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Mythbusters for Nonprofit Budgets and Policies

Does a nonprofit’s budget have to break even?

Board members and staff who are new to the charitable nonprofit context may wonder, “Does a nonprofit’s budget have to break-even?” “Can there be a profit?”

In this article, Nonprofit Budgets Have to Balance: False! (Blue Avocado) covers all things budget, including: surplus budgets, break-even budgets, deficit budgets, and the misconception that a nonprofit’s budget has to balance at the end of the year.

Find out how easy it can be to set up your budget while increasing the value delivered by your accounting functions. Schedule a free consultation with the accounting experts when you contact Beck & Company CPAS online, or call us directly at (703) 834-0776.

Among the many nonprofit budget best practices discussed in trade magazines and industry circles, budgeting is often relegated to the back pages or as an afterthought. Sound budgeting is the fuel that runs the nonprofit engine, ensuring that every program has enough support to run for the year and that funds are allocated fairly throughout the organization. It’s an important aspect of the annual accounting cycle and an activity that touches on every department within a nonprofit organization.

How your nonprofit derives its annual budget and how frequently it checks and updates it is a good gauge of its financial health. A healthy organization tackles the budgeting process early in the cycle, leaving adequate time for zero-based or increase-based budgeting. It also sets aside regular periods to examine and adjust existing budgets. Let’s look at nonprofit best practices in budgeting and how you can apply these best practices to your organization.

Budgets as Guides

Budgets are guides that help your organization plan for the future and determine its present course of action. They should be thought of as guidelines for spending and saving rather than rigid, fixed numbers to reach.

Budgets are also external-facing documents for many nonprofits. Department leaders and staff refer to them to establish programs and monitor costs, but they may also be shared with the Board of Directors, donors, and members to establish how funds are being spent and to develop a sense of transparency about activities, expenditures, and how donations are used.

Cash vs. Accrual Method

Another aspect of nonprofit best practices is deciding which accounting method a nonprofit will follow: cash or accrual basis. Cash basis records transactions as cash is received or spent. The accrual basis means recording revenues when they are earned and expenses when they are accrued. Either method is fine, if kept consistently. Smaller nonprofits often choose cash-based accounting methods and budgeting, while nonprofits receiving multi-year funding may find accrual methods work best.

Budget Checklist

As you begin your annual budget cycle, the following checklist of nonprofit best practices for budgeting may be helpful.

Set and follow a timeline: To complete your annual budget in a timely manner, it’s important to create a reasonable timeline with deadlines, milestones, and checkpoints for your staff. Make sure you allow adequate time for budget reviews and feedback.
Agree on goals: Plans for each department, which include stated goals and how they relate to the nonprofit mission, should be included in the budgets. Gain agreement on which programs and activities will proceed before you start the budgeting process.
Review current year budgets and actuals: Check your current budget and actual against the budget. This will help you set the new budget.
Assign roles and responsibilities: Each group should determine who will build the budget, who will review, and how the money will be allocated. The accounting department should also establish procedures for budget review and approval.
Draft income and expense budgets: Build out your drafts and share them for feedback.
Review process and approval: Leave plenty of time to share the drafts with the appropriate organizational leaders for review and approval.
Document approved budgets: Document the approved final budgets. Implement the final versions and assign people to monitor them.

Free Resources

Did you know that the National Council of Nonprofits has an abundance of articles, white papers, checklists, and a downloadable guide to assist with nonprofit budgeting? Take a look at their complete list on the National Council of Nonprofits website.

Beck & Company

Beck & Company is a certified public accounting firm serving the greater Washington D.C. area and the Eastern seaboard. We offer consulting services, auditing, and software selection to help nonprofits with their accounting needs. Contact us today for more information or assistance.

Overview of Internal Controls for Nonprofits

Nonprofit organizations aren’t immune to fraud. The Washington Post found that among approximately 1,000 nonprofits, losses due to fraud, theft, and embezzlement amounted to close to half a billion dollars in total.[1]

The report, based on tax returns from over five years in which nonprofits indicated losses due to fraud, is just the tip of the iceberg. The Association of Certified Fraud Examiners report in 2005 linked 12% of the fraud cases they had studied to nonprofit organizations.[2] No organization is immune to theft.

