Category: Accounting for Nonprofits

Mentoring for Senior Level Accountants

Accounting for nonprofits includes both the people and the skills they bring to the world of nonprofit financial management. Skills can be acquired through formal studies, such as a college degree and CPA program, or through additional professional development. One often overlooked method of improving professional skills is through mentoring. And while we often think of mentoring programs as programs for people just entering their careers, senior-level accountants can benefit from mentoring just as much, if not more so, than junior level accountants.

Newcomers to the professional world of accounting benefit from mentorship in many ways. A mentor can help you navigate new territories, such as office politics, ethical issues, and career decisions. They can help you choose the best school to finish your CPA or listen to you and provide advice as you juggle work, family, school, and career issues.

But senior accountants working at nonprofits face these and even more challenges. Challenges, issues, and problems don’t go away the higher you rise in the company’s ranks. Instead, they grow increasingly complex. The opportunity to network with and be mentored by other senior accountants offers priceless opportunities for professional growth.

Issues for Senior-Level Accountants: It’s About the People

For senior-level accountants, the issues they bring to mentors aren’t about the work itself, but about the people they manage. Management takes practice and training and often improves the most from mentoring. Most people aren’t natural-born leaders and managers and need good managers to emulate. That’s where mentoring comes into the picture.

Through mentoring and modeling better management and communication skills, those working at accounting for nonprofits can learn and grow.

The Trickle-Down Effect

If you think you can’t take the time out of your busy schedule to find and work with a mentor, consider the many positive benefits that mentoring brings not just to your personal and work life, but to your entire organization. Mentoring builds management skills, and better management skills improve morale and productivity in an office. The result is a trickle-down effect that can improve the entire company.

An important aspect of being an executive is being able to help nurture the talents and skills in others. When you improve your skills, you can now share that with others below you in the organization.

How to Find and Work with a Mentor

Many people seeking mentors work with life coaches, business coaches, or other professionals to find a matching mentor who complements their skills. Other avenues to find a mentor may be local networking group, business meetings and groups, and professional networks. You may also find someone you admire and ask if they would mentor you.

If you’re considering entering into a mentoring relationship with another senior level accountant, have a plan of action in mind. Approach the relationship with a goal and be open to the other person. Explain the reason why you are looking for a mentor and how you can mutually benefit from the relationship.

Other tips to find and work with mentors include:

  • Identify specific skills to work on and communicate this to your mentor.
  • Establish set time periods for the work and schedule appointments to review progress.
  • Be receptive to constructive feedback. This isn’t about stroking your ego, but about learning and growing. It can be painful to hear some criticism, but it will help you grow.
  • Ask your mentor for homework. Assignments can help bring structure to the relationship and give you concrete tasks to work on for your personal development plan.
  • Track and measure progress. Don’t leave it open-ended. Write down in a personal journal or notebook what you are learning and review it frequently so that you can get the most benefit from the mentoring relationship.
  • Consider giving back what you have learned through a mentoring relationship with others.

Mentoring takes time, and it’s important to find someone who has the skills required as well as earns your respect. But once you do find a mentor, the relationship can yield many valuable insights that can make you a better manager.

Beck & Company

Beck & Company are Washington DC nonprofit advisors. We also are Virginia certified nonprofit accountants. We work with nonprofits of all sizes serving many different constituents nationwide, providing a variety of consulting, auditing, and accounting services. For more information, please contact us at 703-834-0776 x8001.

Issues in Accounting for Nonprofits: Handling Revenue Recognition

Among the topics addressed with accounting for nonprofits, revenue recognition has been in the spotlight recently. With the recent FASB updates changing revenue recognition guidelines and standards for nonprofits, it’s more important than ever to be clear on how your organization recognizes revenue.

One area in which many nonprofits struggle is whether revenue should be recognized as contributions or exchange transactions. The determination between exchange transactions and contributions can be made by examining the differences between the two groups.

Exchange Transactions:

  • Resource provider states that it is providing a resource in exchange for benefits.
  • Payment by the resource provider equals the value of the assets to be provided by the recipient, not for profit (NFP) organization, or the asset cost plus a markup.
  • NFP is penalized for nonperformance or for not completing the project.
  • Assets are delivered by a provider to individuals or organizations closely related to the nonprofit.

