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Data

Key Takeaways from the Journal of Accountancy’s 6th Annual Roundtable

By | Data, MIP Fund Accounting, Nonprofit, Technology, Training | No Comments

In this year’s 6th annual roundtable, sponsored by the Journal of Accountancy, some familiar themes emerged: the importance of cloud computing, improving technology training for all staff, and cybersecurity. But among the topics discussed during the roundtable, new trends emerged that are worth noting.

Mid-Sized Accounting Firms Struggle with Technology

According to the experts participating in the roundtable, mid-sized accounting firms lag behind both small and large-sized firms in many areas of technology: Implementation, maintenance, and strategy, which can create problems.

For example, lagging behind in cybersecurity puts your entire IT infrastructure at risk. Cyber attacks aren’t limited to big firms; mid-sized and small-sized nonprofits may be at greater risk since criminals view them as low-hanging fruit and quick to capitulate and succumb to things like ransomware. They may also have no dedicated staff to cybersecurity, which means less attention is paid to it and criminals may have an easier time accessing critical data, personal information they can resell, and other information.

Cloud Computing

Cloud computing may bridge the gap mid-sized firms experience in the technology world. Because cloud computing services are set up through the internet, they are accessible to all sizes of companies. They also offer higher security since cloud-based companies providing software and services invest in tighter security to protect multiple clients.

Software delivered through the cloud can also be less costly than previously available versions that were seat-based. Cloud software, shared among multiple mid-sized firms, spreads the cost out so that it is more affordable. Better computing power at a lower cost makes it an obtainable goal for many mid-sized companies.

Technology Improvements Needed

Throughout the roundtable discussion, the need for overall improvement in the use, adoption, and understanding of technology was apparent. Many nonprofit organizations feel overwhelmed by the sheer volume of technology solutions they are expected to learn and apply.

Partnering with a strong consulting firm who can teach, advise, and guide you through the process of adopting tighter cybersecurity practices and cloud-based software solutions may be a good path to follow. Small to mid-sized nonprofits do not have the resources or time to invest in cybersecurity, but they can partner with a company or consultant who is an expert in this area to help them. Understanding your nonprofit’s strengths and partnering with others to shore up your weaknesses is a smart way to proceed.

Simple Changes that Reap Big Results

A few simple changes suggested by the experts that can produce big results include:

  • Encrypting emails: Encryption can protect sensitive information and provide an additional layer of security with an easy fix.
  • Training: Training staff how to screen for phishing schemes, how to craft strong passwords, and other simple cybersecurity measures needn’t be a huge undertaking, but even a little training can go a long way to improve cybersecurity.
  • Updating hardware: Many experts talk about updating software, but how about updating the hardware your staff uses? Bigger monitors may sound like a strange thing to focus on, but they can make workstations more comfortable and prevent mistakes by simply enlarging information on screen.

There’s a lot to focus on when it comes to technology for your nonprofit association. It can feel overwhelming to tackle everything on your technology to do list. Finding and working with a consulting partner may help you move into a better, more comfortable place when it comes to technology.

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.

 

Financial Audits Improve Nonprofit Operations

By | Abila, Accounting, Audit, Data, MIP Fund Accounting, Nonprofit | No Comments

Are you getting the most from your nonprofit’s annual audit? Financial audits aren’t just a necessary exercise to meet the requirements for keeping your nonprofit organization’s status or to please donors and board members. They provide valuable, useful information that can help you improve many areas of your organization.

A study conducted by Deloitte and reprinted in the Journal of Accountancy surveyed 300 executives and 100 members of audit committees nationwide. Their findings point to the usefulness of audits as a business evaluation tool.

  • 79% of executives and 91% of audit committee members agree that financial audits help them identify opportunities to improve business performance;
  • 46% of executives and 62% of the audit committee members believe that audits helped them identify business issues that they might have missed without the audit information;
  • Companies that review and utilize audit information achieved strong growth over a three to five year period (as noted by self-observation.)

