karen – Beck & Company

An Update on 2013 Form 990

Last year, the Internal Revenue Service (IRS) revealed significant changes to the Form 990, resulting in wide-spread confusion among non-profit organizations regarding what they needed to include in the form. Over the past year, our certified public accountants have worked with a variety of non-profit and government organizations to ensure the proper disclosure of financial assets and information. We’ve worked particularly hard at demystifying Form 990 and helping organizations understand the purpose and significance of this form.

In March, the IRS announced more changes to Form 990 and 990-EZ to modify and clarify certain financial reporting requirements. While it may seem like significant changes have been made to the form, the majority of revisions and clarifications have been made to the instructions of the form (rather than the form itself). There aren’t any large-scale changes or additions to the information non-profits have to report on in Form 990. This is good news for non-profits who’ve just had to relearn Form 990!

In an effort to help you understand the changes made to the forms (and their related schedules and instructions), we’ve created a list of the most significant changes below. For a full list, view the changes on the IRS website.

The general instructions clarify that a short period return CANNOT be filed electronically unless the “initial return” or the “final return” box is selected in Item B. As a result, a short period return that results from a change in an organization’s accounting period MUST be paper-filed.
The instructions clarify the specific documentation needed to support a name change, termination, merger, dissolution or revocation of exemption. These documents must be attached to – and filed with – Form 990.
The instructions for Part VII Clarify that directors’ compensation for non-director independent contractor services to the organization and related organizations must be reported in Section A.
Appendix E to the Form 990 instructions has been updated to clarify that the public inspection and disclosure requirements apply to both the original returns and amended returns.

If you are confused about the changes to 2013 Form 990 or would like some assistance filling out the form, contact our CPAs today. Our tax services are designed to help you file all of your non-profit-related forms with peace of mind.

Cloud Computing and Accounting: What You Need to Know

Last month we introduced Cloud computing and how it differs from traditional on-premise solutions. Unlike on-premise software, Cloud computing requires no hardware and little to no maintenance, making it an ideal solution for companies and non-profit organizations who can’t afford to have a full-fledged IT department on staff. Now that you have a thorough understanding of what Cloud computing is, we’d like to discuss how businesses and non-profit organizations can use Cloud-based solutions to manage their accounting tasks.

Cloud Solutions are Rising in Popularity

Businesses and non-profits are constantly on-the-go and, in order to remain effective, need to have instant access to their operational and financial information. The progression of technology has made it possible for business executives and non-profit leaders to send emails from airport lines, check bank balances on mobile phones, and view reports on tablets and similar devices. As more and more organizations move to a more mobile framework, having access to your accounting software from any location at any time will be a key factor to your success.

Cloud computing is on the rise, as recent surveys have revealed. In fact, according to a recent study performed by IBM, 13% of organizations have successfully implemented Cloud technology and 21% are currently moving to the Cloud. The study also revealed that 90% of the companies and organizations surveyed are planning to use the Cloud in some capacity within the next few years. To say the Cloud is growing is an understatement; it truly is exploding onto the business and non-profit scene.

Benefits of Cloud Accounting Software
While it’s never a good idea to jump headfirst into technology trends, Cloud computing has made a name for itself as a reliable solution for both businesses and non-profit organizations. Before you decide if the Cloud is for you or not, however, you need to be aware of some of the key benefits, particularly related to accounting. Take a look at the benefits of pairing Cloud computing with your accounting software:

Instant access to important financial information and reports. With Cloud-based accounting software, you can access and edit your financial information from any location at any time. All you need is a connection to the internet. This allows you to have full visibility while you’re on the road or simply away from the office.
Improved performance. Cloud computing allows businesses and non-profit organizations to support the changing demands in financial strategy. Users can generate financial reports in real-time, providing them with enough information to suggest new approaches for improved performance.
Easily customizable. Cloud-based software is easy to customize, allowing you to build a solution to strategically meet your business or organization’s needs. Because Cloud-based accounting software is offered on a subscription-based model, it can be scaled down (or up) depending on your needs at the time. This makes the Cloud desirable for many non-profits and businesses.
Improve multi-company management. Many businesses have multiple entities, and it can become difficult to financially manage the entire business. With Cloud accounting software, you can access financial records from each company instantly. Users can hone in on information from a particular company or view it all simultaneously. With the Cloud, creating reports and reviewing information for multiple companies is a lot easier.
Reduced costs. Unlike on-premises accounting solutions, Cloud-based accounting software does not require any extra hardware. This helps companies and non-profits gain more control over their expenses and allows them to redirect their money to more important ventures, such as new programs or products.