Contributions:

  • The not for profit solicits for a contribution. It’s clear they are seeking contributions.
  • NFP is not penalized for nonperformance.
  • Resource provider states or insists that it is making a contribution.

As you can see between the two groups there can be some gray areas. That’s why many nonprofit accountants ask clients to bring in anything they aren’t certain of to ensure it’s recorded correctly. It helps to get a second opinion on many of these issues.

Difficult Judgment Calls

Sometimes, the judgment call between a contribution and exchange transactions can be difficult. Some accountants suggest having a consultation between auditors and preparers to ensure the information is clearly defined.

Conditional or Unconditional?

FASB Accounting Standards Codification (ASC) Section 958-605-25 asks that nonprofits wait to recognize contributions unless they are sure that all of the conditions around contributions are met. For example, if you’re running a matching donation program, wait to record the donations until the conditions of the match are met. Otherwise, you run the risk of having to correct numerous entries.

There are some examples when conditions can be so easily met that it is acceptable practice to report the contributions immediately. If the conditions of a donation are simple, such as a thank you letter or public acknowledgment, this can be made quickly and easily. It may be a simple matter to report the contribution immediately.

Another gray area may be the difference between promises to give and intentions to give. What’s the difference? Let’s say that someone calls a nonprofit organization and claims they will give it $10,000 in their will. That’s merely an intention to give. There is no binding, legal information holding that person to their claim. On the other hand, an actual will, filed in a court jurisdiction, that includes a legally binding statement of the gift of $10,000 may be accepted as a promise to give. In that case, it is now an obligation of a creditor. The estate is held to account and must complete the transaction, so the amount can be recorded by the nonprofit.

As you can see, there are many areas where professional judgment and discernment must be used to determine when, how, and why to record items in specific ways. Accounting may be viewed as a very black and white profession, and while it is true that $1 is $1 no matter how you look at it, the type and category under which that amount may be recorded may be subject to an accountant’s scrutiny and judgment.

That’s why it is so important with accounting for nonprofits to find a professional services firm that you can trust. Your accountant will make many judgment calls and help guide you through the many state and federal laws and guidelines to handle your nonprofit finances. With a good accounting firm by your side, you can rest easy, knowing that your finances are handled to the benefit of your organization and its constituents.

Beck & Company

Beck & Company works with nonprofits of all sizes serving many different constituents nationwide, providing a variety of consulting, auditing, and accounting services. For more information, please contact us at 703-834-0776 x8001.

The Truth About Payroll Taxes and Accounting for Nonprofits

There are many myths swirling about the nonprofit world when it comes to payroll taxes and accounting for nonprofits. Taxes are a hot topic for nonprofits because many nonprofit organizations think that ‘tax exempt’ means they pay no taxes on anything. Unfortunately, this myth can get you into some hot water with the IRS if you’re not careful. Even though nonprofits can be tax-exempt, not every item in your budget is exempt. Salaries and wages are one such item.

Accounting for Nonprofits: The Myth of “Tax Exempt Everything”

One of the benefits that nonprofits receive is the designation of being ‘tax exempt.’ This designation is received from the IRS for nonprofits who comply with IRS regulations regarding nonprofit status. The idea behind this rule is that nonprofits, by their very nature, funnel excess margin back into their good works to help their constituents.

However, tax-exempt does NOT mean tax-exempt everything. Certain items are still subject to taxation. One such item is payroll.

Nonprofit Payroll: Employee Taxes

Nonprofits are made up of volunteers, part-time employees, and full-time employees. Compensation paid to each type of worker may be subject to taxes.

  • Volunteers who are paid in gift cards and gifts may or may not have their compensation taxed It depends on the type, nature, and value of the gifts. Small, low-value gifts may be tax fee; gift cards may be taxed. Speak with a nonprofit accounting expert or CPA to determine whether or not such gifts are subject to taxes.
  • Part-time and full-time employees must pay social security and Medicare taxes. They must also pay personal federal and state income taxes even if the nonprofit they are working for is a tax-exempt entity.

Who’s on the hook if you forget to pay these taxes? Your Board of Directors is responsible for ensuring tax compliance on all taxable matters. If you are part of a nonprofit Board, be sure to look into taxation issues with the help of a good nonprofit CPA or tax accountant to ensure you are correctly following the laws and complying with all applicable state and federal laws.