Clearly, there is value not just in the audit process itself but in the use of the audit findings for analysis of current operations,

Quality Counts When It Comes to Choosing an Auditor

Throughout the survey, respondents cited the quality of the audit as a key element of a useful business improvement tool later on. A good-quality audit starts with selecting an auditing firm with experience helping nonprofits both through the auditing process and to improve later on.

Audits can provide more than information into the company’s financial state. They can provide market and industry comparisons and analysis. Process analysis, identification of gaps and potential for improvement can also be part of the audit findings. Each of these elements provides an item that can be used as a springboard for action later.

When selecting an auditing firm, look for one with experience working in the nonprofit world. It may also be helpful to find a company that provides more than auditing services. Business consulting, nonprofit consulting, and other related services offered by the auditors mean that they can infuse additional insights into the audit process and continue working with your nonprofit after the audit to implement the changes that you wish to make.

Data and Analytics

Another new area in which nonprofits are finding useful information is the data and analytics that are derived from the audit. Many aspects of a nonprofit’s business can be analyzed. Examining items such as expenses like leases, long-term contracts and expenditures can reveal places in which money can be saved. Long-term donor patterns, grant analysis, and areas where the nonprofit’s work has shifted over the years may also be revealed from an analysis of data patterns found within the audit and the nonprofit’s financial statements.

It takes a special auditor to be able to analyze and detect such patterns. If you aren’t looking for them or for places from which you can derive such information, it can easily be overlooked. Again, choosing an auditor with the insight and experience in the nonprofit world to assist you with your business improvements it the key to success.

Are You Using Your Audit Information?

Are you using all of the information that can be obtained from your most recent audit? According to the previously mentioned Deloitte study, about 35% of the nonprofits responding to the study rarely or never use the information obtained through the audit for improvement. Talk about a missed opportunity!

Why aren’t they using the information? Approximately 48% percent of executives surveyed state that they do not have a process in place to use the information post-audit.

Therein lies the key – process. Develop a process now to use the information obtained from this year’s audit to improve your nonprofit. Begin now to find an auditor who can partner with you to develop a series of action items for follow up. Put in place the teams, groups, committees or leaders within your company who will be accountable for following up on the audit information.

By using these techniques, you can use the annual audit as both a financial document and the start of process improvement.

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.

 

3 Steps to Moving Nonprofit Financial Systems to the Cloud

By | Accounting, Cloud, Data, E-Learning, Nonprofit | No Comments

According to a recent story from Forbes, since 2009 spending for cloud computing was reported to grow 4.5 times the rate of IT spending, and with good reason. What does “moving to the cloud” really mean? In short, the cloud shifts hosted data from on-premise servers to remote servers hosted on the internet. Many nonprofit organizations have made the switch to the cloud, and by doing so they transformed the way they budget, prioritize, and store data.

Oftentimes, nonprofit executives lack the time to consider the cost and benefits of migrating their financial systems to the cloud. A lot of nonprofits are just stretched too thin to give migration a good, solid look. A recent study by NTEN supported a 25 percent growth year after year for nonprofits’ cloud implementation.

To get a handle on the benefits – and decide if it’s a right move for you – we’ve broken down the process of moving to the cloud into three steps:

  1. Identify and weigh the benefits
  2. Recognize potential risks
  3. Establish a strategy

 Benefits of the cloud

 There are many benefits to moving to the cloud including:

  • Accessing data anywhere and at any time
  • Specialized IT experts with cloud service providers, so your team can focus more time on your mission
  • Best-in-class security tools to protect you and your donors

And that’s just the start! Many organizations have reported spending up to 80 percent of an IT budget on maintaining legacy software. With a cloud migration you can increase performance and extend the life of the system by receiving the most up-to-date software. Maintenance will also take less effort because updates are automatic, and organizations always have the most up-to-date version.

Depending on the needs of a nonprofit, the benefits can vary in priority and weight. As a starting point, nonprofit accounting professionals and executives alike need to rate and prioritize the benefits relative to the needs of the nonprofit.

