Nonprofit – Beck & Company

Mythbusters for Nonprofit Budgets and Policies

Does a nonprofit’s budget have to break even?

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

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

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

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

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

Budgets as Guides

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

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

Cash vs. Accrual Method

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

Budget Checklist

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

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

Free Resources

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

Beck & Company

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

New Mobile App Helps Nonprofits Reach Potential Donors

If you’re like many nonprofits, your mailing list and email list is bulging with inactive accounts. These are people who, for whatever reason, signed up to receive messages from your organization but who haven’t donated in a while. They may still be interested in your cause or your activities, but you can’t be sure. Yet removing them from your lists seems counter-intuitive. After all, you worked hard to attract them in the first place.

A new mobile app, called LetsAllDoGood, promises to change that dynamic and reach inactive list members via their smartphones. According to the Pew Center for Internet Research and Technology, 68% of all adults own a smartphone, and that number is anticipated to climb until smartphones become as ubiquitous as wristwatches. LetsAllDoGood capitalizes on this phenomenon by offering an app that pushes partner notifications out to people who have downloaded the app.

How It Works

The app works on the same principle as Facebook, Twitter and other social media sites. There’s a constant barrage of communications available, and the average person doesn’t read most of their emails. Instead, they scan headlines and top news to find out what is going on. Sites like Facebook offer messenger apps and alerts that push notifications from the system to a user’s desktop, tablet or phone. LetsAllDoGood works by the same principle.

Users installs the app on their smartphone. LetsAllDoGood signs up nonprofits, who then feed messages out from their organization. The app “pushes” these messages out, which pop up on the screen of the smartphone. It instantly cuts through the clutter.

The app bridges the gap between email, social media, and the users. Each helps communicate important updates with your constituents, but may not reach everyone all the time. It would be wonderful if people opened and clicked on emails to read stories, but they don’t. With the app, messages are pushed right onto the screen, making sure that people see them. This makes it easier to click and read more, click and donate, or share with others.

How the App Can Help You Reach Donors

Some of the people on your current list may be receiving your emails and donation requests, but may not open them. Gmail, for example, pushes what it perceives as advertising or promotional emails into a separate folder, thus hiding them from the average user who scrolls through their list of active emails for important messages. Your email messages may be relegated to this or other folders on many systems.

LetsAllDoGood changes this dynamic by enabling pop up messages on phones. Most people are glued to their smartphones anyway, using them for everything from online banking to finding a restaurant. It’s a simple step to make a donation from their phone using the app. A crisis call for funds, a special event and other triggers can be more successful using the app.

Nonprofits and Tech: The Trend Continues

This mobile app is just another in a long string of technology trends affecting nonprofit organizations. Using email marketing, social media, and other web-based applications and systems to generate interest, enthusiasm and awareness for your mission continues the communication in new and exciting ways.

Until then, learn about LetsAllDoGood on the company’s website. It is free for nonprofits to partner with LetsAllDoGood.

The technology works on Apple products only at the moment. It is expected to be available on Google Play soon.

Beck & Company

Beck & Company is an independent certified public accounting firm located in Washington, D.C. 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.

Add Processes to Improve Nonprofit Operational Efficiencies

Nonprofit Financial Management for Improved Performance by Adding Process Roadmaps

How many times have you started on a project or a task only to have that sense of déjà vu? Perhaps you had to perform that task last year, or a similar task last month. Unless you documented how you went about performing this task, however, it’s unlikely that you’ll remember the exact steps. That leads to duplicate efforts and re-creating the same task over and over again. In other words, you end up reinventing the wheel.

Many nonprofits fall into this trap simply because they are under-staffed. Their current staff is busy completing their assigned task lists, thinking ahead to next month, serving constituents, and doing all of the myriad tasks it takes to keep a healthy nonprofit organization humming along. It can be difficult to carve out time to draft a process roadmap, and still even more difficult to develop a plan to store such roadmaps and transmit them to others during the employee onboarding process. Still, without such roadmaps in place, valuable time is wasted. Nonprofit financial management can improve operational efficiencies by creating a process roadmap.

What Is a Process Roadmap?

Roadmaps are going the way of the telephone book, but they still provide a good analogy for documents around the office. A process roadmap maps out the path from start to finish that you take in order to complete a task. It includes vital information such as who performs which task in the process, what resources may be needed, and when the task should be completed.

