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CPA

Technology Budget: Getting Buy-In from the Board or Association

By | Accounting, Budget, CPA, Nonprofit | No Comments

Regardless of a non-profit’s budget, the technology world is quickly revolving and to stay competitive, it is imperative to stay current on technology.  Even the simplest of computing advancements can require that some hardware or software be upgraded from year-to-year. Failing to keep up with the techno-curve can leave your organization in a deep hole that ends up costing you more in lost time, money, and resources then it would if you were able to justify the expense of upgrading.

So, we have a need to communicate how to balance the cost of doing nothing with the cost of spending on new technology in a business environment.

The need to present an annual technical budget to an association or nonprofit board may have its own unique circumstances, such as the need to adhere to strict or mandatory budgeting requirements. To meet these constraints, consider the following criteria when preparing for your annual budget review with the board:

  • Supports mission statement: Be transparent about how any funding is being used to further the group’s mission.
  • Forecasts contributions: Show how future contributions, gifts, and grants can offset operating expenses.
  • Plans for updates: Communicate how budget updates will be handled throughout the year to keep the original budget on track.

Presenting the right budget for your organization will differ materially from what is right for another organization. Each organization will have its own challenges and needs. Some of these variables can include:

  • What an organization is capable of and prepared to spend on technology.
  • Access to a discounted or donated upgraded system.
  • Ability to absorb implementation and training costs.
  • How effectively current technological resources are being used.
  • The number of staff available to participate in a technological update.

Although it may be tempting to propose that your organization adopt the latest technology can offer, generating a business case that shows an immediate and positive return on investment (ROI) using such technology may be a stretch. For example: Are you able to demonstrate to the board how your present technology is slowing your business process down to the point where it’s causing lost revenue? And can you then show how the proposed upgrade will alleviate your staff’s business challenges resulting in smoother office operations and higher revenue returns?

Your ability to identify your organizations biggest technological challenges and technology needs will help you to better outline your budgeting options to your nonprofit or association board for their review and approval. Based on a clear understanding of these options, presenting a cohesive set of recommendations that are more likely to be approved by the board becomes more certain.

By remembering the importance of comparing the ROI to the cost of upgrading, while showing the cost of doing nothing, you have a better opportunity to realize board approval of your technology budget that moves your group’s stated mission forward.

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.

The Right CFO Makes a Big Difference!

By | Accounting, CPA, Grant Management, Nonprofit | No Comments

Finding a CFO with the right skills, experience and chemistry with the organization’s leaders is critical. A CFO is more than an accountant. He or she is also a strategist. The CFO creates budgets, analyzes financial statements, provides strategic direction, and helps others in the company understand the plethora of data provided by the accounting and finance department.

When Should You Hire a CFO?

As your organization grows beyond its original size and begins to make a larger impact among its constituents, it’s natural to wonder when you should hire a CFO.  A few signs that indicate it is time to hire a CFO include:

  • The Executive Director, CEO or President is wearing too many hats. As a result, critical financial tasks aren’t getting done on time simply because the leader is too busy to handle them.
  • The organization’s finances have grown to be complex, requiring someone in the leadership chair who understands nonprofit accounting.
  • The Board of Directors feels a layer of oversight and leadership is needed to manage the accounting needs of the organization.

The right CFO will use their expertise to:

  • Bring a strategic, high-level perspective to the organization’s finance and accounting needs.
  • Build the organization’s capacity to manage its finances as it grows in size and complexity.
  • Reduce excessive workloads in the areas of finance, administration, real estate, technology or legal for the Executive Director (ED) and/or the Chief Operating Officer (COO).
  • Balance or supplement the skills of the controller or other finance team members.
  • Partner with the ED and COO to make decisions that benefit the organization from a financial perspective.

How to Find “CFO Right”

You may need to allow several weeks or months to search for the right CFO candidate.

