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How Nonprofits Can Prepare for the Year-End

With the end of the year only a few weeks away, many nonprofits have already started focusing on closing out their books and preparing their year-end reports. Unfortunately, the holiday season makes it hard to focus on what needs to be done and many nonprofits could use a little help in preparing for the year-end. The following is a checklist that will help you prepare for the year-end and ensure that your new year starts out on the right foot.

Strategic Planning
The current economic uncertainty has brought about many challenges for nonprofit organizations. In fact, many are having to cut back on services and programs in order to stay afloat. 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.

Analyze and Develop a New Budget
While nobody enjoys budgeting, it is a necessary part of running a nonprofit. Take a look at this year’s budget and make note of any trends. Was your organization able to stick to the budget? What were the challenges? What could area use some improvement? Learn from this year’s mistakes and create an effective budget for the year to come.

Evaluate Your Financial Records
What is the current state of your financial records? Good, bad… or in need of some improvement? Hopefully your financial records are in good shape, but if they are not, you will need to do some work on them before the year ends. If necessary, hire a professional. 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 and other funders. Ensure that you have the documents you need by asking yourself the following questions:

Are last year’s operating documents (such as board meeting minutes, resolutions, loan agreements, etc.) easily accessible? If not, make sure that all of your documents are organized by the end of the year. You will need to access this information at a moment’s notice and cannot afford to waste time digging around looking for a document.
Are you prepared to file your organization’s IRS annual reporting requirement (Form 990)? While it may not be due until May 15^th, now is a good time to make sure your financial records are in good shape. You don’t want to be scrambling right before the deadline!

Update Donor Records
Donors are extremely important to nonprofit organizations, as they make your mission possible. Make sure that your donor records are in order by the year-end, for donors will be expecting their annual contribution statements at the beginning of the year.

Payroll
If your organization has staff, you probably have some work to do in this area. Tax deadlines are on the horizon (think W2s and tax deposits), and you need to be prepared. Make sure everything is in order to ensure your employees receive their W2s in a timely manner.

Prepare for Your Annual Board Meeting
While many organizations only have board meetings once a year, nonprofits would benefit from having 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.

As you can see, nonprofits need to be prepared for year-end. Many organizations also like to focus their efforts on last-minute fundraising. For more information about year-end financial reporting, click here.

Industry Update: Proposed Rule Changes to A-133

In order to ensure that the public receives the most value for the more than $600 billion tax dollars spent each year, it is essential that Federal grants programs function as effectively and efficiently as possible. To this end President Obama has directed the Office of Management and Budget (OMB) to work to evaluate potential reforms to Federal grants policies. The OMB has released an Advance Notice of potential reforms and Beck and Company CPA’s is keeping our ear to the wall in order to stay abreast of this process in order to help keep you informed.

The ultimate goals of the reform are to:

Strengthen the oversight of Federal grant dollars by aligning existing administrative requirements to better address ongoing and emerging risks to program outcomes and integrity.
Increase efficiency and effectiveness of grant programs by eliminating unnecessary and duplicative requirements.
Adopt a risk based model for Single Audits, and provide new administrative approaches for determining and monitoring the allocation of Federal funds.
Eliminate roadblocks to effective performance in carrying out and completing grants and cooperative agreements and to reduce unnecessary ‘‘red tape’’ that is attached to grant monies.

Section A: Proposed Reforms to Audit Requirements

Concentrating audit and oversight on higher dollar/risk awards.
Streamlining the universal compliance requirements.
Strengthening the guidance on audit follow-up for Federal awarding agencies.
Reducing burdens on pass-through /sub recipients by ensuring cross-agency coordination.
Reducing burdens on pass-through entities and sub recipients from audit follow-up.

Section B: Proposed Reforms to Cost Principles

Using flat rates instead of negotiated rates for indirect (‘‘facilities and administrative’’) costs.
Exploring alternatives to time-and effort reporting requirements for salaries and wages.
Including the cost of certain computing devices as allowable direct cost supplies.
Allowing for the budgeting for contingency funds for certain awards.
Requesting that the (CASB) increase the minimum threshold for disclosure statements.
Providing non-profit organizations an example of the Certificate of Indirect Costs, and Indirect Cost Proposal Documentation Requirements.

