Monthly Archives

March 2023

The Top 3 Challenges of Managing Government Contracts

By | Government, Grant Management, Nonprofit | No Comments
person standing in front of sticky notes making decisions

Nonprofit organizations frequently enter government contracts. Whether contracting with town, city, state, or federal government entities, nonprofits provide a valuable service to government entities. This mutually beneficial relationship spans many areas of nonprofit work including education, health and human services, the arts, and much more.

However, there are common challenges that nonprofits face once they have contracted with government entities to provide services. We’re not talking about the obvious initial hurdles that nonprofits must overcome to secure contracts, such as winning RFP bids to be on approved vendors lists and so on. No, we are talking about challenges that arise once the contract is signed and work has commenced.

Below are the top three challenges faced by many nonprofits and possible solutions. Perhaps after reading these, you’ll recognize your own work, and the challenges you face, in similar situations. Some of these dovetail with grant management challenges, so read our article on that topic for additional insights.

Challenge 1: Contract rates do not cover administrative costs

This one can make any nonprofit feel a pinch in the pocketbook. Unfortunately, it’s all too common—in one survey conducted by the state of Oregon, 75% of respondents felt this was the number one challenge when dealing with government-based contracts.

Nonprofits need to clearly assess the overall administrative costs of all contracts and add these costs into the contracted amount. What roles will be required to administer, maintain, and support the contract? What are the salary and related costs associated with the administration, and for what duration should the contract cover them?

To address this challenge requires working with your accounting and finance team to accurately assess costs for future contracts and ensure it is written into the contract itself. If you fail to do so, you could find yourself losing margin on future contracts as administrative costs sap whatever margin you intend to make from the account.

Challenge 2: Timelines are unrealistic

This is another challenge frequently encountered by nonprofits—the timelines given to them by the government agency to achieve a stated goal are considered unrealistic. Perhaps the government wishes to see a change of X percent in Y days, but given your knowledge of the issue, that is impossible.

First, ascertain where this time pressure is coming from within the government entity with which you are conducting business. Is it coming from a politician eager to gain votes? Or is it from a time-pressed bureaucrat who simply doesn’t understand the work itself?

It’s important to determine the source of the timeline pressures so you can address them. If it’s coming from people eager to see results (and enhance their standing within the organization) then sitting down with them and helping them to understand why a slower approach may be beneficial is essential. They may agree with you that more time is needed to get better results, which will also reflect well on them.

But do your part as well when negotiating contracts. Oftentimes nonprofits are so eager to secure government contracts that they do a poor job estimating how long it will take to achieve the desired results—or they do not have all the information necessary during contract negotiations to make a sound estimate. Adding some padding to timelines ahead of the project may give you enough grace to successfully achieve the desired outcomes or at least negotiate a longer timeline.

Challenge 3: Burdensome reporting requirements

Red tape, red tape, and more red tape—if you feel like you’re tangled in it, you’re not alone, as many nonprofits in the previously cited Oregon study also felt that reporting requirements were often burdensome.

To make reporting less burdensome, keep good records along the way. Using a cloud-based fund accounting system can make the financial reporting easier, for example, as it can directly chart expenses and revenues to specific budget lines.

Some nonprofits find that having a staff member on the team dedicated to the government contract and solely responsible for reporting requirements takes the burden off the rest of the team, enabling them to deliver services without worrying about completing the proper reports  You may wish to plan on a portion of a team member’s time for this function for your next government contract to avoid the feeling of always working on reports, rather than the delivery services for which your organization has been contracted.

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 us for more information.

Managing a Hybrid Team? Here’s What to Know

By | Corporate Culture | No Comments
people in office on computer call with several others

Many managers found themselves facing an unusual management dilemma during the pandemic: hybrid teams. The skills needed to manage people in person differ from those needed to manage virtual and remote employees. Blending both teams together to work toward common goals requires a high degree of commitment, communication, and clarity. Here are our tips to hiring for hybrid and remote work and successfully managing hybrid teams.

Structure Jobs Around Responsiblities (Not Hours)

One of the biggest shifts in thinking when it comes to managing remote workers is thinking about their work in relation to the work product, or responsiblities, rather than the actual hours the employee puts into the job.

You cannot manage people who work remotely as you do people who work on-site. You will not have the ability to monitor their productivity, see how long they’re taking for lunch, or whether they are making personal phone calls throughout the day. What you can do instead is create goal-based work. In goal-based work, an employee and manager agree on goals and work outcomes each week. Typically, Mondays are days for meeting one on one or in small groups with virtual teams and coming up with the week’s goals. Wednesdays are a good day for a quick check-in, with work products due on Fridays. The work product may not be the entire project, but instead, milestones that can be easily achieved on a weekly basis.

This is a form of “agile” project management coined from the book Scrum, a system of project management and team management derived from the tech world that has been successfully deployed in many other industries. It is ideal for managing remote employees and hybrid teams, especially in highly skilled industries such as accounting, marketing, fundraising, operations, and so on.

While much more can be said about this style of management, as a manager overseeing hybrid and remote workers, it is imperative that you stop thinking about them in terms of hours spent on the job and instead think about what they’ve accomplished for the week. This distinction and focus will ensure that your hybrid workers have clear, unambiguous goals to reach which can then be used as performance metrics for evaluation.