If your business or non-profit organization is interested in Cloud computing, give us a call today. We offer a variety of technology consulting services to help you invest in technology that will truly make a difference. Stay tuned for more information about the Cloud and how it is impacting businesses and non-profits all around the world.

5 Small Business Bookkeeping Tips to Keep Your Records on Track

Today’s small businesses face unique challenges compared to their big business counterparts. Due to smaller staffs and limited financial resources, many small businesses struggle to maintain the day-to-day tasks associated with basic bookkeeping and financial management. With a little effort and education, however, small businesses can begin to excel at financial management and bring some organization back to their accounting books. In our work with small businesses in the Washington D.C. and Virginia area, we’ve uncovered the most common small business bookkeeping mistakes. The following tips are designed to help you fix these simple bookkeeping errors and get your accounting back on track:

Maintain daily accounting records to improve accounting accuracy. Accounting shouldn’t be a once-a-week activity. To gain a true understanding of your business’ finances and to ensure financial reporting accuracy, you need to be maintaining daily records of your business’ finances. With the right accounting system in place, this doesn’t have to consume too much of your time. In fact, simply devoting 10 to 20 minutes a day to basic bookkeeping tasks can do wonders for your business.
Use the right accounting system for your business. No accounting software is perfect for every business; that’s why we suggest exploring your options and choosing the software that works best for you. Specialized small business accounting software, such as Sage MIP Fund Accounting or Blackbaud, can help you streamline your accounting processes; however, basic accounting systems such as Quickbooks can be equally effective. Take the time to determine your needs in an accounting solution and choose the most cost-effective solution to fit your needs.
Review bank statements on a monthly basis. Most banks provide bank statements with a month-end cutoff, making it easy to gain a complete month-to-month view of your business spending. Synchronizing your bank statement with other monthly records will make it easier to reconcile your statement and keep a close eye on business expenses.
Implement a detailed check handling policy. Checks should be handled with the same amount of care and attention to detail as cash. Don’t toss canceled checks in a drawer and forget about them – dispose of them correctly. Canceled checks are as good as cash, and if something goes wrong, your business, not the bank, is responsible. Make sure you review all canceled checks before anyone else in your business (including your accountant and employees) sees them. This will help you catch unauthorized checks and prevent fraud from occurring.When signing checks, be sure to sign them with a distinctive signature that would be difficult to forge. If you are a partnership, consider having at least one partner co-sign all of the checks for added protection and accountability.
Create an audit trail. Effective small business bookkeeping requires you to be able to quickly and easily retrace your business’ financial activities. Most current accounting systems have audit trail capabilities, but if your accounting software does not, you may want to consider investing in a solution that does. In addition to maintaining an audit trail in the accounting software itself, make sure all of your financial files are organized. Keeping your invoices and checks in numeric order and not skipping invoice or check numbers can help you keep track of your finances, as can maintaining separate bank accounts for business and personal use. Chances are, if you can’t go back a year or two and reconstruct your business’ finances, your audit trail is not effective.

Stay tuned to our blog for additional small business bookkeeping tips. If you could use some help organizing your accounting books, give us a call today. We offer a variety of small business accounting services to help you create clear and accurate financial records.

Internal Controls for Businesses and Non-profits, Part 2

As we discussed last week, establishing and maintaining strong internal controls is important for any business or non-profit organization. In order to effectively reduce the risk of fraud and internal theft, you need to implement internal controls in every area of your organization, including management and your accounting system. In this article, we’ll be discussing key internal controls your business and non-profit organization should consider implementing on each level, as well as highlight some important methods of strengthening security throughout your entire organization.

Internal Controls on a Management Level
While accounting and financial management may not be your area of expertise, you still need to play an active role in the process. Having a clear understanding of the accounting process and what is occurring with your finances is always a smart idea. Too often we hear of business managers and non-profit leaders putting too much trust in their employees and taking a hands-off approach to bookkeeping. While it’s good to trust your staff, you can never be too trusting (as recent fraud statistics have shown). By taking the following simple steps, you can reduce the risk of fraud and create a culture of responsibility among your management team:

Take an interest in the books. Make it a point to review financial reports periodically and ask questions about any discrepancies you may see. If you don’t understand financial reports or need help identifying key figures, seek the help of a certified public accountant. They can train you on everything you need to know about creating and reading these reports, as well as help you understand how this information impacts the everyday operations of your business or organization.
Create an ethics policy. If you want to set your employees up for success, make sure they have a clear understanding of what you will and will not tolerate as an organization. Create a written policy that outlines your policy for ethics and business integrity and ensure that all of your employees sign it. Perform an annual review of this policy to adjust for changes in the work environment.
Check in on your employees regularly. The most successful business managers and non-profit leaders have established a clear presence among their teams. Employees who know they are being constantly checked in on are less likely to engage in fraud and theft. By establishing a culture of oversight and review, you are protecting your business or organization from substantial losses.
Perform random reviews of important reports and financial documents. While it’s always a good idea to review financial reports on a monthly basis, management should also choose other reports to spot check. Since your employees won’t be able to predict what you’re looking at, you will have a more honest assessment and be able to identify fraud quickly and easily.

Internal Controls in Your Accounting System

Limiting who has access to your accounting system is the first step you should take when implementing internal controls in the accounting process. Many software systems will even allow you to limit users’ access to certain areas of the system so you can more effectively manage who has full access to your financial information. Assign software rights according to each employee’s responsibilities. For example, if a particular employee is in charge of Accounts Payable, they should not have access to Accounts Receivable or be able to balance the bank statement. Clearly defined roles protects your assets and encourages accountability among your staff.

Here are a few more internal controls to consider implementing:

Perform regular backups of your financial accounting database
Hire an outside CPA to review your books on a periodic basis
Set up an audit trail in your accounting software system
Password protect all financially-sensitive documents
Create a separate sign-on for each user of the system

Internal Controls for Financial Management

Protecting your finances should be your number one priority as a business or non-profit. Keep these methods of strengthening your financial security in mind as you reevaluate your current internal controls:

Create a deposit slip for any cash or checks that come through the door. This could include creating a separate log for all cash and check receipts that is then passed on to the bookkeeper and business owner. Once deposits have been made, the owner can then compare the receipts log to the bank deposits.
Create an approved vendor list and a vendor approval policy. Each vendor must be approved prior to any business being done with that vendor.
Check preparers should be different than the people signing the checks.
Consider having two people sign all checks over a certain threshold.
Avoid issuing emergency checks whenever possible.
Create a policy for submitting employee reimbursements and make sure all employees follow the same policy.
Require receipts for all credit and debit transactions.
Maintain separate cards for different users for accountability.
Reconcile bank accounts and credit card statements monthly.
Monitor online banking activity on a monthly basis.
Require documentation for any payroll changes.
Implement a timesheet approval process before payroll can be completed.

If your business managers or non-profit leaders are not committed to following through on established internal controls, your employees won’t be either. Your management team should be setting an example for the whole organization to follow. For additional methods of strengthening your business and non-profit security, give us a call today. Our certified public accountants would be more than happy to perform a financial management review and help you create more effective accounting processes and stronger internal controls.

Educating Your Board about Nonprofit Financials

As many nonprofits have discovered through experience, not all of your board members are going to understand your nonprofit financial reports and explanations. While many of your board members will come to you with substantial financial experience and understanding, some members of the board will not be as well-versed in reading nonprofit financial reports and understanding financial terms. As a leader in your nonprofit organization, it is your job to ensure that the board understands what is being presented. After all, without financial knowledge specific to nonprofits, your board has no way of understanding the financial implications of their strategic decisions. Arming them with the knowledge they need will not only improve your financial presentations, but it will also help your board make better decisions for the organization.

We’ve created a few strategies to help you educate your board on understanding your nonprofit’s financials. Keep the following in mind as you prepare your board for financial presentations:

Determine what your board needs to know. Don’t overwhelm your board members with useless information they don’t really need. Focus on the specifics related to the type of organization you’re running and instruct them on everything they need to know to uphold their fiduciary responsibilities.
Start with the basics. Once you’ve identified what your board needs to understand to be successful, it’s time to start educating them on the basics. Make sure all board members understand the purpose behind (and can read) the statement of financial position, statement of activities, and statement of cash flows. Your board will need to understand each of these statements, be able to link them together, and find the answers to their financial questions. Keep the format of these reports consistent so as not to confuse your board.
Make sure they understand accrual accounting. Your board members need to understand the basics of accrual accounting and be able to understand terms such as “deferred revenue” and “prepaid expense”. This may take some time to explain, but we promise it’s worth the effort in the end. It will save time and efficiency at meetings, as you won’t have to partake in lengthy discussions clearing up accounting questions and can focus your efforts on solving the real financial issues.
Use your financial presentations as a teaching experience. If you can, carve out 10 – 20 minutes to go over specific accounting items with your board members during the meeting. Create a set plan of topics you’d like to cover across the year and work them into your financial presentations and meetings. You’d be surprised by how much you can cover in a year.
Send board materials and preparatory items prior to the meeting. Don’t expect your board members to learn everything on the spot; give them time to review concepts before the meeting so you have more time for valuable discussion.
Use visuals in your presentations. As the saying goes, a picture speaks a thousand words. Demonstrate key financial concepts using graphs and charts. Present financial data in graph and chart form as well. This will not only help keep the board interested in your presentation, but it will also help them retain what they are learning.
Bring in an accountant or financial consultant. Have your accountant or financial consultant drop in periodically to clarify the concepts you have been teaching.
Make the information relatable. Find a way to make the information you are presenting relatable to your board members. For example, if one of your members is a corporate businessman, discuss how to calculate the return on investment (ROI) of a new program. If your financial information cannot be easily related to the people making the decisions, the decisions won’t be quality.

Not all of your board members will be financial experts, but you can help them understand the basics so they make effective decisions for the organization. Your board members have a fiduciary responsibility, and it’s important to help them remember that. If you could use some help explaining nonprofit accounting basics to your board members, we can help! Check out our nonprofit accounting services to see how we can help you.

Internal Controls for Businesses and Non-profits, Part 1

Businesses and non-profit organizations face challenges every day that threaten their business longevity and effectiveness. These threats can take a variety of forms, including competition in the industry, rising costs of goods, changes in economic conditions, and human resource challenges. While all of these challenges pose a significant threat to businesses and non-profits, the greatest challenge for many of today’s businesses takes the form of fraud.

Fraud occurs more than you think, and it often goes unnoticed until it’s too late. Fraud can come in a variety of forms, including check fraud, credit card fraud, and employee theft (the most common types including check tampering and billing schemes). Stealing inventory, claiming undue overtime, setting up payments to fictitious vendors, skimming cash, and embellishing an expense account are all fraudulent activities that can occur within a company or organization. These activities threaten the stability of the business and can result in significant financial loss. In fact, according to the Association of Fraud Examiners (ACFE), the typical business loses an average of 7% of revenues due to employee theft alone. For smaller businesses and organizations, the percentage rises to 38% with a median loss of $200,000.

In order to protect your assets, you need to have strong internal controls in place, and your employees need to be aware of your organization’s policies and procedures. Failure to communicate your security procedures and policies with your employees only serves to put your business or organization at risk. It does no good to have strong internal controls if your employees aren’t using them.

Consider the reasons you may want to create strong internal controls:

Internal controls can solve current business problems and help prevent fraud from occurring.
Businesses with strong internal controls in place have the potential to go public.
If you are working with a Sarbanes-Oxley (SOX) compliant customer, you may be required to show proof of strong internal controls.
Strong internal controls improve financial reporting accuracy and ensure assurance that your financial statements are correct.
Future investors, bankers, and accountants will want to see how you are protecting your financial assets.

Strong internal controls are essential no matter how small or large your company or organization. Just as you wouldn’t leave money lying out in the open for anyone to take, you shouldn’t leave your financial information open for all to see. Creating procedures and policies detailing employee responsibilities and tasks is a step in the right direction when it comes to safeguarding your assets. If you could use some help establishing internal controls in your business or non-profit organization, give us a call today. We offer a variety of client accounting services to help you with all of your financial reporting and management needs.

Stay tuned to our blog for Part 2 of our internal controls article series to learn how you can start implementing internal controls and discover top methods for strengthening your overall business and non-profit security.

Top Cloud Computing Trends of 2014

Today’s businesses rely on technology to function and succeed in the marketplace. Recent advances in technology have enabled businesses to automate manual processes, streamline tasks, and gain instant access to company information and data. Not all technology trends stick around, and businesses have to weigh the costs of jumping on the bandwagon of new trends. Some trends, however, have staying power and the potential to completely transform the way companies do business.

