Are You Feeling Overwhelmed Performing Accounting and Tax Service for Nonprofits?

Are you feeling just a little overwhelmed performing your own accounting and tax services for your nonprofit?

A Forbes survey found that 14% of nearly 3,000 people surveyed worldwide feel chronically overwhelmed. If you are, you’re not alone. Feeling overwhelmed is common today.

Oh, and by the way – the age bracket feeling the most overwhelm? Those 41-50 years old, or roughly, the age bracket for most senior nonprofit financial management types.

But it doesn’t have to be that way. We’re guessing you went into nonprofit financial management because you love finance, accounting, and the mission-driven culture of a nonprofit organization. You can rekindle that passion for your work again and manage that feeling of overwhelm with a few simple steps.

The Myth of Multi-Tasking

In the book “Scrum: The Art of Doing Twice the Work in Half the Time”, authors Jeff and J.J. Sutherland provide insight into why many people feel overwhelmed. They are trying to multi-task, thinking it boosts productivity. Their studies indicate the opposite.

A chart on page 91 provides statistics that indicate that as one’s attention is divided, productivity decreases. Working on two projects at once means a 20% loss in productivity due to switching gears; three projects at once, and you lose about 40% due to context switching. Context switching leads to feeling overwhelmed because the mind is never at rest, confident it can finish a project. It’s always jumping to the next open action item – which in turn makes you jumpy!

Accounting and tax service for nonprofit providers and nonprofit financial management professionals aren’t immune to this lost productivity. They may actually be at greater risk for lost productivity due to context switching due to the amount of concentration required to process accounting and financial data.

In addition to the focus needed to do your job, something is always clamoring for your attention. Messenger apps, emails, phone calls, colleagues dropping by your office – it’s a never-ending barrage of items competing for your attention.

Focus on One Thing at a Time

Multi-tasking doesn’t work. It’s a lie. So why do we buy into it?

We think it should work because, after all, if you’re busy working on seven tasks, that’s seven projects underway. However, time and time again, studies demonstrate that it is better to have one open task, complete it, then turn your attention to the next one.

Commit to single-tasking rather than multi-tasking. Turn off the television or music while you work. Shut down the instant messenger apps and sounds that ping and bong when emails arrive. Focus on one thing at a time.

Build a Set of Rules

Do you have an open-door policy? That’s a useful and common management technique. However, it can lead to people interrupting you and breaking your concentration. It is helpful to build out a set of rules and guidelines for your team so they know when they can interrupt you.

Some managers choose to post ‘office hours’ or leave their door open as a signal to their staff that they may interrupt them. Another technique is to use a shared calendar such as Google Calendar or an Office calendar and post your office hours there while blocking out time for work requiring deep concentration. Experiment to find the method that works the best for you.

Yes, You Can Turn Off Your Phone

Nearly everyone carries a cell phone today. It makes it convenient to call someone for a quick answer, dial AAA when your car breaks down, or find your coworker after hours. It can quickly turn into an invisible umbilical cord connecting you to the office 24/7. Cut the cord. Tell your coworkers you plan to switch your phone off at night and follow through. Make the hours after 7 p.m. or whatever time you choose “off limits” so you get some downtime.

You Have Permission to Take Vacation, Weekends Off, and Holidays 

Nonprofit accounting and tax professionals often work long hours right before tax season. That may be inevitable. At other times of the year, those extra hours may be unnecessary. Take a vacation, weekends off, and holidays.

Workaholics are lauded in American culture, but they also get sicker faster and burn out. Don’t be a statistic. Close the office door, turn off your phone, and head to the beach or the mountains so you give your mind and body a rest. You’ll be better off for it, as will your nonprofit organization if you return refreshed.

Beck & Company

Beck & Company is an independent certified accounting firm offering accounting and tax service for nonprofits, nonprofit financial management, auditing services and more. Since 1987, we have helped many nonprofits in the Washington D.C. area and along the Eastern seaboard with their accounting and financial management needs. We provide audit, tax, accounting, and consulting service that addresses all aspects of a small to mid-sized nonprofit organization’s business. Contact us or call 703-834-0776 x8001.

Accounting for Nonprofits: Close the Book on It!

Preparing Your Books for the End of Year Close

‘Tis the season – the season when nonprofits everywhere start thinking about year-end close. This year, vow that you’ll do all you can to smoothly and efficiently close the books with minimal stress to your accountant. Accountants everywhere thank you.