Section C: Possible Reforms to Administrative Requirements

Creating a consolidated, uniform set of administrative requirements.
Requiring pre-award consideration of each proposal’s merit and each applicant’s financial risk.
Requiring agencies to provide 90 day notice of funding opportunities.
Providing a standard format for announcements of funding opportunities.
Reiterating that information collections are subject to Paperwork Reduction Act approval.

If you’d like more in-depth information in regards to the proposed rule changes to
A-133, attend our free webinar. Learn more.

6 Tips for Keeping Your Data Secure

Nonprofit organizations and small businesses both handle significant amounts of sensitive information. With cybercriminals on the rise, nonprofits and businesses need to take extra precautions when it comes to securing their data. Cyber thieves target small businesses and nonprofits, knowing that they do not have the resources to invest in expensive security systems and often have older computer systems that make it easier to steal business-critical data.

So what can small businesses and nonprofits do to ensure that their data remains secure? The following tips will ensure that your data is secure from online predators:

1. Create a company-wide security policy. Create policies that specifically state who has access to which resources and be firm in implementing these policies. Access to systems and information should only be granted to people within the organization who need to know the information. Ensure that your systems are only being used for work-related activities. Make sure each user has his or her own credentials and that each system requires a unique password to login. Consider including prohibitions against accessing Facebook, personal email and social networking sites.

2. Store important data in encrypted formats. Donor information, customer details, employee information, financial data and other important documents should be stored in an encrypted format.

3. Run security software on all PCs. This includes antivirus software, firewalls, and antispyware protection. While this may seem obvious, you would be surprised at the number of companies and nonprofits that do not run security software. Also make sure that your security software subscriptions are current. If it’s out of date, it will do you no good.

4. Comply with credit card security rules. Ensure that your company or nonprofit is compliant with credit card security rules and, unless absolutely necessary, do not store credit card information after a transaction is completed. Make sure that you do not store credit card security codes or debit PINS anywhere on your computer.

5. Set up a separate network for visitors. If your company or nonprofit provides wireless Internet access for visitors and guests, protect yourself by implementing a separate network for your guests.

6. Change passwords regularly. As a rule, your passwords should be changed quarterly. Make sure that your passwords avoid personal information and are difficult for outsiders to figure out.

For more information about protecting your company’s important data, read our article about employees and company security.

Does Your Business Have a Disaster-Recovery Plan in Place?

No business is immune to disaster. Whether the disaster comes in the form of a hurricane, cyber attack or power shortage, unexpected disasters can cause considerable amounts of damage to any company. Since companies cannot prevent disasters from occurring, they need to have some sort of plan in place to guarantee that they receive as little damage as possible.

While the idea of implementing a disaster-recovery plan may seem obvious, more than 60% of small businesses do not have a formal emergency plan in place and fail to backup important data off-site, leaving their business susceptible to data loss should a disaster strike.

A recent research study by Sage North America shows that while 94% of small businesses regularly backup their data, most of them do not store their data off-site. Storing data backups on-site puts companies at risk. Should a fire, earthquake, flood or other natural disaster destroy the office building, crucial data backups will also be destroyed, leaving the company without the important data it needs to successfully do business.

Data loss can significantly impact the operations and future of a company. In order to come out of a disaster as quickly as possible, companies need to develop an emergency-response plan that includes solutions for protecting critical data, such as storing backups off-site.

The study also found that 62% of small businesses do not have a formal plan for responding to an emergency or natural disaster. The most commonly cited reason for not having a formal response plan in place was the lack of disasters in the area. If a company is located in an area that is not prone to disasters, companies are less likely to be prepared.

Even if your company is located in a relatively disaster-free area, you still need to be prepared. Guarantee that your data is secure, by making sure that your plan thoroughly covers data backup. Determine how often you will backup your data. Will you backup important data daily, weekly or at least once a month? How long will it take to backup your data? Where will you store your backups? Will you store it both on-site and off-site?

Keep these questions in mind as you are developing your disaster-recovery plan. Make sure that your plan is unique to your business and addresses all of the areas that will make it possible for your company to bounce back from a disaster quickly.

