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When is TotalAccounting a Smart Move for Nonprofits?

Not all organizations feel comfortable utilizing a third party accounting expert. Understandably, some executives desire to maintain these processes in-house. However, there are many benefits to outsourcing the day-to-day accounting operations of your organization. Ask yourself the following questions to see if TotalAccounting may be the right next step for you.

Do you struggle to raise funds?
Is operating on a leaner budget a dream and not a reality?
Does your organization need a better way to keep costs down?
Is the right person performing each accounting processes?

Now that you have determined your need to explore outsourced accounting let’s take a look at some examples of how something like TotalAccounting is an efficient and wise solution for you:

Utilizing a third party accounting solution allows you to work with highly educated, accounting experts without having to hire a full time accounting staff. Staffing high level experts in this field is expensive and may not be the best decision for your staffing budget at this time.
Additionally you are able to utilize this expertise on an as needed basis. Everything from accounts payable, to audit oversight, to CFO level expertise is available at any time.
The financial reports you can receive from your outsourced team will provide valuable business intelligence to help you make the best possible decisions for your organization.
A third party team can add to your internal controls, creating accountability and transparency with financial operations.
With tax laws and regulations constantly changing, an outsourced team will help to ensure you are operating within compliance of laws and regulations.
A TotalAccounting partner can present recommendations on best practices so your organization can run at optimum efficiency and effectiveness.
Save money on technology. Utilizing an outsourced accounting team means you don’t have to invest in expensive software programs and maintenance.
Save time and money on staffing. An outsourced accounting team means you won’t have to hire, train, fire, or manage an accounting department.
When it comes time for the annual audit, your outsourced team will save you countless hours and headache’s as they will be fully ready for the audit process.
Think of it like a buffet; you can pick and choose the tasks you would like to have your third party accounting team work on. Leave the rest on the table for another time.
As your organization grows you can scale the services you are outsourcing according to your growth. This means your accounting team can grow with you at a minimal cost of time and money to your organization.

Here at Beck & Company, Certified CPA our TotalAccounting service team can help you reduce your back-office overhead and improve your processes so you can spend more time focused on your cause. We have a broad base of managerial accounting and systems experience and a deep understanding of nonprofit process and technology that enables us to apply knowledge from the past, together with up-to-date best practice know-how to help you solve your challenges and capitalize on the opportunities you face. We partner with you in each of your engagements, getting to know you and your unique challenges and objectives intimately. This combination enables us to develop tailored solutions to increase your effectiveness and help you achieve the goals of your mission. Contact us to today to learn more about TotalAccounting and begin partnering with us today.

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.

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.

Is Your Nonprofit Prepared for Growth?

Over the past few years, nonprofit services have experienced increased demand. Demand that at times, exceeds the capacity of the organization. Of course, nonprofits desire to effectively meet the needs of their constituents and continue to have a significant impact. The problem is keeping up with the demand and planning for future growth.

One of the ways nonprofits are scaling for growth is through partnership and collaborations. The increased demand, which has sprouted more NPO’s, creates increased competition for donors and grants. This then requires nonprofits to become clear on their mission and create tools to see them to their desired success.

Growing organizations of any kind is a marker of organizational health. Growth = Good. However, growth also brings with it, its own set of unique challenges. Challenges that not all nonprofit organizations are ready to face. For instance, increased grantor requirements, funding from multiple sources, a desire to see deeper into organization financials, in addition to more complicated reporting and compliance. In order to optimize successful future growth, your organization should have a plan which anticipates these changes and how you are going to deal with them. Perhaps your nonprofit will add programs, services, or locations. How will you continue to keep accurate records, updated budgets, and most importantly, maintain missional focus? While your company may have been established using a small business model – that same model may not continue to serve you well as you expand.

It is likely that in order to support your growth you will need to diversify your funding. Obtaining funding will require outcome measures and a clear understanding of your key performance indicators. The ability to track your financials becomes even more important to donors and constituents who are supporting your organization. Inevitably a growing nonprofit will reach a point where they require a financial management solution that utilizes modern technology to organize and maintain accurate records.

Intacct’s Cloud-based ERP software is specifically designed to provide you with the control you need to simplify your financials so you can determine where – and how – to allocate your resources and time. Built in the Cloud environment, Intacct provides organizations with true business visibility and flexibility so they always are in the know. Designed to automate your organization’s financial processes and transform your financial department into one that strategically drives your company toward growth, Intacct has been voted one of the best-in-class financial ERP solutions on the market today.