In all seriousness, there are many reasons why doing a good job preparing your books for the end of year close is important. Without closing your books for the year, you’ll have no idea if your nonprofit was profitable or not. Closing the books and reconciling them means that you’ve tallied up everything for the end of the year, put a period or end point on it, and start with a fresh slate in the new year.

Register for this Webinar Now: The Modern Day General Ledger – Leveraging Cloud Technology for Nonprofit Accounting.

Closing the accounts for the year reset the revenue and expense lines to zero. These ‘temporary’ accounts are now ready for the new year, a clean slate, and a new eye to profitability. Without closing your books, you’ll have a muddle of data to assess, and you won’t get a clear picture on how well your organization achieves its financial goals during the year.

Accounting for Nonprofits: Tips for Success

There are certain steps you can take to successfully close your books for the end of the year. This includes:

  • Keep your accounts updated: Schedule time monthly to reconcile expenses and income. If you let it all pile up to the end of the year, it will feel overwhelming. There’s also more of a chance to make mistakes and forget items.
  • Create a checklist: A detailed and thorough checklist that details every step for your year-end close is a helpful resource. Such a process can guide you through the close out each year and save time.
  • Ask questions during the year: Hopefully, you have a great certified nonprofit accountants to work with, someone who knows your nonprofit and is open to questions. Don’t let questions delay your routine accounting practices. Ask questions throughout the year so that you don’t let mistakes proliferate.
  • Schedule plenty of time for your audit: Dovetail your end of year close with audit prep, but leave plenty of time for your audit. By doing both at the same time – audit prep and end of year close – you’ll be well-prepared for the new year.

Pay Bills, Lower Receivables

Another useful end of year task to tackle before reconciling and closing your books is to pay off any outstanding invoices so that you carry fewer into the new year. You should also review your accounts receivable file, and attempt to collect any past due invoices. You can certainly carry these over, but it is always a good idea to avoid open receivables. The fewer receivables you have, the more income your nonprofit has at the ready.

While closing out your books may not be top of mind as you celebrate the holidays, tackle the tasks early enough in the month so that you can get them done while people remain in the office. Note when your accounting team may be taking time off to travel or celebrate the holidays, and work around their schedules. You can complete your end of year close with plenty of time to enjoy the festivities of the season.

Beck & Company

Beck & Company provides nonprofit accounting and audit services in Washington, D.C and Virginia. Founded in 1987, we specialize in the world of nonprofit institutions, helping them to navigate the complex world of finance and accounting. Our services are always personalized, and cost-effective for your institution. We welcome your inquiry or call.  Contact us today or call 703-834-0776 x 8001.

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.

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.

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?

  1. 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.
  2. 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.
  3. 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.
  4. 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.

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

Training Your Team for Fund Accounting Systems: Tips for Successful Implementation

It’s go-time, and your staff is excited about the new fund accounting systems you’ve put into place. But wait: before launching the new system, have you made plans for training everyone on how to use the new fund accounting system?

Training, it seems, is often an afterthought when it comes to new software launches. Managers, IT staff, and everyone involved with selecting, implementing and using the new software should be involved in the training. Here’s how you can learn from adult educators on the best ways of engaging users in your new fund accounting system.

#1: Sell the value.

Even before you invite the team to a training meeting, you need to ‘sell’ them the value of the new software. Unlike children, who learn out of curiosity or obedience to authority, adults learn best when they perceive the personal value of anything they are expected to learn.

The staff of your organization must know right from the start why you’ve chosen the new software and why this particular product from among many fund accounting systems. How will it help them with their daily work? Will it solve problems, increase productivity, work smarter or faster than what they’ve used before? It’s only by answering these questions upfront will you grab their attention for further training.

#2: Keep training sessions focused on what users need to know.

Users need to know precise information to help them do their jobs well. They don’t need to know the history of the product, or the bells and whistles that so excited your CEO. They want to know now how to use it to do their jobs better. Focus your training on immediate activities the group can do to use the new software.

#3: Use it or lose it.

Another truism with adult learners is that they must use their newfound knowledge immediately or else it is forgotten. Adults need to use new skills repeatedly in order to keep them fresh. Schedule training sessions with the new fund accounting system where users actually bring in their projects and work so that the training can focus on job-related skills, and users can ask questions while actually using the system for real work.