Set Firm Boundaries and Expectations

With everyone on instant messaging platforms and connected 24/7 via smartphones, it’s easy to meld personal and professional time together in ways that a decade or more ago would have been unthinkable. Setting clear boundaries and expectations around communications is an important step in ensuring that hybrid teams work well together.

Establish guidelines for returning messages, whether they are on text or messenger platforms of email. One good rule of thumb is that all texts or messages must be returned within 24 hours on business days and by Monday, if sent over the weekend. Emails should be answered within one business day. Stating these guidelines will help the entire team understand their communication commitments and communicate easily and clearly with one another.

Make Hybrid Workers Feel Part of the Team

Lastly, it takes effort to ensure that hybrid workers not only feel part of the team but understand the company culture. Yes, even if someone works 100% remotely, they can still feel the company culture.

What is your company culture? What can you do to infuse it into a hybrid workspace?

First, be sure to take your time onboarding remote employees effectively. Provide an orientation to the company just as you would for an in-person role. You may not be able to physically walk them around the office to show them where the break room and supply cabinet is located, but you can orient them to the organization’s chart, so they know who does what, help them understand their tech stack, and locate items on the cloud drive.

Another important step toward ensuring that hybrid employees feel like they are a part of the team is to ensure they are included in all company get togethers. Plan virtual gatherings as well as in-person ones. Catering lunch in for birthday? Offer them Grub Hub (or whatever is available in their area) and get them on a video call to join the festivities. Keep them updated on company happenings and ensure that from day one, they feel part of the team, too.

Managing any workforce takes skill, but it takes a special manager to ensure that a hybrid team feels and acts like one cohesive unit. With time, patience, and consistency, you too can successfully manage hybrid teams.

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 us for more information.

Where Have All the Accountants Gone? Fixing the Accounting Employment Crisis

By | Accounting | No Comments
accountant at desk with spreadsheets and laptop

There’s a crisis going on right now in the accounting profession, one that’s probably gone unnoticed by many—until they post a help wanted ad. Then, it quickly becomes apparent that the applicant pool has shrunk. And, among those who are applying, the requisite skills for some specialized jobs, such as nonprofit accounting and auditing, are lacking.

What’s going on?

According to the CPA Journal, fewer people are majoring in accounting in college, and fewer still are entering the profession once they become part of the workforce. For every accountant who retires, there are fewer and fewer to take their place. This problem hasn’t gone unnoticed. The SEC issued a warning that the lack of CPAs may create financial reporting problems in the future.

Yes, Baby Boomers are retiring, and fewer people are entering the profession, but there are also myriad other factors at play. The pandemic exacerbated many of the profession’s challenges, encouraging some to take early retirement and others to cut back their working hours to spend more time with family. Others simply decided they’d had enough of the long hours, stress, and lengthy commutes to work, and chose to step back from their careers either permanently or temporarily.

Many professions are undergoing similar challenges. What can we do to encourage more young people to embrace accounting as a profession and to ensure that there are successors in place for the much-needed CPAs in our companies?

Improve Perception and Increase Awareness

Let’s face it: the accounting profession has a branding issue. It’s long been associated with gray suited “bean counters” who tap calculator keys all day and manage taxation issues. Few students are aware of the multifaceted and challenging roles that accountants fill, or the many career opportunities in the field. Outreach to schools, mentoring young people, and offering internships in an accounting office are all ways to bring young people in direct contact with accounting professionals so they begin to see that it’s not all number crunching and more about challenging projects, problem solving, and business management.

Additionally, it’s important to let young people know that accounting is a “steady job” —something that not only pays well but is always in demand. In a world in which many jobs have been phased out over the years or lost to automation, accountants will always be in demand no matter how much automation is put into place in the office. Automation can only offset some of the tasks faced by accountants. It cannot replace the critical thinking and problem-solving skills that a good CPA brings to the role.

Steps to Offset the Accounting Labor Shortage

Encouraging young people to enter the accounting profession is the long-term solution. Short term, you may be faced with vacancies that remain unfilled or longer periods when you’re shorthanded. To compensate for those times when there aren’t enough professionals to fill the many roles needed, here are a few ways to offset the accounting labor shortage:

  1. Automate: Okay, so we said automation can’t replace a CPA. It certainly can’t, but it can take many time-consuming tasks off the CPA’s plate. Using a good accounting software platform that incorporates automation into the workflow can save time and enable an accountant to get more done each day.
  2. Focus on critical tasks: When you’re shorthanded, everything seems critical. But what tasks can someone else tackle? An assistant may be able to help with accounts payable or receivable, but the CPA may need to focus on audits, compliance, budgeting, or other critical tasks. Focusing on the tasks only you—the senior level CPA or accountant—can handle and delegating other tasks helps save time and ensures that your much-needed skills are put to good use.
  3. Spotlight high-risk areas: Focusing on mission critical tasks and on high-risk areas ensures that the senior accountant’s time is spent on items of primary importance to the business. Identify risky areas and focus attention on them to ensure they are taken care of properly.

Solving the accounting labor shortage is not something a single individual can do, and it won’t be solved in a day. However, as a profession, there is much that can be done, and our collective focus on the problem and potential solutions should begin now.

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 us for more information.