What About Religious Nonprofits?

There are some exemptions that may apply to nonprofits. These include churches and certain church-controlled organizations. They can take an elective exemption from FICA taxes (social security and Medicare). Certain services performed by ministers or members of religious orders may also be exempt from FICA. And compensation paid to students by a nonprofit organization may also be exempt from FICA.

FUTA Taxes

In regard to FUTA taxes, the IRS states that “Religious, educational, scientific, charitable and other organizations described in section 501(c)(3) are exempt from tax under section 501(a) are not subject to FUTA tax and do not have to file form 940.” In order to qualify for this exemption, such organizations must receive a favorable determination letter from the IRS to qualify for this exemption. It’s not automatic; you must apply for and receive a favorable determination letter from the IRS.

Confused About Accounting for Nonprofits? Contact the Experts

All of these exemptions and rules apply on the federal level; states may have another set of rules that guides tax exemption items for nonprofit organizations. That’s why it’s important for you to have a local nonprofit accounting firm to work with who understands both federal and state tax rules and how to correctly apply them to your organization. Accounting for nonprofits can be complex. It is helpful to have experts by your side to navigate the financial waters safely.

Beck & Company

Beck & Company are Washington DC nonprofit advisors. We also are Virginia certified nonprofit accountants. We work with nonprofits of all sizes serving many different constituents nationwide, providing a variety of consulting, auditing, and accounting services. For more information, please contact us at 703-834-0776 x8001.

Improve Accounting for Nonprofits Communications with the Right Software

It’s hard to imagine it, but accounting for nonprofits can be even easier and better when the right software is in place. The right software facilitates communications among departments and fosters trust and collaboration. This is especially true with fundraising and accounting.

The fundraising and finance or accounting departments in your nonprofit organization often seem like two sides of opposing football teams. Each one wants “the ball” or the forward momentum on a project, and neither understands why the other doesn’t want to give it up and play along with them. Eventually, frustrations develop, and groups may back into their silos until communications improve.

It doesn’t have to be that way. Accounting for nonprofits works much better when both finance and accounting work together towards mutual goals and with equal respect and understanding. That begins with clear communications.

Causes of Miscommunications

Anytime you have two people speaking, there’s a chance for a miscommunication. Whether it’s in the message, the medium, or how it is delivered, miscommunications happen all the time. They are quite common between finance or accounting and fundraising.  Some of this stems from not understand what each party does in the organization at large. There are some things that each group would like you to know about their work.

The fundraising group wishes that finance could…

  • Understand how challenging fundraising can be.
  • Acknowledge that to make money for the organization, you must spend money.
  • Trust the process of donor relationships to come to fruition and provide funds for the organization
  • Offer flexibility with deadlines, requirements, and requests.
  • Appreciate the effort that goes into fundraising.

And finance wishes that the fundraising team could…

  • Respect that their job is complex and demanding, often dictated by legal requirements that have no flexibility.
  • Ask for their expertise and help in accounting and finance matters.
  • Provide information proactively so that finance can do its job easily.
  • Understand basic accounting practices so that we “speak the same language.”
  • Adhere to deadlines.

It’s easier to come to consensus when mutual respect underscores the relationship. Knowing what the other party needs, why they need it, and how your actions impact their work can go a long way towards creating mutual respect and clear communications.

Similar Challenges Face Fundraising and Finance

Although the fundraising and finance teams each perform different functions in an organization, they face similar challenges. Data, provided by the right accounting for nonprofit software and systems, can create a shared understanding upon which clear communications rest.

The right software can provide data to both groups so that they cannot back into their own silos and retreat with their information. Information is easier to share, and easier to use for collaboration. Both groups must trust and depend upon one another to complete projects and tasks.

Some areas where this shared data can make a big impact include activities that:

  • Collaborate on budgets and tracking.
  • Improve reports and reconciliation of financial information.
  • Jointly plan and set goals.
  • Establish frequent, timely communications.
  • Identify ideal processes and procedures.
  • Integrate fundraising and accounting software.