Recognize risks

It’s crucial to be well-informed about the risks of operating in the cloud. Some items to consider:

  • Complexity and duration of the migration
  • Training staff – It is necessary to have a good training plan in place to avoid the frustration that can take place with a new system.
  • Does the cloud provider or your fund accounting consulting offer long-term support? Will you be able to partner with them to help your staff in times of need?

Strategy for moving to the cloud

There is not a one-size-fits-all philosophy with cloud computing migrations. Be sure you can build a road-map that meets the needs and priorities of your nonprofit, including:

  • Cost analysis between the on-premises and cloud-hosted software
  • A plan regarding how the migration will support the bottom line and mission of your organization
  • Research and comparing services from at least three cloud providers

Migrations to the cloud can be overwhelming for many of today’s nonprofit professionals. By breaking down the process into three steps, a plan can be effectively crafted and shared with stakeholders across the organization.

Ready to take the next step? Download our whitepaper that allows you to dig deeper into adopting cloud computing, benefits of migrating, and tips on the best way to research and plan for a move to the cloud. Or contact us online today to set up your free cloud migration consultation.

 

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.

Addressing the Dangers of Cyber Attacks

By | Data, Nonprofit | No Comments

No one is immune to cyber attacks, hackers, viruses and phishing scams, including non-profit associations. Both your organization’s money and its reputation may be at stake.

At Welter Consulting, we want your organization to be safe from such cyber attacks. We offer consulting services to make technology planning easy. Contact us online or call us at (206) 605-3113 to learn more.

Boards Must Lead the Charge Against Attacks

Boards cannot afford to be complacent about cybersecurity. Many nonprofits are too small to have a dedicated IT staff or resources. In those cases, it falls upon the Board as the leadership team of the organization to develop policies and processes to guard against cyber attacks.

How Breaches Occur

Nonprofits may find themselves in the thick of a cyber attack through completely innocent circumstances. An employee may accidentally download an infected file. Someone may be searching for information and stumble across an infected site, leaving a virus in their browser.

These are common ways in which nonprofits become infected with malware. Recently there has been an increase in the number of extortion-related viruses. Such viruses lock users out of their computers until money is paid to someone who supposedly holds the virtual key to unlock the computer. Criminals do not care whether you run a charity for orphans or a financial firm; they take the money and continue their extortion schemes.

Other types of cybercrime include data theft. A data breach in which your donors’ or members’ personal data including names, addresses, social security numbers or credit card numbers are stolen can result in negative publicity for nonprofits and the threat of potential lawsuits. These crimes often aren’t noticed until long after they occur, giving nonprofit leaders a false sense of security. In truth, anyone can be the subject of such an attack.

Taking Steps to Prevent Attacks

Nonprofit board members can take several positive steps to ward off the threat of cyber attacks. While you may not be able to prevent them all, you can ward off many.

Steps you can take include:

  • Encourage management to adopt policies that prevent cyber intrusion. This may include frequent software updates, limits on web browsing, and training to raise awareness.
  • Add cyber insurance to your organization’s coverage to minimize the financial ramifications of cleaning up after a breach.
  • Build a proactive response plan, imagining worst-case scenarios and including steps to take should they occur.
  • Take an inventory of your current cyber security measures to disclose gaps.
  • Close any identified gaps or hire a consultant to do so for you.
  • Evaluate security risks among vendors and suppliers.
  • Find out where the most valuable information is stored – and treat it as you would money in a safe. Take extra precautions to make sure it is secure.
  • Discourage risky cyber practices, such as downloading documents from unknown sites or clicking links requesting that users reset their passwords.

Above all, make cybersecurity a top priority for your company. When boards do so, they send a powerful signal that it is an important topic worthy of employees’ time and effort to address it.

Cybersecurity is like the doors and locks on your home. You invest in strong doors, locks, and alarm systems to prevent burglars from stealing your television and computer. By making sure your cybersecurity efforts are up to par, you’ll prevent virtual burglars from walking off with important assets. You’ll add a layer of safety to your nonprofit that provides better peace of mind.

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.