#4: Customize vendor trainings.

Vendor trainings can be a great asset, but you may need to customize a vendor training session to your organization’s needs. You know your team. They may respond best to written materials, hands-on demonstrations, or simple verbal instructions. Work with your software vendor to tailor training needs to your team.

#5: Schedule follow up.

Many training programs fail because trainers pour information out and then leave without follow-up. Users leave the session invigorated and excited, but stumble using the new system when they return to their workplace. To keep the momentum going after training, schedule follow-up meetings a week or two after the initial training. Invite users to bring questions to the meeting so that you can help them use the system to its fullest.

Ready for New Fund Accounting Systems?

At Beck & Company, we understand the unique needs of the nonprofit sector. Our CPAs and consultants have been assisting nonprofits since 1987 with their accounting and operational needs. If it’s time to implement a new fund accounting system, please contact us for assistance. Call 1-703-834-0776.

FASB Set to Release Nonprofit Accounting Changes Summer 2016

The Financial Accounting Standards Board (FASB) is set to release the first wave of nonprofit accounting changes during the summer of 2016, according to an article in Accounting Today.

The article indicates that FASB has completed its assessment of the feedback received on Phase 1 of its intended changes. The organization appears ready to release the first set of accounting standards changes that will guide nonprofit organizations in the near future.

The changes are expected to significantly affect the way nonprofits report net revenue, as well as other less significant changes impacting how nonprofits report and account for their finances. This is the first major overhaul of the nonprofit accounting guidelines in over 20 years. The overhaul came because FASB recognized the changing face of the nonprofit sector, with newer types of nonprofits requiring a different view on accounting standards.

Nonprofits Prefer to Stay Flexible, In-Sync with For-Profit Accounting

One thing that surprised the people at FASB was the outpouring of feedback they received from the nonprofit sector. Typically, the standards board receives only a smattering of feedback when it requests public input. The nonprofit sector sent in 250+ letters detailing feedback on the proposed changes.

The biggest request was that FASB retain the flexibility it has previously allowed in nonprofit reporting. Another request that came over loud and clear was the desire for nonprofits, in similar industries as for-profits, to continue using accounting methods and standards in line with the industry itself, rather than based on tax status.

The goal of keeping both for-profit and nonprofit accounting models in sync is to keep their reporting methods clear and easily understandable by most people. Because many people are at least familiar with basic accounting concepts used by for-profits, by keeping the nonprofit model similar, donors and the general public can better understand the finances of nonprofits. Transparency is maintained as it pertains to financial records because the information can be understood more easily.

The Rollout Schedule: What to Expect                                                                     

As Phase 1 begins rollout this year, it will impact reports generated starting December 2017. Financial statements for the fiscal year ending December 2017 should follow the new guidelines, with early adoption permitted.

The Big Change: Two Net Asset Reporting Categories Instead of Three

The biggest changed planned for Phase 1 includes condensing the three net asset reporting categories into two. The current categories include unrestricted, temporarily restricted and permanently restricted. The two new categories will be donor restrictions and without donor restrictions. The “without donor restrictions” category replacing the former unrestricted category.

Other areas impacted by the changes include some minor tweaks in the reporting of investment returns, as well as liquidity and availability.

Help Navigating the Changes

An upcoming webinar will be discussing how the FASB and IASB have released a new revenue recognition standard – which will dramatically impact the financial processes of software companies. Although the effective date is several quarters away, you need to begin taking action now. Click here to register for the New FASB Rev Rec Standards, Actions You Should Take Now Webinar on Thursday, June 16th at 11 AM PT/2 PM ET.

It can be difficult to discern which changes may truly impact your nonprofit organization and which may be considered and evaluated for your particular needs. The professional CPAs and consultants at Beck & Company can assist you through these changes, helping you update your accounting standards to reflect your nonprofit’s financial models and goals. We invite you to contact us to learn more. Call us at 703-834-0776.

Nonprofit Accounting Best Practices: Automating your Processes

We have come to our final blog in this series on nonprofit accounting best practices. Thus far, we have reviewed some key areas that we hope you’ll put into your plans as you prepare for future growth. This week’s focus is nothing short of critical to the flow and infrastructure health of your organization, automating your processes.