Among nonprofits, taking funds for personal use is perhaps the most commonly reported theft. And it’s the easiest to prevent. Unlike larger for-profit companies who report intentional errors made on financial reports as their biggest problem, nonprofits face a problem with a clear solution: internal controls.

Among other benefits, internal controls are the safeguard against temptation for your employees and volunteers. While simple in concept and execution, they can prevent many instances of fraud and theft.

A publication by the Virginia Society of Certified Public Accountants explains that good internal controls are essential to:

Prevent loss through errors, misappropriation of funds, or theft
Prevent an “honest” employee from making a mistake that can ruin his or her life
Document the responsibility of the board as it safeguards the assets of the NPO
Assure that all transactions are properly authorized and recorded

While seemingly time consuming, the simple act of having two people present during the petty cash audit protects both employees and assets—a distinct advantage of using adequate internal controls.

A Clear Definition of Internal Controls

The National Council of Nonprofits defines internal controls as financial management practices systematically used to prevent misuse and misappropriation of assets, such as occurs through theft or embezzlement. Internal controls protect not just assets but reputations, as well. That nonprofit organizations maintain the highest integrity and ethical standards is critical to attract funders.

The objective of internal controls is to put “checks and balances” in place to protect the assets of the organization.

Potential Pitfalls

Once at a holiday party hosted by a University of Texas accounting professor, I found myself standing next to auditing professor Steven Kachelmeier. Using my Dale Carnegie powers of conversation, I engaged Professor Kachelmeier in a discussion of top 10 internal controls for nonprofits. He responded by saying, “Just consider what can go wrong.”

I scoured the internet to find examples of what can go wrong with weak or non-existent internal controls. The following stories are true and could happen to you.

Situation: Cash goes missing.

Suppose checks are merely kept in the bottom drawer of a file cabinet. An enterprising employee might take a few checks from the bottom of the stack, forge a signature, and cash them, stealing thousands of dollars before being caught.

Internal Control Solution: Secure the checks with keys held by two different financial managers. Ensure that bank reconciliations are performed by staff with no access to deposits or withdrawals. Bank reconciliation should be prepared monthly, at minimum.

Situation: Employees add overtime.

A clever payroll employee adds overtime hours to pay himself or herself at time and-a-half.

Internal Control Solution: Timecards should be signed by managers. A second person compares the payroll totals to signed timecards.

Situation: Fundraising for the wrong pocketbook.

During a fundraiser, a volunteer handled all aspects of the cash ticket sales, including depositing funds and reconciling the bank statement. Occasionally short on cash, she would borrow funds and then pay them back. Until she didn’t pay them back. This well-meaning volunteer “borrowed” around $10,000. The event intended to be financed by the fundraiser was cancelled.

Internal Control Solution: Anytime cash is involved, the responsibilities should be divided among several people. At least two people should be present when cash is counted. Separate people should make the deposits and reconcile bank statements.

Internal controls should be clearly documented.

Your policies need to be documented in a procedural manual and authorized by the board or governing authority of the organization. Discovery of theft or an embezzlement and the resulting investigation is hard on the organization internally, and the external damage to the organization’s reputation can cause loss of funding. Additionally, bonding insurance premiums could skyrocket in the event of utilizing the policy due to employee fraud, especially if it could have been prevented by using good internal controls.

Establishing internal controls protects both the organization and the board members, officers, and staff. For more comprehensive reading, request a copy of our whitepaper, A Guide to Internal Controls for Non-Profit Organizations.

Beck & Company

Beck & Company can help with your nonprofit financial management needs. We are a CPA and business advisory firm dedicated to the nonprofit sector. Our many years of experience can help you update your financial compliance or handle all types of accounting for nonprofits. Please contact Beck & Company today for further details.

