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Reacting to the Unexpected: Filling Senior Accounting Roles

It’s the phone call nobody wants to receive: a senior level staff member at your nonprofit organization has a personal emergency or has fallen ill and is in the hospital. Not only are you worried about them, but you’re also worried about fulfilling their obligations in light of an impending annual audit or year-end close. There’s a lot to do and you’re short a critical staff member’s talents.

While your team member is recovering or dealing with personal issues, you can fill that vacancy in several ways. The first thing to remember is that no matter how stressful things seem, there’s always a way to solve a problem. You can’t replace someone, but you can fill a vacancy.

Replacing Senior Financial Positions

Your organization’s controller, chief financial officer, or other senior-level accounting or finance person is likely responsible for many tasks. She is responsible for overseeing the accounting and finance teams, for apportioning funds, and for general fund accounting. She may be responsible for investments and for leading the end of year close or audit. All of these tasks are vital for the health and well-being of your organization.

First, decide how long you’re going to need someone for the temporary vacancy. If it’s just for a few days, someone from within the department is likely able to step in and lead open projects. If it’s weeks or months, however, you’ll need something more permanent to keep the work moving along.

Consider whether or not a consulting firm can fill the gap. Consultants offer many advantages over temporarily replacing an open position. A consulting firm can offer expert advice and insights that not only help you over the current bump but may provide long-lasting benefits for your organization.

You have several options to fill the gap left by an unexpected vacancy. You can:

Temporarily promote from within: Is there someone on the current team who can step into the role, even if it’s just temporary? Often you’ve got a star player already on the team who understands what needs to be done and who can lead the charge. Look within first to see if anyone fits the bill.
Work with a placement firm: Some placement first specialize in filling temporary finance positions. These firms screen senior and mid-level executives for you, and can find a consultant to fill the role. It may take that person a few days to fully understand the organization, and there may be cultural gaps as they learn the ropes at your nonprofit, but this can be a good measure if the position will be vacant for several weeks or months.
Hire a consulting firm: Firms such as Beck & Company can step in and lead the team temporarily. We can help you prepare for end of year close, a nonprofit audit, or an upcoming board meeting. We work as business consultants as well as accountants and have a team of CPAs, financial and business experts in the nonprofit world, ready to work with you.

At Beck & Company, we can help you get back on your feet when an unexpected vacancy stops progress on accounting and business projects. We can help you sort through the stress of an impending audit or help you figure out what needs to get done. Our consultants specialize in the world of nonprofits. We provide independent auditing, accounting, tax services, and consulting to help keep your organization’s finances running smoothly. Fund accounting is just one of our many specialties. Contact us today or call 703-834-0776 ext. 8001.

Providing Exceptional Customer Service in a Nonprofit Environment

Providing customer service in a nonprofit environment takes different forms depending on the type of work you’re doing. A homeless shelter that provides meals, beds, and hot showers on a daily basis may find that simply greeting each guest warmly and making sure the soap dispensers are filled is making great strides on their customer service. An educational nonprofit that sells books and teaching aids may find that fulfilling orders quickly boosts their service. To improve customer service in a nonprofit environment, you must first decide what good service means to your organization, determine ways to measure it, and then implement practices to improve it.

Determine Service Baselines

The first thing to do is to determine what constitutes the absolute minimum level of good service you can provide to your constituents. Here’s a simple checklist to help you take that first step.

At what point do members of your organization interface with the public?
Is it by phone, in person, social media, or at events?
Who meets with the public? Is it one person, a team, or everyone?
What is the interaction like?
What impression do you want people to get of your organization?
Do you give staff and volunteers any type of training in customer service currently? If so, what is that training?
Do you have any parameters for how quickly phone calls must be returned or who gets to respond to inquiries on social media? If so, how is this information shared with everyone?

Next, think about your desired outcomes. If your desired outcomes don’t match the current situation, what changes can you implement to help you achieve your outcomes?

Measuring Service

Organizations typically apply both qualitative and quantitative measurements to service. Qualitative sounds simple enough; you can send out surveys, save emails from constituents thanking someone for good service, or measure it in terms of donor and patron satisfaction.

Quantitative means measuring, and measuring involves numbers and data. You need a starting point, an objective, and a way to measure the distance between the two. When it comes to customer service, think about measuring the time elapsed between returning calls, the time to deliver service, and similar metrics.