Such a document need not be lengthy or cumbersome. In fact, the simpler and easier it is to read and understand, the better. Some companies require process documents to be one page or less to ensure they are as simple as can be.

Once a process is documented, it can then be replicated by anyone in the organization or delegated to someone outside of the organization. It is a great time saver after the initial time is invested into creating the document.

Uses of Process Maps for Nonprofit Financial Management

Let’s take a look at two common tasks nonprofits face and how process roadmaps can help:

Annual charity event: Many nonprofits hold annual fund-raising events such as golf tournaments, sales, open houses, and the like. These events are frequently process-driven and require that multiple people pitch in and ready things for the date of the event. The date is usually set far in advance, so that a timeline can be easily mapped out from the event date back to the first tasks in the process, such as securing the venue. When a process map is in place for an annual event, it can be delegated to multiple staff members, volunteers, or outsourced partners.
Audits: An annual financial audit is another event that can be transformed with a basic process in place and mapped out. You know when the audit will take place, and which documents must be gathered for the auditors. Specific resources may need to be earmarked for the auditing process, such as conference rooms reserved, personnel available, files organized and so on. Once a process is mapped and in place, the audit can go smoothly each year if the process is followed.

Organizing Your Processes

The most efficient way to organize processes is to create a template. The template can include:

Name of the process
Date when the draft was created
A brief explanation of the process
Goals and outcomes
Timeline and deadlines
Materials or other things needed
Step by step instructions, tagged with the role assigned to each step.
List of resources

A shared network drive or cloud-based system such as Google Docs, free to use with a standard (and free) Google account, makes it easy to organize all of your processes and provide access to staff at any given time.

Include Training

Lastly, be sure to include some basic training once the processes are in place. A process can only be used if it’s efficient and if people are aware it exists. Training familiarizes everyone with the steps in the process and provides a valuable opportunity for feedback to adjust the process.

Having your most important projects and events mapped out using a process roadmap saves you a great deal of time and effort. It enables you to transfer knowledge to new employees or volunteers and to smoothly and successfully navigate the path yet again. It is a great tool for organizational efficiency.

Beck & Company

Beck & Company is an independent certified public accounting firm located in Washington, D.C. Founded in 1987, we specialize in the world of nonprofit financial management, helping you 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.

Nonprofit Financial Management Tips [Free Webinar]

Why Nonprofits Need to Learn More About ASC 606 and IRFS 15

Nonprofit financial management includes keeping abreast of FASB changes, and examining your accounting methods to ensure they coincide with the latest recommendations. In May 2014, FASB issued Topic 606: Revenue from Contracts with Customers. In it, plans were unveiled to require all entities, both public and private, to change how they accounted for revenues. Revenues were to be recognized when the entity satisfied the performance obligation with the customer. This usually means that when goods or services are transferred to the customer, the revenue can be recognized.

While much of the work of a nonprofit doesn’t fall under the new ruling, some of it might, which is why you should pay attention to the changes and evaluate your revenues accordingly. Activities typical of a nonprofit that might be considered under the new ruling include membership fees, conferences and seminars, subscriptions, tuition, products and services, advertising, licensing, sponsorships, royalty agreements, and federal and state grants and contracts.

Nonprofits seeking to learn more about the law should sign up for the forthcoming seminar from Intacct: The Impacts of ASC 606 on Subscription Businesses. This webinar will take place on Thursday, November 3^rd at 11 a.m. PST/ 2 p.m. EST.

If you are currently using spreadsheets to manage your accounting, it will be almost impossible to comply with this law and IRFS 15 compliance, the effects of which will begin in December 2016.

The webinar is led by Tony Sondhi, a member of FASB’s Emerging Issues Task Force and an expert on revenue recognition. This is a unique opportunity not only to learn first-hand about 606 and IRFS 15 compliance but to learn from a well-known expert and member of the FASB task force.

At this seminar, you will learn more about the changes begun by these rulings, as well as information on how you can interpret and implement them for your organization. You will also learn more about the financial risks for subscription businesses. Many membership organizations rely upon a subscription model, which is directly impacted by these rulings.

According to the FASB document, “The core principle is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.”

