Here’s Your Sign – Finance Department Problems (and How to Fix Them)

By | Nonprofit | No Comments

Everything looks rosy from the outside. The finance department, however, has trouble brewing just under the surface. How can you tell? Welter Consulting has the experience to see and fix problems where they start. The finance department of a nonprofit is often the most overlooked place. After all, it’s all about the mission – right?

Well, yes and no. Nonprofits need margin to achieve their mission: no margin, no mission, no nonprofit. The finance department is the team charged with planning and managing the financial resources of the organization. Without a well-run finance department, there will not be enough capital to run all of the programs, services, and other activities for the organization.

There are certain telltale signs of dysfunction in the financial department that we’ve learned to spot over the years. We also work with teams to identify problems and help them fix them.

Sign #1:  Unclear roles and responsibilities

Suzy handles accounts payable and any incoming checks, but John is the accounts receivable clerk. Oh, and he’s also in charge of petty cash and updating the finance software because he’s good with computers.

If that sounds like a mess, it’s because it is. Over time, many nonprofits find that roles and responsibilities shift and change. Instead of aligning people and roles, people are allowed to assume various roles according to their time and talents. New skills needed for the finance department, such as John’s penchant with computers, end up glommed onto current roles without rhyme or reason, except that the original person who agreed to accept the task liked the idea of it.

Unclear roles and responsibilities can cause many problems. If roles aren’t clear, it is hard to hold people accountable for them. This leads to blame and finger pointing, open-ended tasks, and lack of accountability.

To fix this problem, conduct annual reviews of job descriptions. Ask employees to update their job descriptions so that any new tasks they may have taken on during the year can be evaluated in light of their role within the organization. Once you get the big picture of who does what, you can determine if a new position should be created or if some other type of change is warranted.

Sign #2: Multiple General Ledger Accounts

This one makes our heads hurt: when a company ends up with multiple GL accounts because the GL isn’t set up to sort items the way the organization needs them. We’ve seen this happen when nonprofits attempt to force software from the for-profit industry to work for their needs; it’s a square peg, round-hole type of problem, and the fix often involves multiple GL accounts so that the final reckoning matches what the nonprofit needs. Unfortunately, what happens is a confused muddle of accounting that takes longer to untangle than it does to work with it on a productive basis.

Welter Consulting can help. We can match you with nonprofit software that works with your needs, not against them. And, because we have experience in the nonprofit financial and accounting world, we can straighten out your GL too and help you sort through any other accounting muddles created by ill-matched accounting software and needs.

Sign #3: Manual Processes

The computer sits right on the desk, with the accounting software open. The payables clerk writes paper-based checks. “It’s just easier,” she said.

It may feel more comfortable, but there’s the time spent entering the checks back into the accounting system, reconciling the bank account and everything else associated with paper checks, not to mention the time it takes to mail them. And the postage – did you know that the cost of first-class mail is once again going up?

Many nonprofits fail to utilize the technology available to them. We can help. We work with nonprofits to provide training and guidance on how to use existing technology, how to boost productivity through efficiency and better systems, and more.

Sign #4: Manual Reports and Spreadsheets

You have the computer programs; you have the data. But you’re still pulling data from the accounting program, importing it into a spreadsheet program, and manipulating it there to obtain the reports that you desire.

Sounds familiar? This is quite common but entirely avoidable. Most accounting programs for nonprofits offer robust reporting capabilities. If you’re not obtaining the reports that you need from your current system, it’s time to investigate new ones.

Spreadsheets are fine when you’re starting, but as your nonprofit grows, they are time-consuming and error-prone. Automated reports offer convenience, accuracy, and flexibility – if you have the right system!

Welter Consulting can help. We bridge the gap between people and technology and specialize in the world of nonprofits. Let’s discuss your reporting needs and find the right software for you. It’s faster and better than using spreadsheets, that’s for sure.

Sign #5: Lack of Goals and Objectives

Does your financial team have clear goals and objectives? You may have them within the department but lack alignment with organizational goals.

Yes, it’s great that you have your own team goals, but how do these align with everyone else’s? Consider the impact that financial knowledge makes on other departments. The more you share information, the better off everyone will be throughout the organization. Aligning your goals and priorities with the overall goals of the organization and ensuring that financial goals are part of every department’s objectives, as well as sharing the organization’s economic outlook with other departments, helps align the finances with the activities and vice-versa.

Do you need some help with establishing goals and objectives? We offer comprehensive business management and support for nonprofits and can help you develop goals, share financial data, and more. Training, audit support, and other nonprofit financial and technology services are also available.

Yes, there are signs that the finance department needs help. Fortunately, the fixes are at your fingertips, and if you need assistance, we’re only a phone call away.

Call 206-605-3113 or contact us.

Tips to Offset the Postal Price Increase

By | Government, Nonprofit | No Comments

Just when you thought it was safe to send out more direct mail, the United States post office announces an increase. This year’s 10 % rise represents one of the most significant price hikes in the cost of a first-class stamp from .50 cents to .55 cents per ounce.