Not everything can—or should—be measured. Make logical decisions based on what’s most important to your organization’s service level. Don’t force-fit anything into quantifiable metrics that doesn’t make sense to track.

Improving Service

Once you know what you have and what you’d like to see, it’s time to put into place some best practices for improving service. In a nonprofit environment, that can be slightly more challenging than in a for-profit environment if you’re dealing with volunteers as well as paid staff, but it can be done.

Set expectations: Set the bar high for customer service, and when new volunteers or staff are trained, make your expectations clear.
Establish written policies: Written service policies also make expectations clear and provide common standards by which service can be measured.
Reward right actions: When you notice people on your team giving great service, reward them by giving them praise, thanking them, or otherwise pointing attention to “right” behaviors.
Model what you’d like to see: Be sure that your senior level staff demonstrate the highest standards of behavior, too. It’s important that managers act as role models for volunteers and junior staff. People practice what they see, and when they see you “walk the walk,” they’ll know that good customer service is important to your organization.

Good customer service is important whether you run a nonprofit or a for-profit organization. When it comes to helping others or fulfilling your organization’s mission, your interactions with the public, and the positive feelings these interactions engender with the public, are what will lead people to think favorably of your organization and perhaps donate to it. It’s all part of running a great nonprofit organization!

Beck & Company

Beck & Company offers certified public accounting and business advice, with an emphasis on the world of nonprofit organizations. We understand the nuances and challenges that nonprofits face and can help you with accounting, business advice, and more. Contact us today or call 703-834-0776 ext. 8001.

Fund Accounting Best Practices and Resources

Fund accounting records daily transactions based on a nonprofit’s specified funds. You may have a general fund, a project-based fund, and so on to track income and expenses around grants, donor bequests, or special projects. By setting up a system of fund accounting that’s clear and easy to follow, you can keep your general ledger clean and ensure that expenses, income, and capital are tracked accurately.

Benefits of Fund Accounting

Fund accounting offers several benefits to nonprofits. First, it confers greater visibility on your accounts so that the public can confirm that your funds are being used as you promise they will be. It also offers greater insight into the nonprofit’s overall fiscal health. Donors and granting organizations like to know that their money is going to be used to continue your work fulfilling your mission, and not to close down the organization or conduct your work only half-heartedly due to lack of funds.

You can also manage your accounting better when using fund accounting methods. As you manage each fund, you can clearly see where you may need to increase your fundraising efforts and where you may be on a firmer footing. Funds that are low can be shored up; funds that are robust can continue.

Organizations bestowing grants on nonprofits also like to know where, when, and how their money will be used. Fund accounting makes that task easier, and may improve your chances of gaining much sought-after grants.

Setting Up Fund Accounting Software

The easiest way to track your funds for fund accounting systems is by setting up your accounting software so that it can track funds from the get-go. Most software packages enable users to define specific general ledger fields. These user-defined fields can be used to tag specific fund accounts and keep the general ledger clean and manageable. You can set these up when you install an accounting software program.

Best Practices in Action

Once you’ve established your accounts and you know what you have to work with, you can then implement best practices and develop a plan to shore up low funds and utilize other funds more effectively.

A good fund accounting plan includes assigning accountability for the fund, relationship building strategies, fund solicitation strategies, and more. In other words, you’ve got to know what money you have in the fund and how you’ll continue to grow and nurture relationships to keep it coming in.

As you can see, fund accounting is more than entries into the general ledger. It’s about making accounting an integral part of your nonprofit planning and operations. Accounting techniques like this can help you make great progress towards achieving your mission.

Fund Accounting Help

Beck & Company works with many types of nonprofits to help them organize, streamline, and refine their accounting and operations. We can help you establish your fund accounting system or clean up one that’s already in place but may not be doing what you’d like it to do.

You may also be interested in an upcoming webinar on fund accounting best practices. It’s free, and provides many resources you can use to improve your financial reporting.

We work with nonprofits to transition them into new systems and help them enhance their business and accounting processes. We can help you select the best accounting system for your needs and help you transition to a new system with minimal disruption and downtime. Contact us today or call 703-834-0776 ext. 8001.

Tracking Fundraising Metrics: What Should You Measure?

Nonprofits who use fundraising tactics need to measure outcomes just as for-profits do in order to ensure that their marketing efforts achieved their goals. But what should you measure?

