Nonprofit Accounting Blog

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

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

The following provisions have already become effective:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Focus on Improving Content

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

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

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

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

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

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

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

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

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

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

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

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

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

The running of a small business requires more than just knowledge of the trade; it requires knowing how to manage your expenses and set clear budgets. Budgeting is crucial for the success of any business. Knowing how to estimate and match your expenses to your revenue helps you determine whether or not you have enough money to fund operations, expand your business and generate profit. Without a budget in place, businesses run the risk of spending more money than they take in or not investing enough in the prospect of growing the business.

While every business has a slightly different way of creating and maintaining a budget, there are some key practices that companies should follow when attempting to create their budget. The following tips were created to help small businesses finesse the perfect small business budget.

1. Check Industry Standards
   While every business is different and unique, there are always similarities between any type of business. Research the industry, speak with business owners in your area and check the IRS website to get a clear picture of what percentage of the revenue coming in should be allocated to each cost area. As you get a good look at industry standards, remember to look at for an average, not specifics.
2. Create a Spreadsheet of Estimated Costs
   Create a spreadsheet to estimate your business’ total cost and the percentage of your revenue that will need to be allocated toward raw materials and additional costs. Contact suppliers prior to working with them and get an estimate of their costs. If you are just starting your business, do the same thing for rent, insurance, taxes, etc.
3. Prepare for Changes in Your Budget
   Remember that these are estimates, not figures that are set in stone. Just because you estimated that the business would generate a certain rate of revenue growth or that certain expenses would be fixed or controlled doesn’t mean that it will happen. The business world is always changing and companies need to be prepared for whatever comes their way. It’s wise to factor in some breathing room in your budget and make sure that you have enough money to cover expenses before deciding to expand or hire new employees.
4. Cut Costs When Times Get Tough
   Consider cutting your costs when times get tight. Start with the items that can be controlled to a large degree. Ask yourself the following questions:  What costs can you cut back on without affecting your company’s revenue generating capability? What costs can you better control in order to cut costs?In addition to cutting costs, you should wait to make purchases until the start of a new billing cycle, or take advantage of payment terms offered by suppliers or creditors. Carefully examine your costs and options in order to create more breathing room in your budget.
5. Review Your Budget Periodically
   While many larger businesses draft a yearly budget, small businesses should re-evaluate their budget more often. In fact, it is wise for a small business owner to plan only a month or two in advance due to the volatile nature of business and unexpected expenses that could affect revenue estimations.
6. Re-evaluate Services/Suppliers
   Do not ever hesitate to research new suppliers or ways to save money on services being performed for your business. Re-evaluation should occur at various stages of the business cycle, including at the start-up of a business, annual or monthly budget creation, and during periodic business reviews.

As you can see, budgeting is an easy – but essential – process designed to help companies forecast (and then match) their current and future revenue to their expenses. The ultimate goal of a small business budget is to ensure that there is enough money to keep the business running, grow the business and have funds available should emergencies arrive. For more information on budgeting for small businesses, click here.

The most important part of fundraising is connecting with your supporters on a personal level. People are more likely to respond when the cause affects them, or someone they know, personally. Nonprofits today have an advantage that their counterparts years ago did not: social media. With the rise of sites such as Facebook and Twitter, nonprofits have the opportunity to connect their cause with volunteers, donors and prospective contributors. Keep the following tips in mind when considering using social media to further your fundraising efforts.

Sharing
Social media is all about sharing information. Whether personal, humorous or compelling, the media that people transmit to one another can take on a life of its own and reach a large amount of people.  Requesting people to draft their own status updates and tweets about your charitable cause is a lot to ask, but simply embedding a “like” or “share” button on your website, blog or specific pages is an easy way to engage your supporters.  When preparing for an event, be sure to embed a “Like” button on the event’s webpage, email invitation and other digital communications related to the event. It’s not only easy to do, but it also helps spread the message about your event and, ultimately, about your organization.

Lots of Links
Search engines such as Google are always updating their algorithms that govern how certain terms appear on results pages. Once social media was determined to be a staying force, search engines took social media into account in the results pages. The more links a page has to blogs, Facebook, Google+ and other services, the more likely it will be deemed worthwhile and deserving of attention by search engines.  Make sure that your organization can be found on all of the major social media networks, including Facebook, Twitter, YouTube, Google+ and LinkedIn. At a minimum, claim your organization’s profile or page and include a link back to your website.   Each tweet or status update builds new links to your cause. Once you have established your presence, begin connecting and interacting with related causes. All of these efforts will make it easier for people to find you online and learn more about your cause.

Turn Links and Likes Into Donations
Social media is successful for many reasons; however, it’s primary benefit to organizations is that it allows for feedback from your constituents, donors and supporters. Donors want to know that they are doing something tangible to help a cause. The addition of platforms that allow them to contribute their own thoughts and feelings about a topic keeps them engaged and committed to the organization for a long time.

Of course, social media is not the end-all to be all of fundraising, but using technology to build support does give you an advantage. With the abundance of information, not to mention the accessibility, many people turn to the web to look for causes to join. Don’t let technology leave you behind; use it to gain an even greater following and, ultimately, more donations.