[1] https://www.washingtonpost.com/investigations/inside-the-hidden-world-of-thefts-scams-and-phantom-purchases-at-the-nations-nonprofits/2013/10/26/825a82ca-0c26-11e3-9941-6711ed662e71_story.html?utm_term=.6bf50202dc92

[2] https://nonprofitquarterly.org/2007/12/21/how-to-steal-from-a-nonprofit-who-does-it-and-how-to-prevent-it/

FASB Changes Impact how Grant Revenues are Categorized

The comments period may have ended, but changes are still coming to Accounting Standards Update (ASU), titled Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made. FASB issued a call for comments, which ended November 1. The proposed changes would clarify revenue recognition for contributions received and made and help nonprofits account more clearly for certain types of funds.

What Is the Proposed Change and Framework?

The changes are intended to help nonprofits distinguish between contributions (nonreciprocal transactions) and exchange (reciprocal) transactions. The changes also hope to add clarity to conditional and unconditional contributions. The results of the proposed framework changes may, in fact, push more grants into the category of contributions.

Under the new framework, if grants are deemed to be exchange transactions, then the revenues should be recorded as per the guidelines under Revenue from Contracts with Customers (Topic 606) or other applicable topics.

Grants determined to be contributions should be recognized instead as revenues in accordance with Subtopic 958-605, Not-for-Profit Entities–Revenue Recognition.

Nonprofits Still Have a Say

Nonprofits still have a majority say in how grants are categorized. Their first step is to determine whether a particular grant is a revenue or exchange transaction. If the grantor receives services of comparable value, it is usually safe to say that a transaction is an exchange.

The good part of the proposed guidelines is that the FASB includes numerous examples to help nonprofits understand the proposed framework and determine for themselves how the revenues will be categorized. Nonprofit still have a great deal of latitude in how and why they categorize particular revenues. They must, however, adhere to their own internal logic and establish guidelines based on the overarching, generally accepted accounting standards.

When Will the Changes Take Effect?

If the proposed changes do take effect, they won’t impact nonprofit reports until 2019 or 2020. They may impact organizations with the calendar year ending in 2019 or the fiscal year ending in 2020. Accounting actions completed before these dates may follow the old guidelines, which gives organizations plenty of time to update their accounting methods. If significant changes are made between the previous books and the new books, under the changed guidelines, the reason for the change should be noted in the financials next to each line that is affected by the change.

Accounting for Nonprofits Is Always Changing

Although it may seem as if accounting for nonprofits should be straightforward, grants represent an area with the potential for considerable gray areas. Nonprofit financial managers should look at the intention of the grant, whether any reciprocal action or stipulation is required, or how the grant must be satisfied.

Straight grants with no conditions attached are the easiest to recognize in revenues. Others, that come with conditions need careful, thoughtful attention. Developing your own set of revenue recognition rules that are in line with the FASB recommendations may be helpful to keep your organization consistent in how it manages its grant funds.

Beck & Company

Technology Enhances Internal Controls for Nonprofits

Nonprofit accounting audit service company Beck & Company Shares tips for better internal controls

Have you heard the term integrated audit technique? As a nonprofit accounting audit service, we keep our eye on the latest terms and technology available to our clients. Something new that has entered the world of nonprofit audits is the integrated audit technique. We’ll share a little about what that means and what it might mean to you.

Integrated Audit Technique

What is an “integrated audit technique?” It involves the integration of an organization’s manual internal controls with the use of technology to enhance and facilitate controls. Financial and operational areas are typically included in an integrated audit technique.

The idea is to use technology to make the auditing process easier and to help you maintain better oversight and control of your operational and financial budget. Technology cannot replace human oversight when it comes to internal controls, but it can help you flag unusual account activity and other signs that something is amiss.

How Technology Can Enhance Financial Controls

Most new accounting and financial technology offers some level of internal control. Controls currently in place can help you detect misstatements and misdirection used to mask fraud. Some of these actions can cause financial statements to be materially mistaken. At their most basic level, many financial and accounting systems have, for instance, coding built in that alerts you when an account reconciliation is unbalanced or when receivables and bank deposits do not match.