Resolving the Challenges

Fundraising and finance may often feel like competing teams, but they should be both rooting for the home team, or working towards their company’s overall goals. By understanding one another’s work, sharing data, and experiencing the benefits of shared data and systems, the two teams can work more effectively and help your nonprofit achieve its mission.

Beck & Company

If you struggle with your accounting for nonprofits, Beck & Company can help. 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.

Accounting for Nonprofits: Changes to FASB Guidelines

Accounting for nonprofits must include clear, transparent reporting in order to paint an accurate picture with their numbers for members, donors, and the public. Although most nonprofits strive to do this, the Federal Accounting Standards Board (FASB) made some changes to enhance clarity and transparency on their annual reports. These changes, known as Accounting Standards Update No. 2016-14, change a model that has been in existence for over 20 years.

Here’s a rundown of the changes in accounting for nonprofits according to the new ASU 2016-14:

  • Reducing the number of net asset classes from three to two;
  • Continue allowing preparers to choose between the direct and indirect method for presenting operating cash flows;
  • Eliminating the requirement for those who prefer the direct method to perform reconciliation with the indirect method;
  • Reporting by nature and function, as well as reporting on liquidity risks and liquid available resources, as discussed in the ideas shared here.

While these changes may not seem earth-shattering, they do help you communicate better with others reading your financial statements and clear up several misunderstandings and points of confusion in nonprofit accounting statements. The goal of the FASB efforts it to make murky areas clear and the new standards seem to do just that.

Numbers Tell a Story

The numbers that your nonprofit organization shares with the public tell an important story. They relate how your organization gathers resources, accepts donations, and spends its money. People who donate or join your organization need to understand that story in order to make smart decisions about their money.

In recent years, many nonprofit organizations have come under fire for what is perceived to be excessive spending. Lavish entertainment, trips, and unnecessary meetings (especially in exotic locations) are red flags to donors who want to be sure that their money goes to the activities the nonprofit supports, not to someone’s trip.

Although nonprofits remain free to spend their resources as they see fit, the new ASU guidelines will make it clear how they have spent their resources. Their ‘stories’, so to speak, will now be told loud and clear.

Additional Qualitative Information

Additional qualitative information about how nonprofits manage liquidity and liquidity risks can also enhance your communications with others on your finances. The updated regulations also require reporting of expenses by both function and nature. These two areas can be used to share more information with constituents about how money is spent, thus clarifying the information and enhancing transparency

Reporting expenses by both function and nature enable you to tell people more about the work that you are doing.  The functional areas can help them understand the areas of your organization. Additional details can be provided to help donors understand the various activities supported by these funds.

When Do the Changes Take Effect?

The changes recommended in ASU 2016-14 take effect in financial statements issued for fiscal years starting after December 15, 2017. They also take effect for interim periods within fiscal years beginning after December 15, 2018. Application to interim financial statements is permitted, but it is not required in the initial year of application. Early application of the standard is also permitted.

Accounting for Nonprofits with Beck & Company

The new accounting standards for nonprofits may seem confusing to apply to your organization. If you have any questions, Beck & Company is here to help. 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.

Apps for Accounting for Nonprofits: Apps that Make Your Life Better

The smartphone revolution has brought with it apps for accounting for nonprofits that can make your work life faster, more productive, and efficient. There are apps for everything from the local weather to daily inspirational readings. But for accounting for nonprofits, there are certain apps that you’ll want to add to your smartphone that provide a lot of information with the touch of a button.

Notability

Noteworthy is like a doodling pen and an online notebook all in one. With Noteworthy, you can take notes by typing or add drawings to your notes. It’s flexible and great for creative types who want to brainstorm via their smartphones or add to notes during meetings.

Notability may be downloaded for Apple devices from Ginger Labs.

Evernote

Evernote for Android and iOS is how many accountants are going paperless these days. It’s a great place to store, organize, and record notes. These notes can be videos, photos snapped with your smartphone of documents, handwritten notes, or typed notes – Evernote can handle it. It collects, stores and organizes the information in ways that are natural and intuitive, so you can easily find it again. A great tool for organizing much of your work and projects.

You can download Evernote from many online sources.

TripIt

Travel frequently for business? TripIt is the app for you. TripIt lets you organize air, car rental, hotel and other information into a simple itinerary and keep it all in one place. You can even include maps to help you find conferences, hotels, and client offices. The pro version includes details on baggage claim at airports, flight status, and other useful tools.

