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 nothing.

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 are three areas in which mid-sized firms lag behind. By lagging behind, they run some risk of 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.


5 Tips for Effective Mentoring

By | Accounting, Mentoring, Nonprofit | No Comments

Mentors play an important role in our lives. From the coaches who taught us to draw from the strength within to the parents, relatives neighbors, friends and teachers who believed in us when we didn’t believe in ourselves, mentors change lives.

So why aren’t business people talking more about mentoring? Part of the reason is that we often think of mentors as something we only need when we first embark on our careers. We think that college students need mentors, not seasoned professionals. Thus, we may inadvertently miss opportunities both to be mentored and to mentor others.

What makes an effective mentor? Here are a few key takeaways on what effective mentoring looks like and how you can give and receive mentorship to others.

Mutual respect: For mentoring to be effective, there must be a feeling of mutual respect between the mentor and the mentee. Mentors must respect the personal space and boundaries of the people they are mentoring, and mentees must respect the wisdom, experience, and boundaries of the mentor.

  1. Accountability: Mentors aren’t just cheerleaders urging you on with praise. Instead, they hold you accountable to your goals and your talents. They know what you are capable of before you know it and they encourage you to stretch to reach higher goals. They call you on the carpet when you fail to live up to your promises.
  2. Trust: The mentoring role involves a great deal of trust. Mentors often trust mentees to take on greater responsibilities. Business leaders may assign tasks and goals to subordinates they are mentoring that feel like they are impossible to achieve, and then guide and encourage mentees to reach those goals. There’s a great deal of trust involved in this process since failure may mean a negative reflection on the mentor. In return, the mentee must trust the mentor’s wisdom in assigning, delegating, and evaluating their work.
  3. Generosity: The mentoring role is one of generosity. Mentors must generously share their time, talents, and feedback with those they are mentoring. You can’t be stingy and be a mentor.
  4. Encouragement: Mentors need to be unfailingly positive, encouraging even in the face of adversity or stumbling blocks. While a Pollyanna mindset isn’t desirable, an optimistic one tinted with reality is the best direction for a mentor.

Other key takeaways include:

  • Mirroring the good in the mentee and reflecting back what is right, true, smart and strong.
  • Teaching new skills and guiding mentees to their strengths.
  • Maturing, in that the mentor has walked the road before the mentee and knows that setbacks are temporary and can be overcome.
  • Positivity, an enduring sense that things will work out for the best.

Finding a Mentor

Given the value of the mentoring relationship, and the fact that mentoring can be a lifelong process, how do you find a mentor as an adult? As a child, teenager or young adult in the business world, mentors seem to come out of nowhere. A favorite teacher, grandparent, neighbor, coach steps into the role easily and naturally, and before we know it, we are learning and growing.

As a professional in the nonprofit world, it can be challenging (but not impossible) to find a mentor. Senior-level executives may find mentors through formal business organizations, nonprofit organizations, or among peer groups.

Reach out to your junior members and provide opportunities for growth and professional development. Slowly build up trust by allowing them to lead projects that increasingly stretch their talents and comfort zones. Guide, teach, and lead, but do not dictate; allow the person’s talents to grow at their own pace.

Keep in mind the concepts of mirror and positivity. Mirroring back the positives and reflecting back the good work without ignoring the mistakes is also an important part of mentoring.

Mentoring can be a lifelong event, one that enriches and supports personal and professional growth. Your organization will benefit from a culture that embraces mentoring and the role of mentors in the organization.

 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.


5 Questions to Measure Fund Accounting System Effectiveness

By | Accounting, Budget, FASB, Grant Management, MIP Fund Accounting, Nonprofit | No Comments

Mandated reporting has become increasingly complex, due to multiple funding sources and programs within nonprofit organizations. You may find yourself having to rely on spreadsheets and workarounds, which can quickly become unmanageable and have a higher risk for error. As compliance, regulatory agencies, funding sources, and complexities grow, these issues can quickly hinder mission productivity and you may be exposed to larger burdens including:

  • System constraints limiting your ability to adapt other new and vital technology
  • Poor financial control which can lead to future loss of time and money
  • Lost opportunities for additional funding because your system is not flexible or robust enough to properly handle tracking and reporting requirements

Sound familiar? If so, you may need a more robust accounting system. Time to ask yourself the following five questions.

Are you facing an upgrade or needing software built for the complexity of nonprofit finance and accounting? Download “10 Reasons Why Nonprofits Need True Fund Accounting™.”

Does my current solution incorporate nonprofit-specific accounting rules?

Audited financial statements must present information in accordance with the Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 116 and 117, or Governmental Accounting Standards Board (GASB) guidelines. If your reports need heavy customization to comply with these guidelines, you should consider software that easily provides compliance-ready reporting.

 Can I easily measure performance of a program or activity?

Nonprofits typically need to measure a program or activity outcome, and track beyond basic financial information – something off-the-shelf, which is something most commercial accounting software is not designed to do. Your software needs to be robust enough to track and report performance or outcome measures on financial statements, as well as budgeting outcome measures for accurate forecasting.

 Am I able to create reports for varying fiscal years?

While commercial accounting often assumes that fiscal years end in the same months each year, nonprofits often have to report to several different audiences, with different information requirements and reporting timelines. Thus, the ability to track and report across different time periods (cross-fiscal & grant-year reporting) is critical for nonprofits.

 Can I easily show how money is tracked or budgeted?

Funds must be treated as distinct entities with their own general ledger and individual revenue, expense, income, and balance sheet reports. Nonprofits need software that will automatically handle the offset postings to cash or payable accounts by fund, as well as the encumbrance processing, grant tracking, and budget controls.

 Can I perform allocations of indirect costs by grantors?

Accuracy of allocations is critical in providing auditors and grantors a complete audit trail, but these allocations typically are not handled well by a commercial accounting system not designed with nonprofits in mind. Allocations need to be performed on virtually any account balance at the program level, department level, or grant level, and across multiple segments at one time with advanced calculation options, including fixed or dynamic percentages, unit measures, and more.


About 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.