Taking a cue from our for-profit friends, we know that specific metrics around marketing campaigns are important: open rates on emails, click-through rates, and so on. Fundraising is no different. We want to measure how many people received fundraising messages, read them, and responded to them.

Here’s an outline of basic metrics to collect, track and review after your fundraising campaigns have ended. How many of these does your nonprofit track? How many should you add to your next campaign?

The Numbers You Need to Know: Fundraising Metrics

Most nonprofits are using email marketing to reach potential donors during fundraising campaigns. Email marketing offers a measurable marketing method that’s relatively easy for newcomers to the world of marketing math and metrics to understand.

Why bother tracking email marketing metrics? When you know your numbers, you know what’s working and what’s not. You can test different elements of the email, like the subject line or the pictures you use, to see which one spurs the most people to open it and donate. You can learn from your campaigns rather than send them out with fingers crossed.

Let’s take a look at three important email metrics, what they mean, and how to track them.

First, a word about email marketing metrics: your metrics are probably sitting somewhere in the system you use to send emails out. This may be a CRM system, or an email provider like MailChimp, Constant Contact, or another company that helps you automate your emails. If you don’t have reports available, the formulas to calculate each rate are included below. They’re easy and can be done using just a calculator—no complicated math.

Open rate: The open rate for an email marketing campaign means how many people clicked and opened the email. This tells you that your emails are interesting enough to read, and that they are getting a reaction from people. The open rate = (emails opened/emails sent out).
Click rate: The click rate for a fundraising email campaign tells you how many people were interested enough to click the link in the email to visit your website. If you’ve asked them to click and donate, you can also compare the number of clicks to the number of donations and see how many people finished by donating to your cause or how many changed their minds after clicking the link and left before donating. The click rate = (emails clicked/emails sent).
Donor retention: Retention means you are keeping donors. It’s important to your organization because it means you’re continuing to both do the good work you intend to do and that you’re keeping your donors engaged and informed. It’s easier to solicit donations from existing donors than to find new ones, so the higher your donor retention rate, the better. You can calculate this number on your own (your email metrics probably won’t include this figure) by using the following formula: Donor retention = (repeat donors)/(previous donors).

Improving Fundraising Campaigns for Success: Register for Our Webinar

At Beck & Company, we want your fundraising campaigns to be successful. We’re offering a free informational webinar on Outcomes Measurement for your nonprofit. It’s more information on measuring outcomes. All outcomes, such as these marketing metrics, are important. Learn which operational outcomes and other metrics you should be tracking and how to harness data to improve your work. Visit our webinar page for more information.

Beck & Company provides consulting and accounting services to nonprofits. Contact us today or call 703-834-0776 ext. 8001 for more information on the services we provide to help your nonprofit thrive.

Outsourcing to Boost Operational Efficiencies

“You can’t be everything to everyone.”

Have you heard that saying? It’s an old proverb that has a deep ring of truth to it.

Many people try to cut corners and save money by doing everything themselves. Sooner or later, however, you realize that you can’t do everything well. By trying to be everything to everybody, you fail to be the best you can be in one specialty area. Your organization can suffer as a result.

Nonprofits often suffer from this problem. Founders try to handle their marketing, fundraising, and operations, as well as the mission of the nonprofit. Faced with ever-increasing duties, burnout is common as too many tasks pack into the same 24 hours. And since you can’t be great at everything you set your hand to in a given day, something, somewhere, has to give.

The Flip Side: Hiring Too Many People

Faced with such a dilemma, many nonprofits turn instead to hiring people to fill specialized roles. They hire someone to handle fundraising, and someone else to manage grants. Before long, they have many employees, but now feel the pinch of not enough cash because it’s all going to salaries. While they’re getting more work done, efficiencies suffer as organizations become staff-heavy.

What’s a nonprofit manager to do?

Outsourcing for Operational Efficiencies

Outsourcing is a great option for nonprofits to improve operational efficiencies. In today’s virtual, digital world, you can outsource almost any role at your nonprofit. Of course, the actual work that you do may be hands-on; visiting nurses must still care for patients, teachers must teach, and an animal shelter has animals that need to be fed. But many other roles, like communications, marketing, fundraising, and even accounting can be outsourced.

Outsourcing improves operational efficiencies by:

Reducing overhead and staff redundancies.
Finding and working with highly experienced specialists in their respective disciplines.
Offering flexibility so that you can tap into expertise when you need it, rather than hiring someone full time.
Providing access to top talent without the expense and time of recruiting, hiring, and training.