Download TripIt today.

Tallie

Accounting for nonprofits may include preparing expense reports. Tallie is an app that makes it easier and faster to repair expense reports. Log expenses in on your smartphone and Tallies does the rest.

Find Tallie for iOS and Android on your favorite appstore.

Flipboard

Need to keep up with the latest business journals, world needs, or industry-specific news? Flipboard is an app that creates a unique “magazine” subscription for you. It scours the internet for topics related to your inputs and builds custom magazines based on your interests. It can also follow specific journals and pull information into your account so it’s all in one place.

Download Flipboard today.

Social Media Apps

Interacting with your members, donors and constituents via social media has never been easier. Download and use the Twitter, Facebook or Instagram apps. With a few taps you can respond to inquiries, share images, and update people about important events – all from your smartphone.

There are hundreds of apps online today and more to come. As apps become more sophisticated, they provide us with even more tools to grow our businesses. Download these or other apps from your favorite appstore and make your smartphone your new personal assistant.

Beck & Company

If you struggle with your accounting for nonprofits, Beck & Company can help. 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.

Accounting for Nonprofits: Setting Transfer Pricing Policies

Accounting for nonprofits should including setting fair transfer pricing policies for organizations that buy and sell goods or services internally.

Transfer pricing is simply the price set for one division of your company to charge another in the event that it must ‘sell’ or set a price for its goods or services to another group internally. For example, if your creative services department is paid by members for graphic design services, you may also set an internal transfer price for their services so that if your membership division requests graphic design work, the number of hours spent on an internal project can be on the books in a similar way to an external paid request.

The problem with many transfer pricing situations is that the internal department selling the goods or services has an incentive to change the full amount, while the group purchasing it has an incentive to seek lower costs. The two may have difficulty negotiating prices since negotiations do not serve either party’s best interest. Instead, the purchasing group usually capitulates and pays more than it should for a service internally than they could get from an external source.

In order to make transfer pricing work, as part of accounting for nonprofits, the following tips and strategies may be helpful.

  1. Enable better decision-making on internal pricing transfers: Smart accounting for nonprofits starts with accurate data. To make better decisions around setting prices, you must first have an accurate depiction of the costs that go into the goods being priced. This is where having a good nonprofit financial accounting system helps because it is easier to extract data from such systems and analyze it to build price points.
  2. Build fair transfer-pricing policies: Written policies prevent miscommunications and mishaps during transfer policies. They also help organizations and companies set fair prices for all. A written policy can clarify how transfer pricing agreements can be reached and how to conduct internal transfers.
  3. Assess autonomy levels: Some companies do well with a high degree of autonomy granted to both parties during a transfer negotiation. Assessing and understanding how much autonomy is healthy for your organization is an essential part of setting transfer pricing policies.

Why Bother with Transfer Pricing?

Accounting for nonprofits must include accurate depictions of both revenues and expenses, as well as labor costs, in order to make fair calculations. Without knowing what your transfer costs are, you could miscalculate and under- or over-estimate costs for your organization. Transfer pricing makes things fair, balanced, and transparent in your financials.

Recently, the IRS has also stepped up its review of nonprofit compliance with transfer pricing rules. Organizations that do not have documentation regarding their transfer pricing policies and rules may come under additional IRS scrutiny. Adjustments, penalties, and loss of tax-exempt status may result if the IRS investigates and finds your organization’s transfer pricing inadequately documented or handled. It pays to be proactive and take steps now to create the rules and documentation necessary to clarify how it is handled.

Although transfer pricing is most often thought of as a way to improve tax tracking and reporting, especially in cross-border transfers, it is also an integral part of accounting for nonprofits. Understanding and managing transfer pricing can help your nonprofit improve its financial management and compliance with taxation and financial rules and guidelines.

Accounting for Nonprofits with Beck & Company

If transfer pricing and other accounting for nonprofit topics are confusing for your organization, or you require audit assistance or other nonprofit accounting services, contact 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.

Accounting for Nonprofits Update: The Brave New Work of Mobile E-Commerce

Accounting for nonprofits changes as times change. Nowhere is this more apparent than in how people shop. Since many nonprofits also sell goods, it’s important to know how shopping patterns are changing and how your nonprofit can keep up to date.