At Beck & Company, Certified Public Accountants and Business Advisors, we are an accounting and consulting firm delivering specialized expertise, creative thinking, and unsurpassed service to ensure that our clients’ financial endeavors flourish. Specifically, we offer nonprofit services such as CFO, Controllership, and Accounting services. Contact us to see how we can help your organization flourish.

Accomplishing your Goals with Automation Best Practices

Nonprofit organizations are generally focused on bettering their programs and services, increasing efficiency, decreasing costs, strengthening donor loyalty, and pursuing their overall mission. All of which are good and show wise stewardship within the organization. One way to ensure you are maximizing these efforts is through the automation of processes. Ultimately – through automation, accomplishing more with less; leading to greater impact of your nonprofit.

One of the ways to accomplish this, as we’ve talked about before, is through outcome measures. As your organization seeks to find financial support in today’s increasingly competitive environment, having an accurate display of your financial outcomes can play a key factor in winning grants and donations. Providing these reports, efficiently and accurately requires automation of processes. Through automation your organization can increase productivity and reduce overhead costs.

Automation through an enterprise resource planning (ERP) solution such as Intact ERP Software, can help by automating processes, improving oversight and controls and increasing accuracy and compliance. This will lead to your finance department running more efficiently, while allowing other departments within the organization to use the best tools for their part of the job.

In addition, automation can drive performance and growth. For instance, financial managers are expected to provide information – valuable information – to run their business better. Through automation you can easily dig deeper into your organizations financials in order to understand the true dynamics of your business. This provides visibility into both your financial and operating data so you make better long-term and more strategic decisions.

Another thing to consider is the time you are spending on your annual audit. Are you losing out on valuable time manually searching for information and compiling reports? In an automated environment, you can provide your audit team with access to reports and documentation which allows them to view the information needed to analyze your financials.

Keep these best practices in mind as you delve into 2016. Here at Beck & Co CPA’s we are committed to helping our customers achieve success. We want to help you increase efficiency, decrease costs, strengthen donor loyalty, and pursue your overall mission. Contact us to learn more about our services and solutions.

Hints and Questions to Consider when Choosing a Tax Advisor

Finding the right tax advisor can have a significant impact on your organization. Working with the wrong advisor can lead to a litany of issues and hassles, resulting in additional work and unnecessary headache for your board of directors. However, finding a tax advisor that is the right fit for your organization can save you time, and ultimately – money.

Here at Beck and Company Certified Public Accountants and Business Advisors we are experienced and qualified to help your organization with their tax preparation and can offer further advice on securing a tax advisor as well. Learn more about our tax service offerings here.

Whether you choose a Beck and Company CPA or someone else to serve as your tax advisor, keep the following hints in mind when choosing the right tax preparer or advisor to do your taxes. Finding an advisor who is truly committed to your business success is absolutely paramount. Selecting the right advisor should be a process not unlike selecting a full-time employee who’s the right fit for your organization. These hints are intended to help you to secure the right person with the right intentions which will ultimately save you from major headaches down the road. With that in mind, consider the following:

Helpful Hints When Choosing a Tax Preparer/ Advisor

Use a reputable tax professional who signs the tax return and provides a copy.
Consider whether the individual or firm will be around to answer questions about the preparation of the tax return months, or even years, after the return has been filed.
Check the person’s credentials. Only attorneys, CPAs, and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection, and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.
Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and resources that also holds them to a code of ethics.
Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.

Don’t rely on these hints alone, you will also want to be sure to interact with and communicate with three or four options in tax advisors before making a final decision. When you interview, consider the following questions to ask. Their answers will offer guidance and insight into your ultimate tax advisor selection. In addition to these guiding questions that are found below, a few key qualities you should discuss during an interview are availability, qualifications and experience, client longevity, and price.

Questions to Ask when Choosing a Tax Advisor

What is the candidate’s educational background? Do they have an advanced degree?
What qualifications does the candidate have?
Do they have expertise in areas relevant to your organization?
How long has the candidate been doing tax advising?
Do they have any licenses? If so, which licenses do they have?
Will he or she provide at least three references of current clients?
Have they been cited by any professional or regulatory body for disciplinary reasons?
How and what do they charge? What fees will they charge?
Do they provide ongoing reviews and planning strategies for you?
Will they represent you if you are audited?
Are you comfortable with your prospective accountant/ tax advisor?