Outsourcing provides you with the flexibility to find and work with the best people in the nonprofit world. It also frees up your time so that you can focus on what’s critical to your organization.

Everyone’s core strengths are different. When you can work solely with your own strengths and outsource other tasks to someone else, your entire organization benefits. Not only is your time better spent on what you do well, but you can tap into a wealth of information and experience when you outsource specialized tasks.

Finding the Right Outsourcing Partner

Once you’ve made up your mind to find a company to outsource work to, it’s time to make some phone calls or emails. You can find potential vendors through a variety of channels.

Ask other nonprofits for recommendations. Many are happy to help out a fellow organization by recommending great companies, consultants, or individuals to you.
Review trade association memberships. Many associations include fine companies that provide outsourced services to nonprofits.
Search online. Be sure to read testimonials, case studies, and other third-party reviews of the organization.

Evaluate several companies so that you have an apples-to-apples comparison of their experience, approach, and other critical information about how they work and how they approach their projects.

Outsourcing is a great option for finding experienced professionals to help you with tasks that aren’t your strong suit. It can save time as well as add value to your organization. Whether you outsource fundraising, grant writing, or accounting, finding a great outsourcing partner is a step in the right direction.

Measure Your Results

How do you know that your nonprofit is working efficiently? Measure your outcomes. Leading nonprofits use outcome measures to demonstrate success to donors and stakeholders. Learn more about specific outcome metrics for nonprofits at this free webinar, Outcome Measures: Metrics that Matter for Nonprofits held Friday, September 16 at 2 PM ET.

Beck & Company

Established in 1987, Beck & Company is a CPA firm serving the Washington, D.C. and Eastern Seaboard area. Our services are personalized to your organization’s needs. We provide independent auditing, accounting, tax services, and consulting to help keep your organization’s finances running smoothly. Fund accounting is just one of our many specialties. Contact us today or call 703-834-0776

Relax the Rules and Increase Employee Productivity. Yes, It’s Possible!

When you think about employee productivity, chances are good that you think about driving home the message that the faster and better you can get people to work, the more productive they’ll become.

Yet such employee productivity messages often backfire. Employees are adults, and hearing messages about working harder, smarter, and better often have the opposite effect. Instead of saying, “Yes, Boss!” and forging ahead, they slack off. It’s as if you’ve issued them a challenge instead of a request.

If you’re tired of giving workers the same message about employee productivity, we’ve got good news for you. Relaxing, instead of tightening, the rules at work may boost productivity.

Three Low-Risk Rules to Relax for Productivity

Although most of the evidence about relaxing to boost productivity is anecdotal, you can still try a few simple ways to lighten up and get more done. These three low-risk, high-potential-benefit changes can be tested in most nonprofit workplaces.

Extend casual Fridays to casual summers: Casual Fridays offer even the most conservative offices to relax the dress code once a week. Casual summers take this a bit further, offering employees the chance to ditch the neckties or high heels in favor of casual, professional attire. Speak with your organization’s human resources department on how to craft a policy about casual attire to make sure people understand that ‘casual’ doesn’t mean ‘ready for the beach.’ You may also want to specify exceptions, such as meetings with clients, donors, directors, and the public that require a more polished, professional appearance.
Relaxed working hours: While it’s necessary to have enough staff to handle routine business during your regular working hours, allowing people to come to work early and leave early on a beautiful summer’s day may help productivity. Instead of feeling trapped at work, they may work harder and faster to get their work done and get out the door. Relaxed hours, flex time, or even working from home may help people focus so they can obtain the reward of more free time.
More breaks: Frequent breaks, even if they’re just to walk around the block, help boost productivity by giving people a change of scenery and a chance to clear their head. Banish the stigma of taking a break. Allow your employees a chance to actually have a lunch break, and give them a space away from their desks to eat. Breaks are part of work, and the less you hassle people about taking a few breaks here and there, the more productive they can become.

So which one of these ideas will you try? Choose one or try them all. The more you can reward, encourage, and inspire people, the better they will perform. Gone are the days of the Industrial Revolution when a mean supervisor was the way to get more work done. Instead of being the stick, offer a carrot. It’s the 21st century way to increase employee productivity.

