations. Some of these partnerships are with social enterprise organizations, some with other nonprofits, and others with community entities. With increased competition for funding and donors, nonprofits are learning to partner, narrow the focus of their mission, and adopt critical tools to ensure mission success and growth.

While growing to broaden the scope of your mission is a very good thing, it also brings new challenges. You have multiple funding streams, demand for deeper visibility, more grantor requirements, and increased compliance and reporting requirements. You may add new locations, programs or initiatives. It’s vital to plan for your growth and your expansion beyond the startup mode. Most nonprofit organizations start out utilizing small business tools to manage the organization. Once growth and expansion starts to kicks in, nonprofit orgs begin to experience the pains and limitations of ‘startup’ tools and resources.

In our last two posts, we shared information with you related to outcome measures and funding diversity. These two areas are critical as you plan and prepare for growth. Once you start tracking and measuring outcomes and increasing the diversity of your funding – you will quickly see the need for a best in class financial management solution – that will allow you to leverage modern technology to strengthen your visibility, transparency, automation, efficiency – and of course – your stewardship.

As your organization starts to thrive and grow, don’t think it will just happen on its own. Plan and build your strategy to accommodate the growth in a sustainable way. Nonprofits need the leverage and benefits that modern, best in class fund accounting affords. Whether through automation and visibility, or transparency and reporting – make sure that you equip your nonprofit with the tools that will allow it to thrive, grow, and maximize impact.

Questions or comments regarding scaling for impact and growth? Please reach out to us. You can also follow us on Twitter (@BeckCPAs). Check back next week for the final post in our series, where we will focus on automating your processes.

Nonprofit Accounting Best Practices: Fund Diversification

We are continuing on in our Nonprofit Accounting Best Practices series. As you prepare for the future, sustainable funding is a critical part of your plan. Some organizations get comfortable to the more traditional types of funding such as philanthropy which has proven to not be a sustainable method. Most growing nonprofit organizations need a true funding strategy that is wide in scope including sustainable forms of funding.

Whatever your current process is, you will probably be planning for expanded services. Most nonprofit organizations see an increase in the demand for services while facing increased competition for funding. In this environment, you need the support, credibility, and visibility with the community, funders, and constituents. Strong nonprofit accounting and financial management is key and includes performance and outcome reporting. You also need more to bring stability and sustainability – while allowing you to scale for growth. By diversifying your funding streams, you strengthen sustainability while expanding your influence and impact by partnering with new and diverse resources that you may not have considered previously. We are going to start with some basic information to help you get started and navigate the world of social finance. As with most things, balance is key to successfully diversifying your funding.

Social Finance is an approach to mobilizing private capital that delivers a social dividend and an economic return to achieve social and environmental goals. It creates opportunities for investors to finance projects that benefit society and for community organizations to access new sources of funds. Social finance is fairly broad in its definition, but we will give you a thumbnail of a few of the most interesting ‘instruments’ included in the social finance realm.

Impact Investments are investments made into companies, organizations, and funds – with the intention to generate measurable social and environmental impact alongside a financial return. Impact investments are made with an expected return of capital as well as a return on capital, and most importantly, a commitment to measure and report the social and environmental performance and progress of the underlying investments. Global Impact Investing Network says it well: “Impact investing has the potential to unlock significant sums of private investment capital to complement public resources and philanthropy in addressing pressing global challenges.”

Program Related Investments (PRI) are defined as investments made by foundations to support charitable activities that involve the potential return of capital within an established time frame. PRIs include financing methods commonly associated with banks or other private investors, such as loans, loan guarantees, linked deposits, and even equity investments in charitable organizations, or in commercial ventures for charitable purposes. For the recipient, the primary benefit of PRIs is access to capital at lower rates than may otherwise be available. For the funder, the principal benefit is that the repayment or return of equity can be recycled for another charitable purpose. PRIs are valued as a means of leveraging philanthropic dollars.

Social Enterprise’s standard definition is applying commercial strategies to maximize improvements in human and environmental well-being, rather than maximizing profits for external shareholders. Nonprofits are starting to leverage this strategy as they seek to create earned income to increase their sustainability and funding strength. NESC has published a great report on Social Enterprise’s Expanding Position in the Nonprofit Landscape. Social Enterprise activities offer nonprofit organizations the opportunity to generate earned income which in turn will provide consistent cash flow to further the mission of the organization. Social Enterprise activities can enhance the brand/reputation of the organization. A direct benefit of Social Enterprise activities for nonprofit organizations, can be the enhancement of management.

The world of social finance and funding is expanding at a fast pace. New funding resources are being developed often to help nonprofits ensure mission success. In the beginning stages of your funding and growth planning, be sure to seek out the best fit in the multitude of new funding opportunities, and incorporate it into your fiscal plan and performance goals. We also encourage you to remember to track and report your funding diversity as your donors and constituents need to be aware of this information.

Do you have questions? Please reach out to us. You can also follow us on Twitter (@BeckCPAs). Check back next week for the next post in our series, where we will focus on scaling for growth and impact.