Revisiting the Affordable Healthcare Act

Many companies and organizations have been asking the same question: When does the Affordable Healthcare Act, formerly called the Patient Protection and Affordable Care Act (PPACA) and more commonly known as Obamacare, become effective?

The federal law, signed by President Obama in March 2010, works to provide affordable healthcare to individuals who cannot afford adequate medical insurance and increase the overall costs of healthcare. Since changes are continually being made to the healthcare act, many companies have become confused as to when various parts of the act become effective.

The following provisions have already become effective:

June 2010: Early retirees (between the ages of 55 and 65) became eligible for expanded medical insurance benefits.
September 2010: Free preventative care, such as colonoscopies and mammograms.
January 2011: In order to lower healthcare premiums, the law requires insurance companies to spend 85% of premium dollars on improving healthcare services.
January 2011: The act is improving the healthcare quality and efficiency to reduce the rate of Medicare and Medicaid.
January 2012: Providing incentives for medical professionals to join Accountable Care Organizations in order to encourage integrated healthcare systems.

The following dates signify the provisions that are still to become effective:

October 2013: Provides new funding for the Children’s Health Insurance Program (CHIP)
January 2014: Remove annual limits on group insurance coverage plans.
January 2014: Prohibit insurance companies from discriminating members based on gender and pre-existing conditions.
January 2014: Affordable Insurance Exchanges become available.

7 Tips for Improving Your Company’s Website

Does your accounting firm have a website? You may think that’s an odd question to ask in today’s day and age, but according to The CPA Technology Advisor’s 2008 poll, only 57% of accounting firms have a website. That means 43% of accounting firms do not have a way for potential clients to research their services on the web. As for the companies that do have a website, there are key mistakes that many companies make in developing their website. The following suggestions will help you make the necessary improvements to your company’s website and attract new clients.

1. Make sure that your phone number is on every page.
Don’t make it difficult for prospects (or current clients) to find your phone number. Make it easy for prospects to contact you by putting it on every page and making it large enough for them to read. If they need to contact a specific person, make sure you include that in the contact information.

2. Your website needs to be search engine optimized.
What good is a website if prospects cannot find it? Make sure your website is search engine optimized in order to increase the value of your website. If you are unsure how to optimize your website, there are numerous resources on the web that can help you improve the rankings of your website.

3. Ensure that your content is well-written and easy to read.
Readers are looking for content that is concise. If your content is too lengthy, or if it is written in “professional lingo”, prospects will most likely move onto another website. Make it easy for prospects to determine if your company is a good fit for them. Including bulleted lists, highlighted words, and short paragraphs will make your content easier to scan, enticing prospects to read more.

4. Make sure the graphic design, colors and photography on your website flow.
Photographs convey things that words cannot; therefore, incorporate photographs throughout your website. They help create a quick impression of your company and encourage prospects to continue reading. Include photographs of your products, services and staff.

5. Answer your prospects’ questions.
Often, prospects who review a company’s website prior to contacting the company have clear goals in mind. They visit the website in order to find a solution. Brainstorm questions you think a prospective client would ask and make sure that the answers can be found on your website.

6. Make your website easy to navigate.
Your website needs to be easy to get around and user-friendly. Most web browsers are impatient and will move on if they cannot find what they need. Guarantee that prospective clients don’t give up on your company before they have the chance by following the “3-Click Rule”. If a prospect cannot navigate to any page on your website in less than 3 clicks, your website is not easy to navigate. Take the time to re-evaluate the layout of your website to ensure that prospects are able to quickly find what they need.

7. Update your homepage.
Your homepage is the first thing prospective clients see when they visit your website. While it may not seem fair, they will form a perspective of your company with one glance. Websites that look outdated will generally not be given a second look. Make sure that your homepage develops the “personality” of your company without blowing up in the reader’s face (literally). Eliminate any banners or pop-up ads. Keep the design simple and sleek. If you need to research other companies’ homepages, do so. Your homepage is your opportunity to make a good first impression. Don’t mess that up by giving your prospects an outdated, uninformative welcome page.

Add Value to Your Social Media Network by Investing in Relationships

If you know anything about social media networks, you’ve most likely heard of LinkedIn. A popular professional networking tool, LinkedIn connects you with business professionals and prospective clients to exchange knowledge, ideas and opportunities. With over 55 million users, LinkedIn is growing fast and, with that growth, it is helping businesses just like yours reach their full potential.