Cloud computing is one of these trends. Many years in the making, Cloud computing has emerged as the leading technology trend for 2014. Although it’s grown significantly in recent years, experts predict the Cloud to become even more popular among businesses and nonprofit organizations alike. This is due in part to the assurance of the Cloud’s security, as well as to the rise of interest in mobile technology. Take a look at some of the top Cloud computing trends for 2014:

More and more businesses will move to a hybrid Cloud
Hybrid clouds offer the security of a private Cloud with the scalability of public Cloud services. Many businesses are moving to a hybrid model, and experts predict this trend to continue as the year progresses. For companies looking for a safe and affordable infrastructure, the hybrid Cloud is the way to go.
Disaster recovery services will fully move to the Cloud
Cloud-based disaster recovery services are not only expected to rise this year, but experts also predict current disaster recovery service users to move their data completely onto the Cloud. In the past, many companies have used these services as a backup; however, as they have proven to be reliable, companies are starting to use them as their sole disaster recovery plan.
Businesses will shift from the public Cloud to a private Cloud
Due to security concerns and control issues, many businesses will make the move from a public Cloud to a private Cloud.
Platform-as-a-Service (PaaS) is expected to grow
Once the cloud infrastructure is further diversified and more applications are perfected, experts predict there to be an increase in the number of businesses moving to PaaS. Complex web and mobile apps will become the norm, and more companies will choose custom PaaS solutions designed with their specific industry in mind.
Web-powered apps will emerge as a key business tool
Mobile and web-powered apps provide businesses with a level of efficiency and scalability they have never before experienced. Experts predict web-powered apps to be further developed this year with key features such as platform independence.

These Cloud computing trends are expected to impact businesses all around the world. Have you adopted any of the above trends into your technology practices? Are you using the Cloud to store data or access software? If so, leave us a comment and let us know how the Cloud has impacted your business. We’d love to hear from you!

Nonprofit Accounting: The Elements of an Effective Financial Report

As we discussed last week, nonprofit organizations are required to present financial information to their board on a regular basis (usually monthly). Clear and effective financial reporting to the board of directors is necessary for good financial management and accountability; however, many organizations do not understand the elements that make up an effective financial report. The information within your financial reports should be relevant, understandable, reliable, and useful. If your reports are not these things, it’s time to sit down and revisit your nonprofit’s financial reporting methods.

Take a closer look at the four characteristics of effective financial reports and see for yourself if your reports are making the cut:

The information contained in your financial reports must be relevant.
The finance committee and board of directors will determine what information is needed to monitor the organization’s financial progress. Your reports should include the financial position of your organization (assets and liabilities), key statistical data to help board members determine the financial outlook of the organization, and a summary of operations (revenue received and expenses incurred). At a minimum, your financial reports should contain the following:
- Salary and benefits expenses
- Food costs (if substantial)
- Revenue from grants, fees, etc.
- Month-end summary of significant assets, including accounts receivable, accounts payable, grants not yet paid out, and cash

It would also be useful to present a comparison of your actuals versus the budgeted results. These comparisons aid the board in determining whether or not financial policies are being followed and if action needs to be taken. This analysis is most useful when provided with detailed notes explaining any significant variances.

The board must understand the information being presented in the report.
Your financial reports need to be easily read by all of your board members, so make sure they are understandable. Remember, the members of your board have varying levels of financial experience so don’t inundate them with unnecessary information. Find out what they prefer and deliver it. Some boards want a detailed account while others prefer a one page summary. Determine your strategy for creating the reports your board wants and stick with it.
The financial information must be reliable and accurate.
Financial reports are only useful if they are reliable. Double check your data to ensure its accuracy and reconcile your bank statements to your accounting records on a monthly basis.
The information contained in your reports must be timely.
Delivering effective financial reports is all about the timing. Reporting the results of your operations and financial position in a timely manner is crucial if the board wishes to take corrective action.

Overall, creating effective financial reports for your board is not difficult. It just takes a lot of time and attention to detail. By properly maintaining your accounting records throughout the month, you can ensure that the information in your reports is reliable and accurate. Contact us today if you need help maintaining or cleaning up your accounting records. We offer a variety of accounting services designed to help you succeed in your financial reporting efforts.

What’s the Difference between Cloud and On Premise?

As we discussed a few weeks ago, many nonprofit organizations and businesses are looking to move their accounting software to the Cloud. As an accounting and CPA firm, we work with a variety of clients who use a variety of accounting solutions to manage their business or nonprofit. While we don’t think Cloud computing is for everyone, Cloud-based software can certainly benefit many businesses and organizations. Before our clients make a decision, we encourage them to look closely at the features of Cloud computing versus traditional solutions. This will give them a realistic view of the Cloud and help them determine if it is the right fit for their particular technology needs and wants.