The AICPA has put together a good paper that outlines the requirements and delineates the steps to take under each. There are five basic steps to comply with the new regulation:

Identify the contract with the customer.
Identify the performance obligation within the contract.
Determine the transaction price.
Allocate the transaction price.
Recognize the revenue when the entity satisfies the transaction.

Typically, step 5 occurs when goods or services are delivered satisfactorily to the customer.

The goal, of course, is to protect customers and to make it simpler and clearer for entities to recognize revenues. Many organizations are already using similar protocols, and for those organizations, making adjustments to satisfy the requirements should be simply. For others, it may take a deeper look at the way they are recognizing revenues, and shifting some of their processes.

Do You Need to Make Adjustments?

All nonprofits should assess their accounting practices and see how their revenue streams compare to the new rules. Organizations should also consider what, if any, impact this may have on their financial statements. It is a wise move as part of nonprofit financial management.

Keeping Abreast of FASB Changes

We have previously shared details of the proposed FASB changes taking effect in 2016. Any changes that impact your business should be noted and researched as soon as possible. Nonprofits, like other business entities, must comply with all requirements. Failing to do so can put your nonprofit at risk for losing its nonprofit status. You also risk falling behind in compliance issues, an important part of accurate nonprofit financial management.

More seminars are available to provide updates on various issues pertaining to accounting and nonprofit accounting and finance. You may view our complete list online.

Beck & Company

Providing Exceptional Customer Service in a Nonprofit Environment

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

Determine Service Baselines

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

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

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

Measuring Service

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

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

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

Improving Service

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

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

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

Beck & Company

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

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

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

Tax-Exempt Status: What Does It Mean?

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

Reasons Why You Can Lose Tax Exempt Status

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

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

Regaining Tax Exempt Status

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

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

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

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

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

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

Beck & Company Certified Public Accountants and Business Advisors

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

Keeping the Cash Flowing and Other Nonprofit Woes

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

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

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

Five Tips for Corralling Your Cash Flow

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

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

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

Beck & Company Certified Public Accountants and Business Advisors

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

Trends to Watch: The Rise of Social Media for Nonprofit Donor Communications

Do you use social media to keep in touch with friends, family, colleagues or acquaintances? If so, then you’re among the estimated 65 percent of all adults using social media. Whether you tweet, pin or post, social media has become an important communications channel for nonprofit marketing.

The Top Three Social Media Sites for Nonprofits

You probably have your favorite social media sites, but some seem to work best for nonprofit communications. The top three social media sites for nonprofits are:

Facebook: Facebook remains the social media site of choice for most nonprofits, and it’s no wonder. The site consistently ranks as the most visited site in the world with 09 billion active daily users. Nonprofits can share stories, webpages, blog posts, graphics, videos, and more, reaching an enormous audience who care about their cause.
Twitter: Saying what you need to say in 140 characters or less is tough, but Twitter’s newer features, including the ability to share pictures, makes it appealing for more people. Nonprofits who need to get the word out quickly about an immediate need or cause can do so via the rapid-fire delivery of the Twitter system. Twitter has 115 million daily users, far less than Facebook, but those users prefer the short, direct messages the site sends.
YouTube: YouTube, owned by search engine giant Google, is an enormous repository of videos. Anyone can establish their own YouTube “channel” and upload videos. Nonprofits who want to reach out personally to potential supporters by sharing videos of events, constituents, or the groups they serve can find no better way than through video. About one-third of the entire world’s population watches YouTube.

Nonprofits are using social media daily, with posts going out at least once a day (often more frequently). The person sending out those messages varies according to the nonprofit and its organizational structure. In some larger nonprofits, a director of communications handles the lion’s share of PR, digital communications, and social media. Other staff positions responsible for social media include executive directors and developmental directors, who may be tasked with both social media and other communications related to their programs.

Social Media Trends for Nonprofits

If your nonprofit doesn’t have a written social media management policy, it may be time to create one. A simple policy that spells out which sites your organization has a presence on and who has the final say about what goes on social media can help you stick to your message online.

More importantly, a specific social media policy can prevent media faux pas that can be a nightmare to clean up. One single mistake can derail a lot of good work by raising the ire of your constituents or creating negative press. Sites like Twitter create a unique, publicly accessible URL for every message you tweet. That means that even if you erase a message from your Twitter account, it may already be too late; it could be shared or indexed, making it even more difficult to remove.