For those nonprofits who use both DSCF (nonprofit bulk mail) and first class mail to solicit for donations, it’s a double hit: both first class and DSCF are going up this go-round.

Most nonprofits take advantage of the post office’s third-class nonprofit rate which saves considerable money on mailings. This bulks price must be obtained after securing nonprofit status with the United States post office and using a special indicia on outbound mail with a nonprofit permit number.

However, even with the nonprofit rate, the price of nonprofit bulk mail has gone up too, rising twice the rate of inflation from 4.8 to 5.5% for destinational sectional center facility (DSCF).

Save Money on Mailings: What You Can Do Now

It’s a shame that the price increase impacts nonprofit organizations. Nonprofits remain one of the post office’s most prominent customers as fewer people send cards, letters, and other mail via first class, relying on email and texting instead.

But what’s done is done, and now is the time not to complain but to act to reduce the cost of mailings. Here are a few steps you can take to keep prices down:

  1. Clean up your mailing lists: Work with a mail service provider or list vendor to clean your lists. The mailing list should be cleaned annually of old, unusable addresses, incomplete addresses, returned mail, and duplicate mailings. Mailing list data handlers can access files from the post office of people who have moved or died during the past year; they can then update those who have moved and remove the deceased persons from your mailing list. This alone can update a list so that less mail ends up in the trash or undeliverable.
  2. Stop sending trinkets: Although many nonprofits send items such as stickers, cards, and pens to potential donors, these add to the cost of the mailing. Instead of sending return address labels, consider uploading something printable to your website and inviting people to download it. Not only will you save on the cost of outbound postage because the envelopes weigh less, but you can track the open rate of your letters by determining the percent of recipients who received the letter and downloaded the freebie.
  3. Talk to your printer: Printing companies offer people who are experts at their craft and who can advise you on ways to reduce the cost of your mailings. For example, an experienced printer can suggest an alternative paper for your printing job that cuts the weight down of each envelope and reduces the cost per piece. Printers can also recommend the best times to mail so that your nonprofit mail isn’t swimming against the tide of high volume or better ways to batch your mail so that you achieve the maximum postal discounts possible.
  4. Improve your ROI: As costs of direct mail increase, the need to achieve a mailing ROI increases. To improve your direct mail, consider A/B tests, which test a control (a mailing package with a known response rate) against a test piece (the same package with one element changed, such as the design or the copy inside). By continually testing and improving with each mailing, you’ll be able to improve your ability to meet or exceed the mailing ROI.
  5. Increase online donor solicitations: Learn to use all forms of online donor solicitations from better email outreach to social media. Although direct mail remains a popular and effective method of meeting fundraising goals, the more expensive it gets, the more you may need to switch to online fundraising.

Although the postal price increase is a ‘done deal’ and effective in 2019, the impact upon your nonprofit isn’t signed, sealed, and delivered. You can affect and mitigate its effects by using these steps to counteract the steep postal price increase.

Welter Consulting

Welter Consulting bridges people and software technology to help nonprofits be more efficient and effective. We work exclusively with nonprofits and have the experience necessary to help them build, grow, and develop over time. We invite you to contact us for any assistance you need with nonprofit technology and business solutions. Call 206-605-3113 or contact us.

Make Your Auditor’s Life Easy This Year – Pay Attention to These Five Things

By | Audit | No Comments

All auditors have their particular worries, those things that keep them up at night. Do your auditors – and your nonprofit – a favor this year. Preemptively tackle these five things that tend to keep auditors up at night and make sure your audit runs smoothly.

Five Things Your Auditor Wished You Knew

If auditors could tell you in advance of things that worry them, they might bring up these five points. Each of these has a simple fix. You can tackle it in advance to help make your auditor’s job easier and the audit smooth-sailing.

  1. Cybersecurity: Among all the things that keep auditors up at night, weak or non-existent cybersecurity is a biggy. And for a good reason: the number of data breaches continues to soar with nonprofits affected just as much as for-profits. Nonprofits may be targeted more frequently than for-profits because criminals know that nonprofits have weaker defenses against cyber intrusions, data breaches, trojans, viruses and other methods to compromise cybersecurity. What do criminals target? Personal data offers a treasure trove of tempting ‘jewels’ for a cybercriminal to steal; donor information, member information, credit card numbers, and other data entice thieves.

Why auditors worry: Cybercrimes can be expensive and result in lawsuits. They can also tarnish the name of a nonprofit, making it difficult for them to continue their work or solicit donations in the future.

The fix: Remind staff not to open suspicious emails. “Phishing” schemes often begin with a simple click through in an email. Don’t download ‘free’ software as some of it may be infected with trojans, malware or viruses. Do add the best virus scanning protection you can to your system and back up data offline. Update software frequently as recommended by the maker since software patches often fix known gaps in code that allow cybercriminals access.

  1. New software: Along with cybercrimes, new software often makes auditors want to pull their hair out. Nonprofits that rush ahead and spent on new software without performing their due diligence may end up with packages that offer too much, too little, or incomplete services.

Why auditors worry: Software can be expensive, and inadequate research into software capacities may lead to unnecessary expenditures.