The first task is to create a job description outlining the desired characteristics of the CFO. Focus on the necessary core capabilities, strengths, and experiences. It’s imperative that a non-profit CFO has experience with nonprofit financial management. Other core characteristics to look for among candidates include:

  • Understands non-profit budget models, contracts, and regulatory requirements
  • Knows and demonstrates passion about the organization’s mission
  • Produces detailed and precise work
  • Exemplifies strong listening and perspective-assessment skills
  • Communicates well, in a transparent fashion
  • Exercises good judgment in the midst of ambiguity

We mentioned it before, but the right CFO also has a certain chemistry with the leadership team. That’s not as an ambiguous term as you may think. Chemistry is essential to a calm, orderly, and productive relationship with the organization’s top leaders. The better they work together, the more work they can get done.

It’s difficult to assess chemistry, but allow all your top leaders to meet and interact with potential candidates. Give them time to get to know one another during the interview process. Ask them how they feel about each candidate. If you have several equally qualified candidates, you may need to rely upon the team’s judgment about compatibility as the deciding factor.

Can You Afford a CFO? Options

While hiring a full-time CFO is a great solution for many mid-sized and all large non-profit organizations, many are too small to afford or need a full-time CFO. If your organization falls into that category, there are several things you can do to afford to hire a CFO.

One idea is to hire an interim or temporary CFO. No one earns the title of CFO without building an extensive body of knowledge and experience. Bringing someone into the role on an interim or fractional basis gives the Executive Director and the organization immediate access to the many lessons learned over the course of their career, at significant cost savings.

If you’re interested in finding your next CFO or placing an interim CFO in your organization, Welter Consulting can help. 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.

Internal Controls & Abila MIP Fund Accounting™

By | Accounting, Audit, CPA, Internal Controls, Nonprofit, Uncategorized | No Comments

Internal controls provide safeguards against losses, thefts and mistakes. An old-fashioned way of keeping internal controls may be to have one staff member count out the petty cash box while another watches the process. The watcher in this case is the internal control. An extra set of eyes on the counting process keeps the person holding the cash in hand from making “mistakes”, whether intentional or not, when it’s handed over for counting.

Implementing internal controls can be easy! Our “Internal Controls for Nonprofits: Best Practice Resource Guide” can help your nonprofit establish best practice principles, policies, and procedures.

In larger, automated accounting systems for nonprofits, such as those that run Abila MIP, internal controls are built into the system. By automating many of the financial processes, it becomes more difficult for someone to circumvent the system and steal from your nonprofit.

A publication from the Virginia Society of Certified Public Accountants brings home the point that good internal controls, through the use of Abila MIP fund accounting and processes around them, can help prevent loss and “keep honest people honest.”

Safeguards Against Loss: Simple Internal Controls

The first and best internal control is to avoid handling cash when at all possible. It’s not that cash is bad, it’s just that it can be “lost” more easily than money that is already in the bank account and tallied in Abila MIP fund accounting.

A system of checks and balances keeps careful watch over your finances. A few internal controls to keep losses to a minimum:

  1. Lock checks and cash in a safe or drawer both during business hours and afterwards.
  2. Monitor access to the keys.
  3. Make it a rule that all employees, regardless of their job title or function, must have another employee present when opening the safe or cash drawer, and counting out money.
  4. Don’t let checks and cash pile up in the office. Make a bank deposit when the threshold reaches a certain amount.
  5. Use timecards to monitor hourly workers’ wages.
  6. Have a manager review timecard information regularly to ensure no one is ‘padding’ the hours.
  7. Do not let anyone borrow funds from the organization’s accounts for personal reasons, or use business credit cards for personal reasons.

Acting Swiftly

It is important to have written policies in place regarding fraud and theft so that you can take the appropriate steps to document, correct, and if necessary, terminate employees who circumvent or ignore internal controls. Depending on the circumstances, your organization may also have a zero-tolerance policy for theft, and a written policy regarding grounds for termination should include such information.