There is a stark difference between Cloud computing and on premise solutions: Cloud solutions are provided as a service and can be accessed using an Internet connection while on premise solutions are installed locally on your company’s hardware and servers. The differences, however, do not end there. To help you better understand the differences between Cloud computing and on premise solutions, we’ve provided a list of the key differences between Cloud and on premise solutions. Use the comparisons below to help guide you to the right decision:

Access
Cloud computing: Can be accessed using the Internet or any mobile device (smartphone, tablet, etc.)

On premise: Can only be accessed on company computers (or through remote assistance)

Cost
Cloud computing: Subscription based, pay-as-you-go model (usually in the form of a monthly fee – low initial cost

On premise: Majority of the cost is paid up-front in software/hardware, training, implementation, and IT support costs

Security
Cloud computing: Software and data are managed in the Cloud by the Cloud provider

On premise: All data and software is managed on-site by your business or organization

Hardware Requirements
Cloud computing: No additional hardware is needed – only an Internet connection

On premise: Hardware and servers required to run the software

Upgrades/Maintenance
Cloud computing: Handled by the Cloud provider

On premise: Managed by your IT staff

Deployment Time
Cloud computing: Can be deployed more quickly than on premise solutions (still requires extensive planning and time)

On premise: Implementation and deployment requires an extensive amount of time and planning

Customization
Cloud computing: Software is customizable – all customizations carried forward when software is upgraded

On premise: Software is customizable, but customizations are tied to your current deployment and must be revisited during upgrades

Mobile Options
Cloud computing: Users can access software on their mobile devices using apps, mobile browsers, etc.

On premise: Users can only access software through the web browsers on mobile devices

Moving to the Cloud is a major decision, and it’s not the right choice for everyone. If you are questioning whether Cloud computing is for you, give us a call today. We offer technology consulting services to help businesses and nonprofits just like you determine what the best technology investment is for your company or organization.

The Top Internal Controls for Smaller 501(c)3 Organizations

Protecting your data, information, and financials should be your top priority as a 503 (c) organization. Raising funds and winning grants is not an easy process, and you should be doing everything you can to safeguard your funds and financial information. Misuse, fraud, theft, and embezzlement are common occurrences, and if you don’t have the proper policies and procedures in place to protect your financials, you could put your organization at great risk. Smaller 501(c)3 organizations in particular have a difficult time maintaining the proper controls to protect their organization. Because their staff is limited (some organizations have fewer than 3 staff members) and their time is precious, many smaller organizations have difficulty segregating duties and implementing a system of checks and balances. Even if they don’t have the staff to maintain the same internal controls as larger organizations, smaller organizations can implement a few key controls to ensure that their financials are protected.

We’ve created a list of the top internal controls small 501(c)3 organizations should implement in order to properly protect their funds and financial information. Keep the following in mind as you begin to create your financial policies and procedures:

First and foremost, make sure your entire staff is aware of the policies and procedures you have in place. Everyone should be expected to follow these policies; there should be no exceptions. Excluding even the top person can set a negative (and even unethical) tone among your staff and lead to your staff ignoring procedures and cutting corners.
Implement physical controls. Lock up your files, password-protect your computers, and always keep checks in locked drawers. Simple security measures with your physical assets can go a long way in protecting your organization.
Clearly define the roles and responsibilities of everyone in your organization. Roles and responsibilities need to be written down even in small organizations. Determine who is responsible for what and make sure every staff member is aware of their duties. Failure to do so can cause things to slip through the cracks and place your organization at risk.
Reconcile your bank statements. This may seem obvious, but it needs to be said. Reconciling your bank statements is crucial to protecting your financials. If you reconcile your bank statements regularly, embezzlement can’t – and won’t – go on for very long. We recommend someone other than the bookkeeper (or whomever handles the money) reconciles the bank account; however, some smaller 501(c)3 organizations do not have a bookkeeper or only have one person who does everything. In this case, we would recommend having a board member (or someone else in a similar role) receive and review the bank statements before handing it over to the staff.
Always have two people present when counting cash. Cash handling is extremely risky, and you need to implement strong policies and procedures for dealing with cash. Hold your staff accountable with all cash that flows through the organization.

While these internal controls cannot help your organization raise more funds or win more grants, they can ensure that you keep your hard-earned (or hard-won) money. If your 501(c)3 organization has any questions regarding setting internal controls or accounting in general, give us a call today. We offer a variety of services designed to help you run a successful and effective 501(c)3 organization.