Category

Cloud

Oct 20
0

FASB New Cloud Computing Standard Reduces Complexity

By | Cloud, FASB | No Comments

Cloud computing offers unprecedented convenience and adaptability, especially now with so many organizations encouraging remote working arrangements for employees. With cloud computing, your team logs into the organization’s systems from any internet-connected computer. Data stored on the cloud offers excellent security and backup protection as well as the convenience of accessibility.

FASB Offers New Cloud Computing Standard

FASB announced another new standard on cloud computing costs associated with a service agreement. This standard is effective for public business entities in fiscal years beginning on or after December 15, 2019, and will take effect for all other entities for reporting periods beginning after December 15, 2020.

Accounting Standards Update No. 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Service Arrangement That Is a Service Contract has a very long and complex title for a standard intended to reduce complexity.

The standard now aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement. The hosting arrangement must be a service contract. The requirements are for capitalizing the implementation costs incurred to develop, or obtain, software and hosting arrangements that include an internal-use software license. Note, however, that the amendment doesn’t affect accounting for the service element of a hosting arrangement if it is in a service contract.

Before this clarification, there were two different capitalization models. Each model depended on whether the item purchased was a service agreement or an asset. However, cloud computing models weren’t included in the 2015-issued standards. This update clarifies how to account for cloud computing adoption, a popular method of software adoption.

Hybrid Solutions Require Close Accounting Attention

Another challenge that many organizations face is accounting for hybrid cloud models. Hybrid models may include both cloud-based and site-based elements in a software solution. If it’s both, how should it be accounted for?

Companies must assess which portion of the costs are internal-use and which are considered part of a service agreement. The focus should be on identifying costs and properly allocating them to the correct item.

Potential Advantages from the Update

There are some potential advantages from the FASB update, too. One advantage is the deferral aspects of the costs that qualify. EBITDA and some balance sheet metrics may be impacted by the deferral.

The new standard also aligns the balance sheet and income statement in the aggregate for all types of software. It adds consistency and comparability which help accountants provide clear financial reports.

Getting to the Right Answer

Clarity and consistency are both vital to accounting metrics, with management involved in policy decisions regarding IT projects. Deciding whether or not to adopt a hybrid cloud model, pure cloud, or site-based solution is a decision that requires time and care. Each organization must weigh the pros and cons of various products and solutions, including the financial and accounting ramifications, and determine what is best for their needs.

The best method of determining new software for an organization is to include representatives from each department on the decision team. This includes members from finance and accounting who, together with IT, marketing, sales, and management must decide which solution meets the organization’s needs the best. By understanding the financial ramifications of adopting new software, the finance team can provide an informed opinion about the best choice from an accounting and financial perspective.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Jun 18
0

Feeling – and Dealing – with Being Overwhelmed

By | Abila, Accounting, Accounting Software, Budget, Cloud, Corporate Culture, Fiscal, MIP Fund Accounting, Nonprofit, Professional Development, Technology | No Comments

It’s not confined to tax season. A look at why you’re feeling overwhelmed, and how to deal with it.

In the book “Scrum: The Art of Doing Twice the Work in Half the Time”, authors Jeff and J.J. Sutherland have an interesting chart on page 91. In this chart, they cite 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.

Accountants and financial managers at nonprofits aren’t immune to this loss, due to context switching. In fact, we’re probably more vulnerable to it due to the focused nature of our work. Dealing with financial issues, accounting questions, and understanding complex financial information requires quiet, focused time. The barrage of instant messenger apps, phone calls, emails, texts and myriad information streams in today’s connected world increases the loss due to context switching. Multi-tasking for greater productivity is a myth.

If you’re feeling overwhelmed, you’re not alone. Nearly all professionals are feeling overwhelmed these days. It’s as if the crunch before tax season never ends. Researchers point to the common culprits – instant messengers, instant news, instant everything – as a big part of the problem. The human brain isn’t wired to deal with this level of intensity, and we haven’t had time to adapt to the rapid pace of change that technology has wrought in our personal and business lives.

Although we cannot fully shut the world out and switch off the phones, there are ways to improve productivity. These include avoiding context or task switching, single-tasking instead of multi-tasking, and establishing boundaries around office times.