With the emergence of social media avenues such as LinkedIn, it is becoming more important to establish a “network” (or a way of reconnecting with previous colleagues and friends). While there are many reasons for build their network in order to help others. Services such as LinkedIn give companies the opportunity to put themselves out there and offer their advice or services. The key to developing a network is to not expect anything from these relationships. Make sure that you put yourself out there as a resource first and foremost. Your colleagues and friends will, in turn, respect you and the work your company does.

Keep in mind that your network is permanent. The relationships you establish will continue through the years, so nurture them. Stay active in your network. Keep these tips in mind when you find your participation waning:

Be attentive. Make sure that your network knows you are paying attention. When someone within your network gets a promotion, give them a call to congratulate them. Stay in touch throughout the year and make note of any achievements your colleagues make. Your attentiveness will give your network a newfound respect for you and your organization.
Keep a calendar. Update your calendar to keep track of important days (such as Christmas, birthdays, etc.) that pertain to your network members. Sending a personal note on holidays will show that you care and are committed to staying in touch.
Remember the 80/20 rule. While this rule is meant to pertain to business, it can easily be applied to network relationships. As the rule states, about 20% of your network will provide you with 80% of your network’s value. Therefore, do not stretch yourself too thin. Focus on the most influential 20% in your network and watch as your network blossoms.

LinkedIn, and social media sites like it, give you the opportunity to make lasting connections and share valuable resources. Take the time to build your network and invest in those relationships. Connecting with professionals just like yourself will make your business more meaningful and your business relationships more beneficial.

Why Accountants Should Use Social Media

Communication is an art form and, in this day and age, is a necessity in any business. While companies many years ago could succeed by pushing information and products onto prospects and customers, businesses today are finding that in order to keep their customers, they must learn to communicate with their customers. This means asking (and caring) about their customers’ wants and needs. The emergence of social media has provided an avenue through which companies can communicate with their customers and prospects.

If your company is not currently participating in social media networks, you should seriously consider it. Social media networks not only help you connect with others to share ideas, get customer feedback, and stay updated on industry news, but they also help you generate leads for your company. Accountants can benefit greatly from participating in social media. The following benefits will convince any accountant to take advantage of social media and its ability to improve the communication between companies and clients.

Build trust. Social media helps you establish and capitalize on the trust your company has worked to establish with your clients and partners. Use social media to maintain relationships with former colleagues and develop new relationships with potential clients. The more your clients hear from you, the more connected they will feel to your company.

Control your “brand” perception. Social media is all about making connections in your local area (and beyond). Connect with small business owners and learn how to further develop your company’s brand. Social media can help you control your company’s image by maintaining positive relationships with the companies and clients in your network.

Lower your marketing costs. When used properly, social media can lower the marketing costs of each new client over time. While the results may not be instantaneous, your marketing costs will be reduced as you continue to employ the use of social media.

Drive traffic to your website. Social media is one of the most guaranteed ways for building website traffic. Interact with your followers on a regular basis by posting questions and responding to posts from others. This will lead the recipients to visit your website to learn more about you and the services you provide.

Improve your search engine rankings. As Google continues to change the game on search engine marketing, a company’s use of social media is becoming more important than ever. Search engines now place a heavier emphasis on real-time, user-generated search results. Active participation in social media networks increases your chances of being ranked higher.

Is Your Email Newsletter Due for an Update?

Does your company use an email newsletter to keep your clients up-to-date on company and industry-wide news? Email newsletters can be useful not only in updating your clients on important news, but they can also be used as an avenue to teach your clients new techniques and help your company rise to the forefront of their minds when they go looking for the services that you provide. With so much potential, companies need to constantly re-evaluate their newsletter and update the look and content of their publication. Whether you create your newsletter in-house, buy it from a third-party source, or outsource its development, the following steps can help you revamp your newsletter.