Survival Guide for Nonprofit Finance Teams

Looking for more ways to enhance productivity of your team? Join us for this free webinar on Wednesday, August 31, at 2:00 PM ET. Survival Guide for Nonprofit Finance Teams will discuss ways you can increase productivity while facing the challenges facing nonprofit finance teams. Register here.

At Beck & Company, we can help you increase productivity when it comes to your accounting by taking the weight off your shoulders. Our experienced CPAS understand the nuances of nonprofit accounting and love helping great nonprofits succeed. We offer auditing services, tax and accounting services, and more. Contact us today or call 703-834-0776.

A Smooth Transition to a New System Begins with Training

Changing to a new system can be exciting. Many people on staff will be happy to say good-bye to the old system and its quirks. Others, however, may not be as quick to embrace change. A smooth transition to a new system begins by helping everyone see the benefits of change and working with them to understand its importance.

Why Do People Resist Change?

Entire books have been written about the human propensity to resist change. Some people just prefer things to be the same, day in and day out. Others love change and seek excitement. These are all quirks of human nature, and it’s almost a certainty that your staff includes people on both extremes of the change-spectrum as well as many people who sit squarely in the middle.

Five Best Practices to Prepare Your Team for Change

There are many best practices from the world of corporate training and adult learning that you can put into place to help your team ease through the transition. We’ve put together five of our favorites, techniques that we’ve seen work time and time again. Try these to help your team embrace change and move forward.

Identify the “Nellie Nay-Sayers”: Nellie Nay-Sayer is the pessimist in the bunch, the one who loves to say “I told you so” when something doesn’t work out. Nellie doesn’t want an idea to fail, but she’s sure it will. To help the Nellie Nay-Sayers in the bunch embrace change, make them part of the change. This way they have a vested interest in the outcome. Invite Nellie to be part of the team to find a solution and to learn about the new system. Include her in the discussions. The more you can make her feel part of the solution, the more you’ll dampen her negative attitude and fuel the positive.
Explain the reasons why: Give your team plenty of information and time to understand the reasons why you’re choosing a new system. Most will already understand the importance, but some do not. Host meetings, lunch and learns, and staff briefings to help people understand and recognize the importance of the new solution. Don’t spring the information on them at the last minute, but ramp up to the introduction of the new software with plenty of information for all.
Ask for input: Be sure to ask for input from multiple groups within your organization. Include members from each department so that everyone has a voice in the decision. Each group brings their own needs and concerns to the table. Including everyone ensures that the new solution you choose will meet the majority of needs in your organization.
Offer plenty of training: Training in a new system is more than a one-time workshop. Train small groups of people in the new system, and provide additional follow-up training and support. Invite participants to bring in work-related projects to use in the training so that the information they apply is both meaningful and useful. The more hands-on training you can provide to adults, the better they learn.
Train an expert: Another way to make the transition easier is to choose one internal expert from each department, someone who will receive advanced training and support. The onsite expert can then be the point person for questions and to help staff use the more advanced features of the system. This helps everyone use the new system to its fullest capacity, and gives people a friendly face from inside the organization to go to with questions.

It may take weeks to ramp up to your new system’s launch, but when it’s in place, and everyone has been training, you’ll find that people make the transition easier when these techniques are used to help them adjust. Change is hard, but with information, participation, awareness and training, it becomes a lot easier.

Beck & Company Training Opportunities

Beck & Company offers certified public accounting as well as business advice, with an emphasis on the world of nonprofit organizations. We understand the nuances and challenges that nonprofits face and can help you with accounting, business advice and more.

We offer many free training opportunities for your nonprofit organization. Join us for this exciting webinar, The New Roadmap for Nonprofit Finance, on August 16 at 2:00 PM ET. Check out the full list of upcoming webinars here.

Thinking of Making the Switch? Now’s the Time for a New Accounting System

No matter how much you may love your current accounting system, there comes a time when you need to make a change. It’s like a favorite pair of shoes that have simply worn out. No amount of patching or polishing is going to fix them. If that’s how you feel about your current accounting system, now is a great time to make a change.

Is It Time for a New System?

Change is always hard, and changing accounting systems can be a little bumpy for some companies. Employees are used to working a certain way. The current system is familiar and comfortable. They know precisely how to run reports, input data, and find what they need.

But there are certain signs and signals that let you know when it’s time for a new accounting system. Do any of these sound familiar?