There is not a one-size fits all answer to the above questions. Rather, there will be a right answer for your unique situation and needs. The best advice we can offer is to be diligent about doing your research. This will provide you with the information you need to make an educated decision when it comes to choosing a tax advisor. For more information about the process or to find a tax advisor for your organization, contact us here at Beck and Company CPAs.

Preparing Your Nonprofit for Tax Season

The onset of Tax Season often creates stress and worry, particularly for nonprofit board members and responsible parties. The gathering of documentation, sorting through expenses and receipts, understanding tax laws and changes, etc. are reason enough for this anxiety. Particularly if there is disorganization or lackluster record keeping.

We understand that filing and preparing to file taxes can be challenging; that is why we’ve provided several tips to ease the burden of tax preparation and ensure that you make the April 15th deadline. Keep the following in mind as you prepare for tax season (and remember to practice your deep breathing):

Always separate personal and organizational expenses.
The Internal Revenue Service (IRS) keeps a close eye on personal expenses that could be claimed as organization expenses (such as using a vehicle for personal reasons). Protect yourself by maintaining separate bank accounts and credit cards for your expenses. Maintain good records to back up your claims. If the IRS does inquire about a particular expense, you will have the information you need to substantiate your claims.

Maintain good financial records year-round and research available deductions.
Proper record-keeping is crucial to ensuring that your taxes are filed accurately. Be diligent about maintaining your records all year so when it comes tax time, you have everything you need to file confidently. Make sure to save all essential paperwork that may be needed to back up deduction claims in the event of an audit. Remember that tax credits and deductions change each year, so be sure to stay up to date on the latest information.

Take advantage of the tax credits within the Affordable Care Act.
According to the Council of Nonprofits, your nonprofit organizations may be able to take advantage of the same tax credits as small business. This credit will cover up to 50% of the health premiums you pay to cover your employees.

Avoid common audit traps.
It’s important to know the red flags that may capture the IRS’ attention. The IRS commonly targets certain types of nonprofits for special scrutiny. In the past, these have included:

nonprofits that conduct gambling fundraisers
nonprofits engaged in joint ventures with for-profit companies
nonprofits that sponsor travel tours
credit counseling agencies
donor advised funds
hospitals
colleges and universities
community foundations
nonprofits engaging in political activities
student loan organizations, and
nonprofits that fail to file required IRS returns.

If your organization falls under one of these categories you will want to make sure that you have the evidence to back up your claims.

Here at Beck & Co. we understand that preparing your taxes can be daunting and overwhelming. In fact At Beck & Company we specialize in nonprofit accounting and auditing. If your organization could use some guidance in this area, let us help. We have a team of experienced accountants and CPA’s that can assist you in making sense of tax regulations and avoid common mistakes and audit traps. Contact us to learn more about these services and how we might be able to help.

Finish the Year Off Well with this EOY Checklist

2016 is quickly approaching which may have you feeling a little stressed about closing out the year. Understandably, the holiday season can interrupt workflow and make it difficult to fully focus on year end tasks. In order to simplify the process we have provided you with a year-end check list to ensure you begin 2016 on the right track.

Print yearly reports– From financial and general ledgers to payroll and accounts receivable/accounts payable, we recommend that you print these reports for financial reporting reasons. You will want to have a hard copy of your historical company information, especially if you get audited.
Print and finalize payroll forms- Tax returns should be filed and completed for the year that you are closing.
Back up all company data- You can save the backup on a CD or flash drive. Save the backup with a name you will recognize in the future. We recommend that you include the words “Year-end” and the year you are closing in the file name. Both the paper documents you printed and this electronic data backup are essential for future reference and future audits.
Plan strategically- The end of the year is a natural time to start re-evaluating your financial processes, procedures, and goals. Focus your efforts on maximizing your impact in the next year while minimizing your expenses.
Import your current budget, analyze it, and create a new one- Learn from this year’s mistakes and create an effective budget for the year to come.
Evaluate your financial records- While it is important to straighten out your financial records due to legalities, it is also important for properly managing your organization. Inaccurate financial records often results in poor decision making and missed opportunities, not to mention trouble from the government.
Update donor records- Make sure that your donor records are in order by the year-end because donors will be expecting their annual contribution statements at the beginning of the year.
Hold an end-of-year meeting- Have a year-end meeting to discuss the challenges of the past year and focus on the necessary improvements for the year to come. Prepare for your end-of-year meeting by creating the necessary financial reports.
Finalize payrolls- Make sure everything is in order to ensure your employees receive their W2s in a timely manner.