Social media use and sharing policies should include instructions on who may post and who is delegated to check and respond to messages. Followers, fans, donors and constituents may choose to communicate with you via your social media sites. Be sure to have someone tasked with monitoring and responding within 24 hours to messages on social media. The instant nature of these sites has made quick responses important. People expect fast responses, and if they don’t get them, they can feel slighted.

Enduring Value in Nonprofit Consulting from Beck & Company

Social media started out as a trend, but it’s here to stay. At Beck & Company, we believe that any trend that offers enduring value is something of note. We hope that this information helps your nonprofit achieve its mission more effectively.

Beck & Company is an accounting and business consulting firm for the nonprofit industry. We have many years of experience and a staff with direct, hands-on experience in the nonprofit world. For more information, contact us online or call 703-834-0776.

Operational Efficiencies and Achieving Your Mission: The Hidden Link

The business side of nonprofit management sometimes gets short shrift among those actively working to achieve your nonprofit’s mission. Those working on the front lines, or on projects directly supporting the mission, may look askance at those whose sole focus is back-office operations and organizational efficiency.

Yet those who focus on operational efficiencies and productivity in the nonprofit workplace are supporting its mission in many important ways. Without someone paying attention to operational efficiencies at a nonprofit organization, precious resources may be spent unproductively.

The Importance of Operational Efficiencies

“Achieve the mission” is usually the rallying cry of the nonprofit organization. Your nonprofit’s mission may be tied to healthcare, education, animal rights, the arts, or helping industry professionals network. No matter what its mission, the growing need for services, combined with the rising costs of providing those services, means that every resource at your organization must be used as effectively and efficiently as possible.

Enter the office people: the folks from your accounting, finance, human resources, sales and marketing areas (if you’re lucky enough to work for a nonprofit large enough to have people dedicated to each of these areas and not wearing multiple hats). These are the people tasked with making sure that those precious resources such as donations, grant money, membership fees, dues, and fundraising monies are spent in a wise manner. They’re tasked with finding ways to improve how your organization does its much-needed work without sacrificing the quality of that work.

If it seems like a big job, it is. Fortunately, there are ways to help improve operational efficiencies without extreme measures.

Improving Operational Efficiencies: Three Tips

Although specific people in your nonprofit may be tasked with improving operational efficiencies, everyone within your organization plays an important role. The following tips may encourage everyone to find ways to work better, faster, and smarter.

Share resources: Share resources, people, and time with other departments. Avoid the “silo” mentality, which forms walls or barriers around your group to keep information and resources in the group instead of sharing with the broader team. The more you can share, the more efficient your organization will be. Shared resources and talents save money by adding value or solving problems that a single person may struggle with.
Embrace mobile technology: Smartphones and cloud-based business systems are two ways in which you can make it easy for your team to work wherever they are. If they’re traveling, at an event, or at home, they can still respond to inquiries, handle work, and access company information. It makes for a much more efficient system than older site-based software and resources.
Reduce unnecessary travel: Take a long, hard look at your organization’s travel schedule and budget. Do you really need to attend that many trade shows, conferences and events? Face-to-face team meetings can be replaced by video conference, conference calls, or shared documents. With so many options to work easily from a distance, the need for travel should be reduced. Save travel budgets for the most important things that can only be accomplished in person, and reduce costs whenever possible in your travel by staying at inexpensive hotels, limiting meal budgets, sharing taxis, and other cost-saving measures.

Operational Efficiencies Enhanced by the Right Software

We mentioned cloud-based systems as part of operational efficiencies, and they remain an important and accessible path to improving access, communications and collaborations for nonprofits. The right software solution for your nonprofit organization can make it much easier to track expenses and income and make sure the two are balanced appropriately. Making margin enables you to fulfill your mission, and that’s important for any organization. With the right software in place, improving operational efficiencies is a lot easier.

Dive deeper into nonprofit software and attend this webinar “Not Your Mother’s Chart of Accounts—Leveraging Cloud Technology for Nonprofit Accounting.”

Beck & Company Certified Public Accountants and Business Consultants

At Beck & Company, we believe that technical experience must be matched with a service mindset for the best customer experience. We offer consulting, seminars, workshops, and accounting services for the nonprofit industry. For more information, contact us online or call 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.