Technology controls are often split between general and application controls. General controls are, as the name suggests, broader and more sweeping in scope. They encompass the organization’s infrastructure and elements such as IT governance, network access, disaster recovery plans, and the like.

Application controls are more specific to the technology in use. When you understand all the application controls built into your system and how they work, you can use them to your advantage.

Areas of Concern

As you review both general and application controls, what should you be aware of? As a firm that provides nonprofit accounting audit services, we’ve seen some instances where an early detection of problems could have prevented many headaches later.

Some items to watch as part of your general financial controls:

Accounts payable
Inventory
Payroll
General ledger entries
Reporting
“Slush funds” or cash boxes (manual control needed rather than technology)

Areas of concern include duplicate entries, unauthorized access, and plain old common mistakes. One or two mistakes are easy to understand, but multiple mistakes made by the same person are cause for concern. This requires investigation, follow up, and potentially re-training and/or monitoring the person to help them correct their mistake.

IT Controls

Information technology is another area where having a solid control process in place is important. The technology behind your organization can help it run efficiently and effectively. The IT department must safeguard that technology. Part of the control process over the IT department includes:

Understanding who has access (and why)
Careful monitoring of system users
Written rules, regulations, and guidelines for technology use
Change management processes
Identification and routine updates of cybersecurity technology
Training for all employees on how to counteract and prevent cyber attacks.

Like financial controls, these are a few areas that nonprofits must manage carefully.

Financial and Technology Controls Need People to Manage It

Both financial and technology controls are important and can be used to help your organization avoid many problems. But the internal control process doesn’t end there. Before a nonprofit accounting audit service works with you, go over all your controls. Make sure that you are actively managing and monitoring controls.

The controls built into financial and accounting software, as well as the overall controls and management systems you put in place over your IT department, must work together to build the security of your organization. With active management and oversight, you can make technology your partner when it comes to audits and internal controls.

Beck & Company

Nonprofit Accounting Services to Help You Manage Executive Transitions

Executive transition is never easy, and it offers both challenges and opportunities for nonprofits. You may need the help of a nonprofit accounting service to help you fill a gap left by an outgoing CFO, for example. Beck & Company would like to invite you to download the free whitepaper, A Nonprofit’s Guide to Working Smarter with Outsourced Accounting, to provide valuable information during times of transition.

Challenges and Opportunities During an Executive’s Transition

When a beloved leader decides to retire or leave an organization, it offers both challenges and opportunities.

Challenges abound, of course. It’s hard to fill the shoes of a great CEO or CFO, someone who genuinely cared about their team and believed in the nonprofit’s mission. It also leads to uncertainty. Staff may wonder if they’ll like the new leaders or if they can work with them as easily and happily as they could with the outbound executive.

Changes also offer opportunities, and it is on this we’d like to focus. Opportunities include the ability to chart new directions with a new leader. New executives bring fresh ideas to an organization and may have experience from other posts that can help you grow. They bring new perspective and vision as well as energy into a nonprofit.

Bridging the Leadership Gap: Nonprofit Accounting Services

If you believe it will take a while to fill an open position, as it often does when trying to fill top slots, Beck & Company offers nonprofit accounting services that can fill interim gaps. Our team of CPAs has extensive experience in the nonprofit world and can serve as interim CFOs or other leadership positions until you are ready to hire a full-time executive.

Tips for Finding Your Next Leader

After the initial shock wears off, when you learn that a current leader plans to leave, it’s time to get working. Here are tips and best practices to help you find your next great CEO, CFO, or other nonprofit leader.

Create a succession plan: Nonprofit boards can do themselves and their organizations a great favor by developing a succession plan to guide the organization through leadership changes. Identify the qualities you seek in a leader and utilize groups or other resources to help you find the right candidates.

Ease into the transition: If possible (for example, if someone plans to retire), ease into the transition by leaving plenty of time to find the new leader. It can take a year or more to find a leader for a large nonprofit organization. With more time available, you have the benefit of being quite choosy about who will lead the organization to success.