Expansion: Your organization has grown since you implemented your original accounting system. Now you’ve got several locations, additional staff and more volunteers. The current system can’t accommodate all of its users. You’re constantly paying more money for additional site licenses so that telecommuting workers and new locations can access the same data.
Out-of-synch data: Separate systems at numerous locations mean that you’re regularly updating databases so that the information is in sync. You’re feeling frustrated because changes made to one database don’t flow through to others.
Changing priorities: When you installed your current system many years ago, you just needed to replace a paper-based accounting system with a computerized system. Now, however, you need to track different funds. You’ve expanded your operations, and offer more services, but your system can’t handle the newer information. Priorities have changed, but your system hasn’t.
Forever fixing: “Forever fixing” or “constantly patching” means that you’re always patching, fixing, or tweaking your existing system to get it to work. Maybe it crashes a lot. Perhaps it was infected with a virus last year which your IT people were able to remove, but it hasn’t worked the same way since. It stalls, freezes, or otherwise doesn’t work the way it should.

If you recognize your organization in any of these scenarios, it’s time to consider a new accounting system. You’ll be amazed at what’s available now for small to mid-sized businesses.

Newer accounting systems on the market are cloud-based. Cloud-based systems run off of the internet, so there’s no software to buy and install. These systems are also accessible wherever you have internet access. You can continue working whether you’re at home or at the office, and you can add additional locations quickly and easily.

Because such systems run off of the internet, the data streams in “real time” to the main database and back out to the users. This means that changes made in one location in your company flow through to all users. No more accessing data in one part of your company and finding it differs from data in another part.

Lastly, newer accounting systems synchronize with other systems such as membership systems, donor tracking and more. Your nonprofit can integrate multiple systems into an accounting system and track all of its operations.

Learn More

Learn more about an accounting system perfect for nonprofits by joining us for this free webinar, Intacct Product Tour for Nonprofits, on Tuesday, August 9, at 1:00 PM ET.

A nonprofit organization today needs a sophisticated database system. If you’ve put off changing to a new system because you were afraid of the downtime or expense, please contact Beck & Company today. We work with nonprofits to transition them into new systems and help them enhance their business and accounting processes. We can help you select the best accounting system for your needs and help you transition to a new system with minimal disruption and downtime. Contact us today or call 703-834-0776.

Uh-Oh: What to Do If Your Organization Loses Tax Exempt Status

It’s with a sinking feeling that you learn your nonprofit’s tax exempt status has been denied. You’ve got two tasks before you now: figuring out how it happened so that you can prevent it from happening again in the future, and appealing the decision to get your nonprofit’s tax exempt status active again.

Tax-Exempt Status: What Does It Mean?

Non-profit status is granted to your organization by the state. It is a business designation, not a tax designation. Once your organization has non-profit status, you can then apply for tax-exempt status.

Reasons Why You Can Lose Tax Exempt Status

The IRS lists six reasons why you can lose your tax exempt status. These fall into the following categories:

Deriving private benefit from charitable activities: This is a big no-no with the government. As a nonprofit organization, the benefits derived from your organization must flow to the groups you say you serve. You shouldn’t personally profit from the activities or the organization.
Lobbying: Nonprofits must not engage in political lobbying.
Political activity: Nonprofits must also refrain from any other political activities.
Unrelated business income: Income that’s derived from avenues not directly related to your nonprofit’s mission or activities can also be cause for losing tax exempt status.
Failing to file an annual report: Even if your organization doesn’t have to pay an annual income tax, in order to maintain your tax exempt status, the government requires specific information be reported each year. Failure to file an annual report can be problematic because it contains much of the required information to maintain tax exempt status.
Deviating from tax-exempt purposes: An organization sets forth specific reasons why it should be tax-exempt. Deviating from these purposes, or changing too much of what it does, is another reason why it can lose tax-exempt status.

Regaining Tax Exempt Status

It goes without saying that losing your tax exempt status is a serious problem. It shows that someone in your organization isn’t filing the right documents or that the group has lost sight of its mission. It may be time to meet with your leadership team and make sure everyone is on the same page.

After the dust settles and you can figure out where the mistakes occurred that led to losing nonprofit status, it’s time to roll up your sleeves and regain your status.

The National Council on Nonprofits recommends that you consult the IRS’s publication, Revenue Procedure 2014-11, and consult with your accounting firm for help regaining your nonprofit status. You must also clearly communicate with your members and donors, who may worry that their donations or dues aren’t being used properly. Let them know what is going on and the steps you are taking to fix the problem.