Here at Beck & Company we are here to help you in any way that we can. Contact us to see how we might be able to assist your nonprofit organization in finishing off the year well.

Anti-fraud Measures for Nonprofits

Unfortunately, no company, regardless of their mission is completely immune from the possibility of fraudulent activities. Fraud can take on a vast variety of shapes and sizes and is particularly rampant in today’s society. When fraud occurs, trust is compromised, and a timely and costly process of restoration is necessary. This is why it is so very important to have complete financial transparency along with a processes of accountability in place to reduce your risk.

Reducing Fraud’s Risk:

There are steps that you can take to reduce your companies risk for fraud. Implementing internal controls is a great first step to safeguarding your organization against fraudulent activities. It is important for management to first understand that the responsibility for identifying gaps that are putting you at risk for fraud lies first with them. This means that management should avoid becoming too complacent, relying on auditors to “catch” fraud if it occurs. This does not negate the need for an annual audit, it is still an important step for catching fraudulent activity that may have occurred. However, in most cases, an audit will be too late to prevent loss.

There are some important principles to keep in mind as you work to develop anti-fraud internal controls and policies for your organization:

Create and empower an audit team or committee who works independently of management. Empower them to bring in outside experts as they see fit in order to assist and advise them in their tasks. Aim to form a team with three to five members with at least one of them a financial expert. The other members can be comprised of individuals with financial and other skills that will help to provide the necessary perspective.
Create both internal and cultural controls that will ultimately become the core of your anti-fraud measures. These internal controls will act as a deterrent for most opportunities to hide fraud trails and will discourage most fraudsters. Tools such as access controls, segregation of duties, dual authorizations, cash policies, and security. Such controls will significantly decrease occupational fraud schemes.
Top down compliance. Ensure that management is modeling adherence to internal control policies and projects enthusiasm for them. This step can set the tone and create a culture of integrity. Such a culture will create ethics and empower employees to step in should they see fraudulent activities happening.
Provide a way for employees to report suspicious behaviors. Global fraud studies have shown that the most effective means of detecting fraudulent behavior is through tips. Tips have proven to be more effective than other means such as audits or surveillance. Consider a third-party hotline service.
Develop a response plan in case deterrence fails. In spite of everyone’s best efforts, fraud still can occur.

Although it is important is to respond quickly to fraud, the better plan is to avoid the situation in the first place. Of course it may be unrealistic to completely eliminate the risk of fraud. The executive team and management of your organization can take steps to minimize the risk by establishing an environment with strong cultural and internal controls, and developing a proactive fraud identification and response program.

Beck and Company’s Certified Public Accountants and Business Advisors offer auditing services that can provide you with an extensive examination of financial statements to give you a closer look at possible areas of fraud within your organization. We are passionate about helping nonprofits get their financial reporting in order so they can reduce their risk of fraud. Learn more about all of our nonprofit services in addition to the auditing services mentioned earlier. Contact us to let us know how we can help your organization with the financial services, internal audits, and other services to keep your finances in check and your organization to prevent fraud.

The Secret to Outcome Measures Success

Nonprofit organizations are finding it extremely helpful to be able to accurately show, with clarity and transparency their financial outcomes. Outcome measurements are generally used to communicate to investors and constituents the organization’s financial performances. Nonprofits are finding, particularly in today’s economy, that producing these reports can prove difficult, particularly without the proper tools. Conversely when tracked properly having these reports proves to be invaluable to the organization in order to ensure financial success and sustainable growth.

Why does it matter?

As your organization seeks to find financial support in today’s increasingly competitive environment, having an accurate display of your financial outcomes can play a key factor in winning grants and donations. And once those donors have chosen to invest in your nonprofit they will certainly want to see how their investment is being used to accomplish your organizational mission and goals. Gaining trust from your donors by reporting outcome measures will also increase their belief in you while building credibility amongst current and future investors and helping to increase multi-year financial gifts and grants.