Consider organizational culture: Take the pulse of your organization. Know its culture so you can find someone who will either continue the tradition or effect the changes you seek. Without a good understanding of the corporate culture, you run the risk of putting a leader into position who will find roadblocks and create more turmoil than necessary in the first year of leadership.

Support onboarding: Put into place an onboarding process that includes plenty of time for new leaders to meet key staff, understand the organization’s mission and principles, and broker relationships with donors and members. Don’t expect big changes right away; give the new leader time to ease into the organization.

Hire interim help: Interim leadership, such as nonprofit accounting services or CPAs to fill CFO spots, can be a great help. They can maintain continuity and ensure that operations run smoothly until you hire a new leader.

Change is never easy, but if you can use the opportunities it brings to your advantage, you can grow through it. Nonprofit boards can do a great deal to ease the stress of a leadership transition to ensure their organizations continue to benefit others.

Beck & Company offers experienced CPAs for nonprofit accounting services, interim financial management and consulting, and nonprofit audit services. We invite you to download our free white paper A Nonprofit’s Guide to Working Smarter with Outsourced Accounting and explore our services to help your nonprofit organization grow and thrive.

Beck & Company

How Membership Organizations Create Winning Experiences: Lessons from Amazon, Google and Apple

There is so much to learn from companies who have taken extra steps to build a great experience for their customers. Recent studies indicate that many membership organizations struggle to retain and attract new members. Marketing General reports that among the associates it surveyed, membership is down six percent overall. Sixty-eight percent report that retention remains stagnant.

Why is membership going down?

The truth is that members no longer feel their ‘user experience’ or membership experience, if you will, is providing them with the emotional satisfaction or experiential satisfaction they once had. Membership, in other words, isn’t providing the same value today that it once did. They are taking their money and memberships elsewhere, or foregoing memberships altogether to find other ways of enhancing professional value, education, and interactions.

Some of the issue stems from the rise of new technologies, such as social media, which make it easier than ever before to interact and network with people who share similar interests, professional background, and experience. This important function was once held solely by membership organizations, which provided meetings, forums, newsletters, and other tools that enabled people with a similar profession or interest to find common ground, share industry information, and support one another in their careers.

But we can’t lay all the blame at the feet of social media. Members always had a choice to join or not, even if it was a choice between local networking groups versus national membership, or organization A versus organization B.

A closer look at how big brands such as Amazon enhance user experience may help nonprofits learn how to enhance member experience and turn the tide on flagging interest in membership organizations.

What Membership Organizations Can Learn from User Experience

Several online brands offer lessons in user experience that we can translate into daily member experience.

Amazon: People love shopping on Amazon’s site because it provides seemingly limitless choices. The retailer began with books, added music, and now boasts almost every category of product under the sun. The site’s search engine is excellent and makes it easy to find what you are looking for. Site members also rank and comment on their purchases, adding quality assurance for ‘real people’ just like you to each listing.
Google: Over 60 percent of the world turns to Google to find what they need online. It’s fast, intuitive, and easy to use.
Apple: Apple’s products were originally created for graphic designers. Microsoft’s PCs were introduced for office and home computing, so Apple staked out a niche as the computer for graphic design. Today, its sleek design and powerful, virus-resistant computing power appeal to many.

What can we learn from the user experiences listed above?

Amazon – comprehensive selection, something for everyone, easy to find what customers need
Google – easy to use, fast, understands its customer base
Apple – innovative, cutting-edge, new, fresh

These concepts are important over-arching concepts for membership organizations. Taking a cue from the popular brands, member organizations can infuse “member experience” into their missions, values, and offerings so that potential members see and experience greater value from their membership.

To enhance your member experience, think of ways that you can:

Add comprehensive offerings to your member benefits, making it a ‘one stop shop’ for your members.
Enhance your membership so that it is as easy to use as a Google search.
Refresh your educational opportunities so that they are cutting-edge and different from what members may find at their local colleges, universities, or other professional development providers.

With a little planning and a lot of creativity, you can come up with member experiences that rival that of the big brands. Membership organizations need to evolve, grow, and change to keep pace with consumer demand. Make member experience part of your organization starting today.