Focus on Improving Content

Make sure your content is client-focused. Is your content written with the customers’ wants and needs in mind? Does it relate to the services or products you provide? If you aren’t sure what your customers want, ask! Send out a client survey or make a few phone calls to research what your clients want to know more about.
Write original content. If you buy a newsletter from a service, make sure that you include content that pertains to your audience or industry. Ask if there are different, more personalized content options. Keep in mind that the service provider wants to keep you as a customer, so making a few tweaks to the content should not be an issue.
Tie in to your products and services. Have a reason for every topic you write. While your products and services may not tie into every article, attempt to highlight products and services as often as you can in order to establish your expertise among your clients. Think about the products and services you offer and develop topics that pertain to your products and services. Making sure that your content ties into what you offer is always a good move.
Segment your email audience. Do you have products and services that pertain to only a portion of your clients? Segment your mailing list and send emails related to that specific product or service to separate lists. This may take a little extra time and effort, but your clients will appreciate receiving updates that are catered to their particular product or service.
Speak in terms your clients will understand. Professional jargon and “industry-talk” will only deter your clients from reading your content. If you are writing about financial plans, don’t focus on the details of setting them up. Instead, focus on your clients’ goals and how your company can help clients reach those goals.
Keep content short and simple. Short articles and short newsletters will keep your audience engaged and coming back for more. Readers are drawn to content that is short and to the point. While there is no “magic number” for content length – keep it long enough to get your information across, but short enough to keep their attention.

Brevity is Key
Instead of featuring the full articles in your email newsletter, include just enough of the article to peak the readers’ interest. After a few sentences or brief paragraph to introduce the article, include a link to a landing page on your company’s website or your blog for readers to access the full article. This will drive more traffic to your website and give readers a chance to view your products and services in more detail.

Build upon Customer Connections
Make sure that your email newsletter offers clients a chance to connect with you. Make the newsletter as interactive as possible. Include links to your company’s social media websites, such as Twitter, Facebook and LinkedIn. Ask for feedback and give your clients multiple ways to keep in touch. Provide them with periodic special offers, surveys, and tools to download from your website. Make sure your clients feel valued by keeping an open communication policy.

Overall, email newsletters are great marketing tools for any type of company. They build loyalty with clients, keep your name in front of current customers and prospects, provide information about your company’s products and services, and establish your company as an expert in your field. Taking the time to revamp your current newsletter will be far worth the reward.

For Effective Financial Reports, Transparency is Key

Creating effective financial reports for your business or organization can be challenging; however, the type of financial reports you create can determine the success of your business. Financial reports help business owners and managers make decisions regarding proper investments, operations and the overall running of the company. For this reason, transparency is key.

Investors want to see more transparent information about the financial data of the company in financial reports. In order to please investors and upper management, companies need to provide clear, accurate information instead of trying to skillfully hide the facts.

What Does a Transparent Report Look Like?
Before discussing the importance of transparency in financial reporting, you must first understand what the word transparent means. The basic definition of transparent is “very clear, easily understood, candid and frank”. With this definition in mind, you can assume that transparency in financial reporting requires that the financial information of the company be relayed accurately and in a way that is easily understood.

Improving transparency means relaying the “whole story” of an organization as seen through the eyes of management, including nonfinancial indicators of current and future performance, risks, and other factors necessary to better understand the business. In addition, transparency improves the availability, timeliness and relevance of information that is needed by stakeholders in the company.

The Challenge of Transparency
Transparency is not always easy. Problems in the business can create additional problems in financial reports. Generally, misstatements of information in financial reports are accidental rather than deliberate. Nevertheless, inaccurate information is almost always connected to problems in the business or miscommunication within the organization.

Businesses should not wait for a year-end audit to be surprised by inaccuracies. With the help of an accounting system (available for both for-profit and non-profit organizations), companies can review the accuracy of their financial reports and maintain transparency.

The Importance of Internal Controls and Documentation
Accurate reporting can be ensured by maintaining sufficient controls throughout the company. Standardized processes not only ensure accurate accounting and financial reporting, but it also reduces the level of complexity throughout the organization.

Internal controls are essential to the success of the operations of any type of company and organization. Internal controls assist board members and management in carrying out their financial duties and operating responsibilities, help employees create timely and accurate financial reports, and improve the effectiveness and efficiency of operations.

Through accurate reporting and the establishment of internal controls, companies can maintain the transparency needed in financial reports. Learn more about the importance of transparency in financial reporting by reading our blog, “Using Accounting to Make Your Organization More Accountable”.