Single-Tasking for Greater Productivity

Multi-tasking does not improve productivity. Instead, it diminishes productivity because the mind needs time to acclimate to the second task. As we focus on one task, our attention is fixed on that task; switching to a second task takes brain power to establish focus, change direction, and process new information.

Don’t buy into the myth of multi-tasking. Instead, turn off the music or the television while you work. Shut the door to your office. Switch off the instant messages and turn your cell phone to mute while you work on a project. Allow yourself the space to focus, rather than trying to cram as many tasks as you can into the same amount of time.

Set Office Rules

Another tip to improve productivity and avoid feeling overwhelmed is to set some basic ground rules around your time in the office. While many managers prefer an ‘open door’ policy and make themselves available to their staff at any time, you may need to establish some basic policies around availability.

Some managers have ‘office hours’ when they leave their door open as a clear signal to their teams that they can drop in and ask any questions they wish. Others block out time on their calendar for quiet, focused work. Either method works fine. The point is to ensure that you have adequate quiet time for focused work and additional time blocked out for your teams.

Switch Off the Mobile Phone

 Cellphones are a great convenience, but their buzzing, shrilling, vibrating presence has ruined many a meeting, family dinner, or quiet time. Shut off the mobile phone when you aren’t at work or when you need some space. Texts are rarely as urgent as we make them out to be, and your brain needs a break from the constant stream of messages and information it’s trying to process.

Give Yourself Permission to Rest

 Lastly, give yourself permission to rest on the weekends, vacations and holidays. When you’re behind schedule on projects, it is tempting to trying to bring work home or devote a few extra hours in the evening to finishing up a project. Occasionally burning the midnight oil doesn’t hurt  but making it a habit can cut into your overall productivity. Ensuring balance in all things takes time, practice and effort, but it helps your overall productivity.

Everyone feels overwhelmed at times by work. If it becomes chronic, however, it’s time to take steps to safeguard your time. Burnout happens in all professions, including accounting and finance, nonprofit and for-profit companies.

 

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.


 

May 21
0

Responsible Data Collection for Nonprofit Organizations

By | Abila, Accounting, Accounting Software, Cloud, Data, Internal Controls, MIP Fund Accounting, Nonprofit, Technology | No Comments

Many people were shocked to discover the amount of data that Facebook and its partner organizations collect and share about their users. What’s surprising isn’t the amount of data collected and shared, but the public’s ignorance of how rampant data abuse is throughout the online world.

Have you ever had advertisements that seem to follow you online? That’s due to data collection from your browser history. Companies such as Google note which websites you’ve shopped or browsed recently and make educated guesses on behalf of their advertisers on which ads to display on your pages. So-called “remarketing” or “re-targeting” is just one example of how you are inadvertently leaving a detailed data footprint wherever you go online.

Social media websites such as Facebook may be in the news because of their disregard of how sensitive people are to data collection and sharing, but your company could be next on the list if you aren’t careful. Take time now to review your nonprofit’s data collection habits, security, and sharing guidelines, and make changes if needed to safeguard your donor and member privacy.

Create and Display Data Privacy Policies

Data privacy policies should be written and displayed prominently on your website. Some websites request that users accept them as part of their terms and conditions of using the website.

Privacy policies include:

  1. Details on how data is collected, shared, and stored
  2. Users’ abilities to stop data collection or access records
  3. Where to send complaints, questions, comments
  4. How IP addresses, cookies, and external links are used
  5. Any other information related to data use and collection

The Council of Nonprofits has a good privacy policy which you can review as a guideline to help you create your own. It includes the major points most nonprofits should cover in their privacy policies.

How Data Is Used

Most people recognize that some data is collected anytime they visit a website. Few object to simply recording IP addresses of people who visit a site but do disagree with who sites share their data with – they want control over who sees their personal information.

As part of your data privacy policy, be specific about how data is shared. Consider limiting shared data only to necessary third-party vendors, such as mailing companies who help you package donor mailings, or some other third party you manage and control. Selling user data may be a tempting way to make extra money, but it can quickly sour any trust built with your member base.

Improve Data Security

Even if you only collect a few data elements when people register for your site or make a donation, you must make all efforts to safeguard that data from hackers. Small nonprofits are actually at greater risk than larger ones because criminals know that small organizations lack the resources to counter against a cyberattack. They are more likely to pay the ransom when data is hijacked and may lack a dedicated IT resource to protect against attacks.