Nonprofit Financial Management Help from Beck & Company

Beck & Company is a Washington D.C. area nonprofit accounting firm with a team of expert auditors, accountants, and advisors available to help nonprofits of all sizes. We provide a variety of consulting, auditing, and accounting services to help nonprofits outsource audit and nonprofit accounting tasks, improve operations and efficiency, so your team can be freed up to focus on your cause. For more information, please contact us at 703-834-0776 x 8001.

Great Questions Asked by Great Nonprofit Managers

How well do your managers ask questions? Some might not even give any weight to this or consider it a skill. You may not even see “question asking” on any list of managerial expectations. However, asking the right questions, and the tough questions, is an effective part of a manager’s job which implies it may require more attention.

Being a manager isn’t easy. Managers have finite resources and growing task lists. They must handle people and budgets with equal finesse, and in a nonprofit organization, also manage public perception. More importantly, they must be willing to ask the hard questions and to listen and learn from the answer they get as they explore ways in which to enhance and build their organization.

Asking the Hard Questions

The difficult questions are the ones whose answers may yield an unpleasant reality for the asker. In other words, you may not like what you hear! When it comes to nonprofit organizations, these three questions are at the top of the list of the hard questions that must be asked for organizations to ensure they’re doing the best they can to fulfill their mission.

1. Am I doing my job well? Followed by, are we doing our jobs well?

Your “job” at a nonprofit is more than the list of things you are responsible for. It’s also your job to help the organization maintain and achieve its mission, to build public perception and awareness, and to help keep a positive perception in the public’s eye. It’s not an easy task. Your responsibilities in this mix may be weighted more heavily towards one area or another depending on your role in an organization. But you still need to ask if you are doing your job.

Reviewing organization-wide goals and plans and assessing how well you are achieving key performance indicators can help you answer this question.

2. Are we adapting to changing circumstances?

As the proverb goes, “change is the only constant in life.” Situations, personnel, and other facts of nonprofit life can change over time. Organizations that can grow, adapt, and change are ones that thrive.

Look around your organization. How well have you adapted to changing circumstances? If your nonprofit began with one specific task in mind, have you been able to adapt to meet new challenges?

Examine systems, technology, personnel, geography, and other factors. Each area influences how well your nonprofit can do its job. Those that change with the times are those that can continue to grow, prospect, and help others.

3. How well are we using our resources?

The push within most nonprofits is to find ever-increasing sources of donations and funding to fuel growth. Looking at how well you are using your current resources isn’t easy. It can be troubling to realize that you’ve overspent on a marketing campaign or haven’t invested other resources wisely. Yet it’s only by asking these questions and facing the truth that you can find better ways to use existing resources.

Resources aren’t limited to funds, either. They can also refer to personnel. It’s a good idea to look at your team and make sure that you are allowing individuals to work to their strengths. Place them in positions where their unique talents can help the organization thrive. Outsourcing tasks like audit prep or nonprofit accounting can free your team up to do the work they were hired to do. Make sure that you are using people as well as financial resources in the best possible way.

Practice, Practice, Practice

Asking questions is a skill and can be improved with focus and practice. Managers are in place to find ways the organization can function more effectively. The best way to determine this is to ask questions about the people, process and systems being used. Getting curious about why things are done a certain way and if there’s a better approach only makes for a stronger manager, thought process and organization. Asking questions in a way that does not make others defensive is a great skill to hone in on too. As you practice this skill, and focus on getting better in this area not only improves your management style, it sets an example for others to learn and grow too.

How to Help Fundraising and Finance Work as a Team

In complex office environments where nonprofits are comprised of specialists, a high value is placed on leaders and systems that can bring departments together to get things done. Oftentimes, the finance and fundraising departments face similar challenges yet act like they are playing for separate teams. Aligning departments starts with a mutual consideration of roles.

Understanding Challenges

There’s an old saying that you don’t know what it’s like to be someone else unless you’ve walked a thousand miles in their shoes. With fundraising and finance teams, there are perspectives and tasks that each wished the other better understood.