The fix: Work with a good reseller or consultant to identify needs and find software that fits your nonprofit’s budget. Compare prices, examine existing software to see if you can use it for additional purposes, and find ways to make do with what you have until you finish exploring all options. Discuss software purchases with your auditors in advance to obtain their input, too.

  1. Compliance with funder requests: Grants and donations may come with strings attached. Funders may have multiple requests, each very different, that if unmet, may result in money being canceled. It can be challenging to track, manage, and respond to all funder requests.

Why auditors worry: If a nonprofit does not comply with a funder’s requests, the nonprofit may lose the source of funding.

The fix: Conduct regular compliance audits to ensure that requests are met. Determine areas of overlap and continuity. Create a staffing plan for training so that staff is aware of requests and how to meet them. Keep accurate records and update them frequently to track, measure, and record progress towards meeting funder’s requests.

  1. Financial controls: Nonprofits must balance the need to do good against the need to make margin so they can continue to operate. Nonprofits operating in a global market must worry about accepting cash and controlling cash transactions, while new technology that enables transactions online must also be tracked and measured.

Why auditors worry: Auditors worry about compliance with international standards and laws, monitoring cash flow, and ensuring that cash transactions are accounted for at every step of the way.

  1. Fraud and corruption: No one wants to think about cheating or corruption within their organization. Nevertheless, it can happen, even to the best organizations and people.

Why auditors worry: They worry for obvious reasons – fraud and corruption can lead to nonprofit failures.

The fix: Start with smart hiring procedures that include background checks for all new hires. Include internal controls among all accounting procedures. Provide methods for staff to anonymously report wrongdoing so that “whistleblowers” feel comfortable reporting anything they have observed. Training, procedures, and transparency are all ways to prevent potential fraud.

 Smart Nonprofits Partner with Their Auditors

Auditors are more than just individuals or companies who “audit the books” of a nonprofit organization. They can be valuable allies in the quest to build a sustainable, strong nonprofit organization that meets its objectives and achieves its mission.

The first step is, of course, finding an auditing firm who can become a true partner and asset. Welter Consulting bridges nonprofits and solutions to help them find technology that works for them. We invite you to contact us for any assistance you need with nonprofit technology and business solutions. Call 206-605-3113 or contact us.

Nonprofit Leadership: What It Takes to Succeed

By | Nonprofit | No Comments

We hear a lot about leadership these days. Types of leadership, failures of leadership…but what does it actually take to be a successful leader, especially in the world of nonprofits?

A recent GuideStar article profiles three nonprofit leaders: Nora Moreno Cargie, Karen Voci, and Audrey Shelto. All three lead not-for-profit health plans. Some came from for-profit backgrounds. All are thriving in the world of nonprofit leadership.

Lessons from the Leaders

What’s so unusual about these three leaders isn’t their backgrounds but the level of collaboration and communication among them. Here are five facts about these leaders and what we can learn from their success at the helm of their nonprofits.

  1. Successful leaders collaborate: Nora, Karen, and Audrey prefer collaboration with one another to competition. While they could view each other’s nonprofit as a competitor, instead, they view each other’s organization as an opportunity to learn. They meet regularly with one another and exchange ideas as well as support.
  2. Servant leadership works: The notion of servant leadership, or a leader who is the servant of their employees, sounds far-fetched, but it can and does work. Several of these leaders embrace a servant leadership mindset and find it works very well in their nonprofit cultures.
  3. Honesty and directness gain respect: Another characteristic of these three nonprofit leaders is their honesty, directness, and forthrightness when it comes to communicating with their teams. None of these people pull punches when it comes to disseminating information or speaking to their organizations. And, as a result, they command a great deal of respect. Leaders often assume they must only communicate what others want to hear, but these three leaders demonstrate that honesty often gains more respect than prevarication when it comes to leadership. People want to hear the truth from their leaders and respect those who offer it.
  4. Seek new solutions: It’s easy to get locked into the status quo. Those who become great leaders remain open to new ideas and possibilities. These three leaders keep an open mind and often seek new solutions in unexpected places. Instead of remaining content with the existing paradigm, they always strive to improve their organizations in every way.
  5. Lift people up – don’t put people down. Lastly, these leaders know that in order to succeed, you have to lift people up; that means supporting coworkers, colleagues, and teams. It means expanding the organization’s mission to embrace a vision which extends beyond the immediate or obvious. Vocci, for example, expanded the organization to encompass regional health initiatives and healthy living advocacy. Although not necessarily part of a health plan’s work, it supports a broader goal that aligns with the overarching mission of the organization.

Top Leaders, Top Thinkers

All three of the leaders profiles by GuideStar aren’t just top leaders, they are also top thinkers. They lead with their heads but include their hearts, often comparing ideas with one another. They also know that all work and no play makes for a dull C-suite executive. They find time to network over meals and even take in the occasional play together.

The result? Three leaders, passionate about what they do and well respected in their organizations. They’re taking their organizations to new places and new successes. Collaboration, communication, and strong leadership along with intelligence and drive are a potent combination for nonprofit success.

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.