As nonprofits, we focus on expanding programs and services, reducing costs, increasing return on mission, and strengthening donor loyalty – all of which is good stewardship. That’s really what automation of processes is all about: doing more and creating greater impact with less.

We started this series talking about outcome measures. It’s pretty clear from funder prioritization and requirements that monitoring, measuring, and sharing key metrics are critical. But this requires efficiency and automation of processes. If you want to ensure high program efficiency metrics, you have to create the productivity savings, via automation, to reduce the proportional costs of overhead to program investment.

Here’s a specific example – let’s say you want to improve internal controls and reduce the inefficiencies of your manual purchasing system. By utilizing automated workflows in a best in class fund accounting solution, you will save time, paper, and frustration. Automated purchasing workflows will give you notification (on any device) that you have a pending electronic purchasing requisition or PO for approval. As you approve vendor payments, you can drill right into the original document to see the invoice. Payments are point and click. Reporting and visibility are instant.

Another example might be your audit. Is it taking too long and costing too much? In an automated environment, you can create a dashboard for your auditors that give them view only access to key reports and documents – right from their office. They can drill right into the source documents and you save travel, delays, and costs.

When you begin identifying your goals, priorities, and strategies, select some best practices to implement in your organization. It’s extremely helpful to define, track and measure results so that you can identify your savings and efficiency gains. Get familiar with the technology tools available to help you increase stewardship while decreasing costs.

Questions or comments regarding automating your processes? Please reach out to us. You can also follow us on Twitter (@BeckCPAs).

At Beck & Company we specialize in not-for-profit accounting and auditing. We understand the unique challenge of balancing the needs of your various stakeholders – contributors, members and your board, too. We have experience serving not-for-profit organizations such as unions, homeowner’s associations, religious organizations, charities, and social service organizations. If you have any questions regarding the filing of your form 990 we are here to help. Contact us today for more information.

Nonprofit Accounting Best Practices: Scaling for Growth and Impact

For several years now, we have seen the demands for nonprofit services increase rapidly, oftentimes exceeding capacity. Nonprofit organizations are focused on meeting the needs of their constituency while increasing impact. Some of the challenges get raised when organizations are planning to effectively scale for growth and impact. With the ever changing and growing needs, how are nonprofits adapting?

We’re seeing more mergers between nonprofits as well as new partnerships and collaborations. Some of these partnerships are with social enterprise organizations, some with other nonprofits, and others with community entities. With increased competition for funding and donors, nonprofits are learning to partner, narrow the focus of their mission, and adopt critical tools to ensure mission success and growth.

While growing to broaden the scope of your mission is a very good thing, it also brings new challenges. You have multiple funding streams, demand for deeper visibility, more grantor requirements, and increased compliance and reporting requirements. You may add new locations, programs or initiatives. It’s vital to plan for your growth and your expansion beyond the startup mode. Most nonprofit organizations start out utilizing small business tools to manage the organization. Once growth and expansion starts to kicks in, nonprofit orgs begin to experience the pains and limitations of ‘startup’ tools and resources.

In our last two posts, we shared information with you related to outcome measures and funding diversity. These two areas are critical as you plan and prepare for growth. Once you start tracking and measuring outcomes and increasing the diversity of your funding – you will quickly see the need for a best in class financial management solution – that will allow you to leverage modern technology to strengthen your visibility, transparency, automation, efficiency – and of course – your stewardship.

As your organization starts to thrive and grow, don’t think it will just happen on its own. Plan and build your strategy to accommodate the growth in a sustainable way. Nonprofits need the leverage and benefits that modern, best in class fund accounting affords. Whether through automation and visibility, or transparency and reporting – make sure that you equip your nonprofit with the tools that will allow it to thrive, grow, and maximize impact.

Questions or comments regarding scaling for impact and growth? Please reach out to us. You can also follow us on Twitter (@BeckCPAs). Check back next week for the final post in our series, where we will focus on automating your processes.

At Beck & Company we specialize in not-for-profit accounting and auditing. We understand the unique challenge of balancing the needs of your various stakeholders – contributors, members and your board, too. We have experience serving not-for-profit organizations such as unions, homeowner’s associations, religious organizations, charities, and social service organizations. If you have any questions regarding the filing of your form 990 we are here to help. Contact us today for more information.