Fundraising wishes that finance could…

Understand the challenges and process of fundraising.
Accept that you must spend money to make money (or get donations).
Help us maintain good donor relations.
Offer us some flexibility—things aren’t always black and white in our world.
Respect that fundraising isn’t easy.

And finance wishes that fundraising could…

Understand the fact that finance’s job is complex and time-consuming.
Accept help from experts in finance.
Help us do our jobs better by providing us with information we need.
Offer to sit with us to learn some basic accounting practices.
Respect deadlines.

Coming to a consensus is much easier when you understand and respect one another’s positions in a situation. Knowing what the other ‘team’ wants can help you step closer to a compromise and to supporting each other’s vital roles in an organization.

Different Departments, Similar Needs

Although finance and fundraising reflect different departments with varying needs, both seem to experience similar challenges when it comes to data and information. Ways in which both departments can help each other overcome their shared challenges include:

Collaborate on budgets and tracking
Improve reports and reconciliation of financial information
Have joint planning and goal-setting tasks
Communicate frequently and in a timely manner
Identify ideal processes and procedures
Integrate fundraising and accounting software

One tool that can help both departments communicate, collaborate, and plan together is nonprofit accounting software. Various software packages such as Intaact, work independently or together to provide data sharing among teams, timely updates, and more. Cloud-based solutions enhance communications because they can be accessed anywhere there’s a web connection. It makes it easier for fundraisers who travel to visit important donors to update their accounts, for example, which in turn provides information to finance to help them do their jobs better.

While the right software can’t solve all internal scuffles, it can help fundraising and finance join hands across the net and play for a winning nonprofit. It’s an important step in the right direction.

Intacct Cloud-based ERP Software

Intacct is specifically designed to provide nonprofits with the control needed to simplify financials and fundraising 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.

To learn more about Intacct, or how Beck & Company CPAs can help your finance and fundraising teams work together using our nonprofit accounting services, give us a call at 703-834-0776 x 8001.

Accounting for Nonprofits: The Hallmarks of Top Staff Accountants

Among all the topics surrounding accounting for nonprofits, the characteristics or hallmarks of top staff accountants are things rarely discussed. Of course, it takes accuracy to be an accountant, as well as a logical mind, strong attention to detail, and good communication skills.

But going beyond these requirements is a list of highly specific skills that all top-level staff accountants share. If you’d like to be numbered among the best accountants in your field, then make these skills a priority for your own personal development.

The Characteristics of Top Accountants

The best nonprofit financial managers and top accountants share the following characteristics.

Accuracy: All accountants must be accurate, but top accountants leave no stone unturned in their quest for all the details that matter. Good accountants must regularly review their own performance and look for mistakes in their own work before sending material on to others.
The big picture: Top accountants have the ability to step back and take in the big picture. They’re good at what they do, but they also have the ability to see how their work fits into the larger mission of the organization and, as such, they understand how to be helpful to others.
Deadlines: Many professions are deadline-driven, but accountants are always exceptionally deadline-oriented people. Top accountants set personal deadlines and try to achieve their goals early. They allow extra time in a project for those “just in case” moments when someone calls in sick or competing deadlines take people’s focus away from their project. Good accountants plan; great accountants plan for deadlines along with contingency plans.
Excellent communication skills: Accountants aren’t often thought of as communicators, but strong communication skills are a must for top accountants. Not only are you called upon to share facts and figures with others in your department, but you must be able to translate that information into language everyone within your organization can understand. There’s also the important matter of communicating with subordinates and managers. Keeping everyone informed, and understanding how and when to share information, is a hallmark of an exceptional accountant.
Integrity: We want everyone working with us to have integrity. Accountants must have exceptional integrity. Because they are charged with nonprofit financial management, they must be rigorously honest in everything they do. They must also be responsive to questions, complaints, and problems brought to their attention. Integrity, honesty, and ethics are part of the package that makes a great accountant.
Exceptional computer skills: Conquering spreadsheets, understanding the nuances of your company’s ERP system, and handling all reporting needs with calm assurance are all part of the job for the best accountants. They become the guru that everyone turns to when they need help with the number-crunching aspects of their company’s software. Even if you’re not a technical whiz, becoming fluent with the software package that your company has chosen is one of the ways in which top accountants go the extra mile.