Take the time now to improve data security. Simple steps such as updating software, creating strong passwords, and adding virus protection software to your organization can act like locks on the front door of a house – not much if someone is truly determined to break in but enough of a deterrent that the average thief walks away for easier pickings elsewhere. Consider working with a cyber security expert to enact greater safeguards against intrusion if you handle highly sensitive data.

Although nonprofit organizations aren’t in the business of collecting and selling data like Facebook and other big companies are, they must maintain a basic level of trust with the public in order to continue their activities. Protecting data and providing transparency into your organization’s data privacy and security is one way to enhance that trust.

 

Welter Consulting

Welter Consulting is a technology firm empowering nonprofit and government organizations with effective software, consulting & training that can help you with your accounting needs. We are committed to finding the most affordable technology, the most powerful solution, and providing expert support. By leveraging technology and superior reporting, our team helps to free more of your time to devote to the important work of your mission. We bridge people and technology together for effective solutions for nonprofit organizations. We are passionate professionals who choose to work in the nonprofit sector for the same reason you do – helping others. Please contact Welter Consulting at 206-605-3113 for more information.

Apr 23
0

How Do You Measure the Impact of Good? Measuring Nonprofit Outcomes

By | Cloud, Data, Nonprofit | No Comments

How do you measure the impact of a nonprofit organization? Many try to measure impact through output metrics: number of people helped, animals saved, members served. But what if we could measure not just how many but how much – as in, how much good was done?

Two organizations, GuideStar and Impact Genome Project, are attempting to do both.

GuideStar recently launched GuideStar Platinum, a platform through which nonprofits can report both outcomes and impact. About 20 percent of the more than 12,000 metrics shared on the GuideStar platform represent impact-based outcomes. The rest measured output.

Impact Genome Project is an initiative curated by Mission Measurement. It aggregates more than 10,000 pieces of research, seeking to identify patterns of what works and by extension, what doesn’t work. This analysis can help nonprofits replicate what works by sharing the outcomes.

Why Bother with Data?

The question many nonprofit managers ask is, “Why bother with data?” Outcomes data has long been the standard method of reporting for many nonprofits. It’s easy to see why. Charting how many members you’ve signed up this year is easier than ascertaining the impact that your programs have made on those members, for example.

Data is now used throughout many industries to quantify success. In medicine, for example, hospitals rely on both outcome data (the number of patients who attend a diabetic symposium or nutrition class) but also rely on impact data (changes in community data such as the number of diabetics diagnosed in a year). Together, these two metrics build a powerful story that demonstrates not just the effort of the nonprofit, but also the effect that effort has on the community.

Donors Want Data

Donors want to see data on how well nonprofits are utilizing their funds, and that’s where the GuideStar program comes into play. GuideStar is well-known in the nonprofit world as a good place for potential donors to research nonprofits.

GuideStar data enables donors to:

  • Research potential nonprofits
  • Read their financial reports
  • Understand how well their money is spent to support and sustain the nonprofit mission
  • Review leaders, salaries, money spent on overhead and more
  • Read answers from the nonprofit on specific initiatives
  • Contact the organization

Nonprofits that provide quantitative as well as qualitative answers to these questions to groups like GuideStar provide transparency to their potential donors. Donors look for metrics they can understand before giving money. They want to see not just quantity, but quality.

Success is measured through many metrics. Donors want to know that their money successfully solves the problems the nonprofit purports to solve through their program. If they are donating money to a bird sanctuary, they want to know not just how many birds were rescued, but overall, what is the impact on the sanctuary, the environment, and the local wildlife.

Data Is the Future of Nonprofits

Although you probably want to roll up your sleeves and get to work helping the audience for your program, there is a need for data, and that need will continue to grow in the future. As donors become pickier about the causes they support, the demand for facts to base nonprofit assertions will grow.

Start tracking the outcomes of your programs now and discuss ways by which you can measure the impact of your programs. You may need time to ramp up your databases, software, or other tools to help you track, measure and report outcomes.

It’s a smart idea to sign up for programs such as GuideStar or the Impact Genome Project now so that you are fully prepared for future donors who wish to investigate your organization’s credentials. The sooner you can provide data, the more attractive you will make your organization to potential donors.

Welter Consulting

Welter Consulting offers a bridge to solutions that work for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.