Who’s looking?

There is increased demand for transparency and accountability amongst today’s nonprofits. Charity evaluators, not unlike for-profit financial analysts, are taking seriously their evaluations of your financial outcome reporting. This is a good thing as it creates the opportunity to solidify your reputation, becoming a trusted organization in your given field. This improved visibility can then result in a wider network of supporters.

Creating a framework for reporting.

Keep in mind that the main thing your evaluators are searching for is whether or not your organization is succeeding in accomplishing its core mission. Given that understanding, begin with a simple template headlining your objectives and then measuring results that directly link to that purpose. Ensure that your organizational structure is aimed at supporting your mission. Include progress markers, goals, and deadlines. Lastly, show supporting activities and include quantifiable measures.

Do not overcomplicate your reports with unnecessary metrics. Include clear and simple results that show the things that are most important to your organization.

Balanced Reporting

Outcome measurements will include all aspects of your organizations performance that show an impact. This includes performance, capacity, financial and/or sustainability. Neglecting to include non-financial information will prevent your donors and potential donors from truly understanding the success of your organization overall. Be sure to provide defined key indicators to create a complete picture to key stakeholders and constituents. This is a great way to use your website to show both internal and external constituents your organizations progress and accomplishments.

Helpful measurements to consider are:

Program efficiency—Show how you have used funds. A basic formula: Program efficiency = Total program services expenses ÷ total expenses

Revenue per member. In order to show the amount of revenue that is being generated from your membership, dues and/or program fees.

Fundraising metrics—what does it cost you to raise money?

Using the right tools:

Producing these reports can be easy, provided you have the right tools. Utilize software that can provide instant visibility and insights into your organization’s spending, allows you to manage programs and company mission. Here at Beck and Company we serve small and mid-sized organizations and individuals, providing audit, tax, accounting, and consulting service that address all aspects of your business with one goal in mind – exceeding your expectations. Contact us to learn more about finding the best solution to produce the reports and outcome measures that are right for you.

How Nonprofits Can Diversify Their Funds

Today, nonprofit organizations are looking at the future of their funding strategy and realizing that they may need to look beyond traditional types of funding. No longer can they rely solely on philanthropy to fund their organizations. The time has come to develop a sustainable funding strategy that will prepare them to thrive financially in the future using diversified funding methods.

Most likely your nonprofit will seek to expand its services in order to meet the current and expected demand. In order to successfully expand and maintain required funding you will need to remain credible and visible to the community, constituents, and potential funders. One way to maintain financial relevance is to diversify your funding streams. By doing so you will not only strengthen your financial viability but you will also expand your influence through new partnerships you may not have considered in the past.

Social finance is an approach to managing money which delivers a social dividend and an economic return, creating opportunities for new investors who want to support your initiatives because they feel they benefit society in some way.

Another financial strategy is Impact Investments. Impact investing refers to investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial, social or environmental impact alongside a financial return. It is a form of socially responsible investing that serves as a guide for various investment strategies. Impact investing has great potential to tap into sums of private investment capital in conjunction with meeting felt needs that are considered global challenges.

Program Related Investments. The IRS defines those in which:

The primary purpose is to accomplish one or more of the foundation’s exempt purposes,
Production of income or appreciation of property is not a significant purpose, and
Influencing legislation or taking part in political campaigns on behalf of candidates is not a purpose.

Social Enterprise. Social enterprises are businesses that aim to tackle social problems, improve communities, people’s life chances, or the environment. They make their money from selling goods and services in the open market, but they reinvest their profits back into the business or the local community. Nonprofit organizations will take advantage of this strategy to earn income which is then reinvested to further their mission. In addition to raising funds through social enterprises this is a great way to raise awareness and support for your organization or mission. Social enterprising may look like selling goods and or services for which profits are reinvested back into the organization.

The world of fundraising for nonprofits is expanding and changing at a rapid pace. Consider these fundraising opportunities as you prepare and plan your financial strategy for the future.

As Beck and Company’s Certified Public Accountants and Business Advisors, we understand that you want to do all that you can to remain financially healthy in order to carry out the vision and mission of your nonprofit organization. To learn more about our accounting services to help you navigate through these processes, visit here.

Contact us here at Beck and Company CPAs so we can help you with your unique needs as small business owners navigating healthcare and the Affordable Care Act.