The past decade has seen a complete change in the way people shop for goods and services. Less than 100 years ago, people shopped at multiple, local single stores for items like clothing, shoes, furniture, groceries and more. Then came the big shopping malls, department stores and supermarkets, which promised convenience by gathering many goods in one location.

But the internet changed everything. Now you weren’t just limited to what you could find locally or through mail order catalogs. A virtual world of good was available at the touch of a button. E-commerce was born, changing how people shopped forever.

Because the only thing that’s constant is change, the world is undergoing another shift today: mobile commerce. Like its predecessor e-commerce, mobile commerce relies upon online transactions. Instead of logging in through your desktop computer, however, mobile commerce uses the smartphone or a mobile device to facilitate the transaction.

Mobile Usage Growing

According to the Pew Center for Research, smartphone use is up again throughout the United States. Their research states that 95% of Americans now own a cell phone of some type. Among those who own cell phones 77% own a smartphone. That number has grown 35% since the first survey about smartphone use was undertaken by Pew in 2011.

Many smartphone users access their devices for everything, including internet use, banking, shopping, and phone calls. Some do not have broadband access but rely upon smartphones for internet connectivity. This trend is expected to continue to grow, with more people relying than ever before on their smartphones.

What does this mean for your nonprofit? It means that if you aren’t onboard with the mobile evolution, you may be left behind – and leaving behind those you serve, too.

Accounting for Nonprofits and the Mobile Evolution

As more people join the mobile evolution and become wedded to their smartphones, nonprofits must also keep pace with these developments. This includes:

  • Opening mobile-optimized e-commerce stores: A website must be optimized for mobile viewing so that it changes it loads more quickly and with less data usage on a mobile device than it does on a laptop or desktop. This “responsive” website may already be built into your current site, or you may need to update your site so that it is responsive. A responsive site will help your nonprofit sell more, interact better with members, and accept donations via smartphone.
  • Create and launch mobile donation campaigns: Accounting for nonprofits includes fundraising. Campaigns aimed at mobile users include faster, shorter messages and other enhancements targeted at mobile users.
  • Add apps: Larger nonprofits may be able to afford the development of apps for their constituencies. Apps provide shortcuts for mobile users to your site and may be a valuable addition for improved interactions.

Nonprofits must keep abreast of technology updates affecting their members, donors, and supporters. If not, they are at risk of being left behind and having followers turn to other groups. Having a practical understanding of technology isn’t just a nice thing now, it’s a must-have. And for those working with accounting for nonprofits, an important commitment to the financial health and success of your organization.

Beck & Company

If you struggle with your accounting for nonprofits, Beck & Company can help. 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.

Great Ideas for Accounting for Nonprofits: The Policies You Can’t Live Without

Companies of all sizes have a written employee handbook that governs all aspects of employment. It doesn’t matter whether you have one employee or 100 employees – having a written handbook can help you avoid many common misconceptions that can lead to unpleasant employee relations and occasion more serious issues such as discrimination lawsuits. Among the many great ideas for accounting for nonprofits, creating an employee handbook can help everyone understand the company’s guidelines.

Five Points to Include in Your Employee Handbooks

A written employee handbook usually includes several points. Some are generic to most employers while others may be specific to your organization. The following five points are usually found within most documents of this type.

  1. Anti-Harassment Policy: Every employee handbook should include an anti-harassment policy. Such a policy clearly states the definition of harassment, and states unequivocally that harassment within the organization isn’t tolerated. It should also include steps for handling harassment, who employees can report harassment to, and consequences for those engaging in harassing behavior.
  2. Working Hours and Pay Practices: It is important to clearly state the hours your company is open and the hours employees are expected to work. Include information about scheduled breaks and meal times. Make sure that break and meal times meet federal and state guidelines for workers. The workweek should be fined, with overtime definitions explained. The pay scale for both regular and overtime work should also be defined. Such policies can help you avoid costly wage disputes later.
  3. Leave of Absence: State whether employees are entitled to medical leave under the Family Medical Leave Act. Include details on how employees can request such leave, how much notice is required, reasons that qualify for leave under the act and other parameters for leave. If your company isn’t covered under FMLA but you do offer medical leave, include details on your company policy here.
  4. Employees with Disabilities: State how employees with disabilities can request confidential accommodations for their disability under the Americans with Disabilities Act. Include details on who they should speak with and other information on how your company complies with the act.
  5. Drug and Alcohol Policies: You should include information on your company’s drug and alcohol policies. In states where certain drug use is permitted, this is critical. Drug testing information should be included, and information on whether drug tests will be given prior to employment, at random, after an accident, etc. Additionally, you may also wish to include information on how to report potential substance abuse problems and what help is available for employees who may have a substance abuse problem.