Take steps to create policies and internal controls for your staff. Train and teach them their expectations. Set in termination policies in place. Know who is handling your accounts, who has access to cash and checks, and how such resources are handled. Keeping track of your finances using good fund accounting software is a way to detect fraud and act swiftly.

Abila MIP Fund Accounting

Abila MIP Fund Accounting includes fraud protection and analysis within the system, so you can use the data within it to detect patterns of losses, analyze data, and prevent fraud.

Most losses do not occur in isolation. People find that if they can get away with one theft, they return and try again. This leaves a footprint or a recognizable pattern. Data ran from your fund accounting system may be able to display such patterns so that you can take immediate, corrective action.

At Welter Consulting, we want to help our nonprofit customers prevent losses and fraud. By utilizing good nonprofit fund accounting software, such as Abila MIP, you can keep careful track of all of your accounts and detect suspicious activity quickly.  Click to learn more about Abila MIP fund accounting.

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.

CPA Continuing Education – Ideas and Tips for Professional Development

By | Abila, Accounting, Audit, CPA, Grant Management, MIP Fund Accounting, Nonprofit | No Comments

Passing the CPA exam is only the first step in a long series of challenges for CPAs. One ongoing challenge is meeting the required 40 hours annually of professional development.

Large, public accounting firms and big corporations may arrange to send their CPAs for annual professional development workshops and classes to help you meet the 40-hour requirement. CPAs who own their own businesses or who work for smaller companies don’t have that luxury.

It can be difficult to take time away from your own accounting practice to take classes that satisfy your continuing education requirements. Let’s face it; if you can take a week off, you want to go to the beach or the mountains, not to a stuffy meeting room. It can also be expensive to pay for airfare, hotel, and workshop fees.

There are alternatives to the typical round of workshops and conferences offering professional development hours for CPAs. On-demand learning is the latest method of distance learning that offers flexibility with the quality for certification credits.

On-Demand Learning for CPAs

On-demand learning for CPAs consists of online courses, workshops, and seminars. Those that receive CPA credit hours count towards your annual 40-hour certification requirement.

You can find on-demand learning from many providers:

  • Companies offering workshops in conjunction with products or services
  • Consulting firms offering on-demand learning on a variety of accounting topics
  • Professional organizations and groups
  • Local colleges and universities
  • Online learning organizations and companies offering a variety of classes.

In all cases, check to make sure that the workshop you are interested in attending qualifies for CPA certification requirements.

Factors to Consider When Choosing Learning Opportunities

There are several factors to consider when assessing on-demand learning opportunities. These include:

  • Quality: You’re going to spend 40 hours each year participating in workshops and classes. Make sure they are of the highest quality and relevant to your needs. Look for courses that address relevant topics. Instructors should be fellow CPAs or otherwise highly qualified to teach the subject matter. It’s also helpful if instructors are currently working as CPAs. People who are currently working as CPAs and senior accountants can answer questions and offer insights into common workplace scenarios more easily than those with solely academic qualifications.
  • Affordability: One of the best things about on-demand learning is its affordability. Because most on-demand courses can be taken online, you immediately save money on travel expenses. You can also sandwich them into your day, taking them at lunchtime, in the evenings, or on weekends if they are pre-recorded. Most online courses and other on-demand learning opportunities are reasonably priced. Some are even free. A subscription-based continuing education provider can also provide greater savings, with an unlimited number of courses available to you during the subscription period.
  • Speed: Another great benefit of on-demand learning is that it is self-paced. You can take classes as you need them. You don’t have to wait for a specific conference or workshop. Although it’s not smart to leave your continuing education requirements until the last minute, if you do get to the end of the year and find yourself lacking a few course hours, you can usually find an on-demand course to take online that will let you complete your requirement in record time.

Who doesn’t like to save time or money while learning valuable information? On-demand professional development answers the need for CPAs to finish their 40 hours of annual continuing education in a way that fits their needs.

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.