Going forward, be sure to take the following steps to safeguard your nonprofit status:

Maintain accurate records in a central location, and update those records periodically.
File all paperwork at the state and federal levels by the due date. Leave nothing to chance. Make it a priority!
Screen all potential new projects according to the rubric of how well they meet your current mission. Be tough. If they don’t fit the mission, you may need to pass on them.
Make sure that no one at your organization derives monetary gain from their work at the organization. Make it clear as part of your HR policies that such actions aren’t tolerated.
Hire external counsel, such as a CPA firm, to review your annual reports and your record keeping. An annual audit conducted by a reputable firm is a necessity.

It can be disheartening to learn that your organization has lost its nonprofit status. Take steps to rectify the situation and prevent future problems, clearly communicate those steps to your constituents, and soon you should be back on track to serve the people or causes that need you the most.

Beck & Company Certified Public Accountants and Business Advisors

At Beck & Company, our team of certified public accountants can guide you on how to apply for and maintain your tax-exempt status. We provide auditing services, consulting, business advice, workshops, and seminars for the nonprofit world. For more information, contact us or call 703-834-0776.

Keeping the Cash Flowing and Other Nonprofit Woes

Living hand-to-mouth, or living one step ahead of the bill collector, is something most college kids are chided about when they graduate and take their first job on the corporate ladder. Yet many nonprofits are living “hand to mouth” or waiting for the next fundraising event or donation campaign to make up for significant shortfalls in their cash flow.

If that just described your nonprofit, it’s time to take action. Just like newly-minted college graduates can only live on Ramen noodles and a weekly paycheck for so long, you’ve got to put aside a nest egg to carry your organization through the lean times.

No matter how good you’re doing now, lean times will come. They may come because of lowered donations or not winning a grant, or they may come simply because your constituents’ needs burgeon beyond what your current operating budget can sustain. That’s when having money set aside can be a lifesaver.

Five Tips for Corralling Your Cash Flow

If it’s time to corral your cash flow, these five tips can help you regain control and manage it more effectively against the proverbial rainy day.

Balance sheet management: A strong equity-to-debt ratio ensures that you’ve got enough cash on hand to safeguard your organization during lean times. If the ratio favors debt to equity, work on bringing it back into balance or slightly tipped to the equity side of the equation.
Avoid unnecessary debt: Debt, such as credit card debt or loans, can be used strategically to offset larger purchases. But don’t get into the habit of taking on large debts while waiting for more money to come in. That grant you’ve “always” gotten may not be awarded to you this year, or a charity fundraiser could be cancelled due to a snowstorm or hurricane. Smart use of debt may mean funding a large purchase with a loan or a no-interest credit card payment, for example, that lets you pay the principle off without interest or penalty.
Consider leasing major equipment: If your nonprofit regularly buys vehicles for its use, consider leasing them. The cost of the lease can be written off and you won’t have expensive payments to make to own something that depreciates in value. Other equipment such as office furniture, copiers and computers can also be leased.
Embrace the cloud: Cloud-based software can save an organization a great deal of money, which puts cash back into the cash flow. Cloud software uses rented or shared server space with other companies. You can renew licenses on a monthly or annual basis, and you don’t need to invest in costly upgrades or updates. The information saved to the cloud is also accessible for others in your organization via a web-based interface making it easier to share. It saves you money while enhancing productivity, two great strategies for improving cash flow.
Avoid taking on new projects until you’re sure you can afford them: That’s easier said than done for many nonprofits. The need is great, and the resources to serve that need may be small. But if you take on too many new projects too soon, without capital undergirding those projects, you could be headed for trouble. Instead, set aside money for specific capital campaigns such as building funds or new projects so that the money is earmarked for the intended purpose without taking it from the general cash flow.

Talk to your accountant or a business consultant such as Beck & Company about other strategies to improve your nonprofit’s cash flow. You can’t always rely on this week’s income to pay next week’s debts. Some weeks your donations will be up, some weeks they will be down. But with the right cash management strategy, you can be assured you’ll always have enough on hand to pay the most important bills first.

Beck & Company Certified Public Accountants and Business Advisors

At Beck & Company, we know that earning a margin means achieving your mission. Managing your money so that you can continue to do the work of your nonprofit is our primary concern. We work with nonprofits to help them with their accounting and business planning needs. Contact us today for more information, or call us at 703-834-0776.