Written Policies Prevent Misunderstandings

It’s surprising how often companies neglect to create employee handbooks, or they do not update what they have. As leaders in the accounting for nonprofits field, it is up to us to ensure that the organizations we work for have the best resources at hand to manage their finances wisely. An employee handbook can help with that in many ways.

  • Clear, unambiguous policies are less likely to put your organization at risk for a lawsuit.
  • Grounds for termination due to drug or alcohol violations can also be shared so that they are quite clear to all who work for the organization.
  • Overtime pay rates are clear for all in the organization.

Employee manuals and handbooks can’t keep your organization from every potential pitfall, but they do go a long way to ensuring clear communications for all.

If you struggle with your accounting for nonprofits, Beck & Company can help. 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.

Why the “Right” Relationships Matter for Accounting for Nonprofits

Do you have the ‘right’ relationships as part of your accounting for nonprofits?

We’re not talking about knowing the ‘right’ people – the smart people, the rich donors, or those who can provide services to your nonprofit, although such relationships are, of course, important.

Instead, we’re talking about a wide circle of relationships that provides feedback, including contrary feedback, a rich resource of new ideas, and the ability to introduce you to people beyond the scope of your existing work.

The right relationships are those that broaden your horizons, expand your work, and help you reach into new areas to improve, build, and develop.

Let’s take a look at the concept of relationships and how the ‘right’ relationships build your nonprofit’s work.

The Current Echo Chamber

If you’re like the majority of people, your connections on social media tend to fall into three camps: business associates, family, and friends. It’s the rare person who reaches outside of their immediate circle and seeks to connect with others.

Unfortunately, such a narrow circle of connections leads to the ‘echo chamber’ effect. People we know in daily life tend to reflect similar values and ideas back to us rather than confront and challenge us.

When you browse through your connections, if everyone in your immediate circle is connected somehow, or you spend a great deal of time with them daily, then you aren’t reaching out to people from whom you can learn. You’ve fallen into the echo chamber – and it’s time to climb out!

The Value of New Connections

It’s natural for people to be drawn to others with similar likes, dislikes, and interests. That’s how we initially learned to make friends, and similar interests bring people together over hobbies, social gatherings, church functions, and other places to meet people.

The problem with connections who share so many interests is that you never leave your comfort zone. If everyone in your immediate circle of friends is connected, there’s no one new who can reach outside and connect you to new networks of people.

New connections can help you…

  • Open doors: Looking to connect with a specific donor? Seeking to broaden the geographic area in which you currently work? People in your network may be able to introduce you to the right donors, help you find good places to spread your nonprofit’s work, and expand into new areas. When you move outside of your existing network, new opportunities may be just around the corner.
  • Seek new perspectives: When you meet new people, their viewpoints may contradict yours, but if you’re open to discussion they can help you see and understand new perspectives. This may give rise to a new way of looking at a project or different way of viewing the world.
  • Find new vendors: Connections are a great source of information to find new vendors, consultants, and partners for your nonprofit. They may also be a good resource to check references on vendors you are considering for work.
  • Hire new people: Another great way that a wider, different circle of associates can help you is by sharing job openings with their network to help you find the perfect employees for open positions. Many positions are filled today via word of mouth rather than through classified ads. Finding someone through your network has the added advantage of a personal recommendation from an associate, too.

Relationships matter. Even in today’s increasingly internet-driven world, where we often Skype, tweet, and comment rather than sit down over a cup of coffee with someone, relationships broker trust, enhance your knowledge, and help you and others in this world. Build the ‘right’ relationships by seeking new people with whom to connect, share, and network.

Beck & Company: Accounting for Nonprofit Success

If you struggle with your accounting for nonprofits, Beck & Company can help. 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.