Becoming the Best of the Best: Professional Development

What does it take to become and remain the best of the best? Ongoing professional development is a vital step for nonprofit financial managers and those leading accounting for nonprofits.

Such professional development need not be formal classes, although that can help. Professional development may take the form of attending seminars and online workshops, attending conferences, and networking with others in your profession.

Regardless of the form it takes, top accountants do not remain hunched over their spreadsheets all day. They are a vital and important part of the nonprofit team. Are you a leader among accountants? Set a personal goal for yourself to do all you can to be the best nonprofit accountant your organization has ever met.

Beck & Company

The Importance of Project Management Skills for Nonprofit Financial Management

Who do you turn to when you need to get things done within your company? Some people turn to their supervisors, but they may not always have the answer. The surprising fact is that accountants within most companies and nonprofits are the true “get it done” people.

Let’s face it—nonprofit financial management brings accountants into contact with all departments and people within an organization. Accountants know where the money leads, and they know where to find the funds to support new work. When you need to get something done, it is the accountant who can make it happen.

One skill, however, that many accountants lack and is important to nonprofit financial management and beyond, is project management. Accountants who can learn the terminology, skills, and general flow of projects will be better able to interface with all within an organization.

Let’s look at the basics of project management and how accountants can partner with project managers.

Project Flow in Project Management

Projects have a beginning, middle, and end. At the end, each project creates a unique output. There are milestones throughout the middle of a project that serve as checkpoints to the completion.

As part of nonprofit financial management, accountants help project managers handle the potential changes inherent in any project. As projects progress, budget needs may change. Accountants can assist during the project flow with any change requests and help project managers monitor and adjust budgets.

Project Charter

The project charter is the document that outlines the scope of the project. Some organizations call it a project plan or by another name, but the document itself is similar no matter where you work. It is an outline of what the proposed project should accomplish, starting dates, milestone dates, end dates, who will work on it, roles and responsibilities, and budgetary needs.

Accountants do not typically create project charters. Instead, your role as an accountant is to review the project charter from the standpoint of nonprofit financial management. You can review it objectively and offer advice and assistance to make sure it follows a logical train of thought.

Instead of being a gatekeeper or keeper of the purse strings, you’ll become a partner in the work. You can shape, guide, and advise during the process of creating the project charter so that the team won’t feel surprised or off guard if there are questions surrounding the finances for the project. In turn, they may have questions for you, from which your extensive experience as a managerial accountant may add quality and wisdom to the project.

Managing Risk

Every project comes with its own share of risk. There’s the risk of change, of missing deadlines … the list goes on and on.

Accountants working alongside project managers and project teams can help manage risks by:

Remaining close to the project: Be sure that someone from the accounting team continues to attend project meetings. By keeping up to date with what’s going on with the project, you can take steps to mitigate risks or to advise the team on how to avoid them.
Play the auditor’s role: An auditor asks key questions to bring to light things that may not have been recognized. Act like an auditor and ask questions of the team that will help them think through and around issues found within the project. Project managers and department stakeholders can help you understand the pros and cons and ramifications of many changes so you can ask questions that will help them get to the best possible outcome.
Avoid scope creep: When project managers come to you seeking more funds for an ongoing project, it may be time to examine the original project charter to see if scope creep has set in. Scope creep refers to additional outcomes that get added to an open project so that it eventually blows the original scope out of proportion. The result is a bloated project that may not be able to achieve its objectives. By remaining close to the project throughout its development and action steps, you can help project managers avoid potential pitfalls like this.

Projects vary according to the organization and the task. But one thing doesn’t vary: your knowledge, skills, and experience as an accountant provides you with exceptional nonprofit financial management skills. Partner with project teams for the best possible outcomes.