Nonprofit Accounting Best Practices: Outcome Measures

We are launching a multi-blog series, Nonprofit Accounting Best Practices, that hones in on trends and best practices for strengthening the condition and sustainability of your nonprofit organization. To help simplify and focus your planning, we plan to cover the best practices for everything from outcome measures to competition for funding. We are starting with what we think is one of the most pressing topics, outcome measures. Be sure to check back the following weeks as we cover funding flexibility, scalability, and automation.

Measuring and reporting outcomes is a huge topic in the nonprofit sector. Donors and constituents are more engaged than ever, and they have higher expectations, increased awareness, and greater visibility. Add to that the significant number of for-profit professionals moving into the nonprofit world, bringing their best practices with them. So we find ourselves in a dynamic environment where we are expected to change, measure, adapt, and change again.

Let’s start by defining outcome measures. These metrics are powerful, essential tools for demonstrating accountability and transparency for an organization. Outcome measures provide a real time assessment of what the organization defines as success or expected performance. This insight and visibility allows proactive management that can help ensure program performance and mission success.

Outcome metrics come in a variety of forms. They may be activity-based programs that involve the amount of meals served, number of immunizations given, or the level of targeted reading level improvement. Outcome metrics can also be capacity based and measure overall progress or performance across an organization. This could be mapped through fundraising, memberships, volunteers, and event participation. The metrics can also be based on a mission’s long term success or expected lifetime impact.

Why are outcome measures so important?

Nonprofit organizations are experiencing more competition for funding than ever before. Donors and grantors have higher expectations. Often, gifts and grants come with stipulations for performance because the givers want to ensure that their dollars are getting the greatest possible return on investment. Government funding, as well, has strengthened compliance reporting and performance expectations. Implementing strategic outcome measures not only helps you meet compliance requirements, but also strengthens your reputation while assuring current and prospective donors that your organization is efficient, proactive, a good steward, and of course – able to do what you say you can do.

Your constituents, donors, volunteers, employees and community need to see success to support and sustain the vision and mission of your organization. Charity evaluators have embraced outcome reporting and will be rating nonprofits based not only on financial reporting and analysis, but also on their tracking and reporting of outcomes. This dramatically raises the standard for all nonprofit organizations. Outcome metrics are an enormous part of improving overall visibility and performance.

The key is not to get too overwhelmed with the details and start with the basics based on your vision and mission. Utilize external resources to get started quickly and easily. Consistent progress is what wins the day. Balance your approach with both program outcomes and financial/operational performance. While measuring and reporting outcomes may require extra effort now, the interest and engagement that this expectation brings is a great thing in the long term for the nonprofit community – as it will bring significant benefits to organizations, donors, constituents, and communities.

A little unsure of where and how to get started? There are many resources available; some of our recommendations are:

We also encourage you to attend an upcoming webinar, “Outcome Measures: Metrics that Matter for Nonprofits” to learn what is driving forward-thinking nonprofits to place a strong emphasis on outcome measures in 2016—and why they are using the Intacct cloud-based financial management solution to make it happen.

Have additional questions or comments regarding outcome metrics for nonprofits? Please reach out to us. You can also follow us on Twitter (@BeckCPAs). Check back next week for the next post in our series, where we will focus on funding diversity.

Should Board Members Answer Form 990 Questions?

The IRS does not require board review of Form 990 however, Part VI, Line 11a of the form asks, “Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing the form?” Further, Line 11b asks the organization to describe the process used to review the form, if there was one.

The information on the Form 990 helps board members understand the organization’s activities and the applicable tax laws, both of which are key to fulfilling their fiduciary duties. To help strengthen the board’s understanding of the organization, try asking them these 9 questions at your next meeting:

Was a complete copy of the Form 990 provided to all members of your governing body before filing the form?
Is the organization using a committee to assume responsibility for audit oversight, review, or compilation of its financial statements and selection of an independent accountant?
Does the organization have any amounts recorded on its financial statements for receivables from disqualified persons?
Did your organization provide a grant to an officer, director, trustee, key employee, substantial contributor?
Did the organization engage in a business transaction with a family member of a current or former officer, director, trustee, or key employee?
Did the organization hold assets in temporarily restricted endowments, permanent endowments, or quasi-endowments?
Did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country?
Did the organization make any significant changes to its governing documents during its most recent tax year?
Does the organization have a committee assuming responsibility for oversight of the audit?

It is vitally important for board members to be aware and well versed on the contents of form 990 before it is filed. The CPA needs to talk to the board and officers and help them understand Form 990, how to read it and what to look for. This education is critical for the board to properly fulfill its oversight role for Form 990. The CPA is uniquely qualified to provide this vital education. The CPA should provide this training to the board periodically or in orientation for new members.

The Form 990 is not a simple form completed with cutting and pasting. This tool provides an opportunity for the CPA to partner with clients and moving them to a stronger position, practicing the best methods throughout the organization. It also provides a way to think creatively and answer questions that help the organization tell its positive story to the world. Form 990 presents an opportunity for the CPA to add real value for clients and to be a true adviser—it is the CPA’s opportunity to shine.