Monthly Archives

August 2023

Aug 30
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Choosing the Right Nonprofit Accountant

By | Accounting, Nonprofit | No Comments

Why hire an accountant who specializes in nonprofit accounting? Why not keep managing the books on your own or hire your third cousin, who was once a small business bookkeeper, to manage your accounts?

If you’re looking to cut corners and save budget—don’t do it when hiring an accountant, especially a nonprofit accountant. Choosing the right nonprofit accountant is one of the most important decisions when managing your organization. Here’s why you need a great nonprofit accountant and where to start your search.

Why Look for an Accountant with Nonprofit Experience?

Nonprofit accounting is different from for-profit accounting. Okay, this may be an obvious statement, but it’s often surprising that some organizations fail to recognize this critical fact. Nonprofits must comply with extensive regulations and requirements to maintain their tax-exempt status. Failing to do so can be catastrophic to an organization.

Many corporate or small business accountants do not have the experience or knowledge of nonprofit accounting to manage some of the issues facing nonprofit compliance. An experienced nonprofit accountant knows what to look for and where to go for more information and can confidently steer your organization’s finances.

The Right Nonprofit Accountant Helps Improve Efficiency

If you’re the CEO or president of your organization, and you’re the one still managing the accounting function, think of the time you could save if you had an experienced, trustworthy, and knowledgeable accountant handling it instead.

How many hours do you spend daily, weekly, or monthly completing routine accounting tasks? What about advanced accounting and financial needs such as forecasting, budgeting, analysis, and planning?

A nonprofit account will bring with them many years of experience. They will know the steps to take and the systems to put into place to streamline your organization’s accounting processes.

Another area in which a nonprofit accountant plays a pivotal role is selecting software to improve efficiency. This may mean accounting software, but it could also be in choosing the best grant and donor management software, data and analytics processing software, or other types of software that can improve sales, marketing, and operations efficiency.

Having a true accounting leader on your team will free up considerable time, ensuring that the financial items are handled appropriately, quickly, and confidently. It will greatly improve efficiency both for you and your entire team.

Improved Protection Against Fraud

It’s a sad fact that fraud continues to plague the nonprofit realm. According to the Association of Certified Fraud Examiners (ACFE) 2020 Global Study on Occupational Fraud and Abuse, 35% of nonprofits lack internal controls. Internal controls are systems and processes that prevent common types of fraud, such as stealing cash, padding expenses, etc.

In over 17% of the cases cited in the study, audits or internal management spotted the fraud. In many cases, nonprofit management received a tip that fraud was occurring.

With the right nonprofit accountant on board, not only can you put strong internal controls into place to guard against fraud, but you’ll also have a leader available who others can trust with information about possible fraudulent activity. Thieves often act impulsively, taking advantage of opportunities (such as an unlocked petty cash box). Having someone experienced in nonprofit accounting leading the efforts against fraud and theft within the organization can make a significant impact.

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.

Aug 25
0

More than Numbers: The Changing Role of the CFO

By | Accounting, Corporate Culture, Nonprofit | No Comments
person standing in office space to represent CFO

The role of the Chief Financial Officer (CFO) has been evolving for many years, and it is changing at the speed of light. Gone are the days when the CFO was solely responsible for the company’s financial health. Today’s CFO, while most likely holding an advanced degree in accounting or finance, must also be equally savvy in information technology. This role now interacts equally with IT, Sales, Marketing, and Operations, adding a valuable perspective to other areas within an organization.

Here, we look at the changing role of the CFO and what it might mean to your nonprofit.

The Modern CFO: Where Technology and Finance Meet

Throughout the accounting profession, technology has become an ever-present companion to the routine of credits, debits, invoices, payments, and payroll.

Smart accountants keep up to date with the latest tools and technologies available to enhance their productivity:

  • Cloud-based accounting programs that provide robust yet cost-effective financial management
  • Data and analytics programs that provide additional insight into forecasting, analytics, and financial health
  • Grant and donor management software which enables organizations to manage financial outreach activities more effectively and track activities to income
  • SMS and text messaging platforms that can be linked with donor management programs for immediate financial outreach
  • Artificial intelligence as incorporated into existing financial tools to pinpoint errors and speed lookup of important information
  • Developments in blockchain, cryptocurrency, and related fields
  • Cybersecurity, so as to protect critical information in the finance department from theft, hacking, and extortion
  • Best practices from the for-profit world in sales, marketing, and operations, which may be adapted to the nonprofit world

As you can see from the list above, the CFO, as leader of the organization’s financial team, needs to stay abreast not just of the typical regulatory compliance issues but the realm of software and technology.

CFO and CIO: Collaboration to Achieve the Same Goals

Although the daily tasks of the CFO and CIO may differ, there are many areas of overlap between their roles today. Shared goals among the C-suite leaders of an organization mean that the two roles must work in tandem to achieve positive outcomes.

The CFO should be included in any major software selection processes. Many become the Executive Sponsor of a software project, providing teams with a valuable link to the leadership team to represent their work. Their unique insights into how a particular platform or software will impact efficiency, productivity, financial health, etc. are invaluable.

Other areas where the CFO may be concerned with technology include protecting critical data. The finance or accounting team may process donations, membership fees, and other financial transactions that contain personally identifiable information. Such information is a tempting target for thieves. The CFO must know the basics of cybersecurity and work closely with the CTO or CIO to ensure data is kept secure. This includes customer information, donor information, credit card information, and sensitive organizational financial data.

Because the CFO understands all areas of the organization, they should be an essential voice in any decision involving technology. But don’t limit your CFO to money and tech. They also play a vital role in marketing, sales, and operations, sharing their experience and a keen eye for efficiency and cost savings with the team.

The changing role of the CFO has opened exciting vistas for this once-strictly financial position. Variety is the spice of life, and for those interested in finance and accounting, embarking on a career that leads to the CFO chair means an ever-changing field of growing opportunities.

‌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.

Aug 23
0

Five Financial Forecasting and Analytics Best Practices

By | Accounting, Nonprofit | No Comments
people in office space with graph printouts on table

With the right software and data, financial forecasting and analytics best practices can inform decision-making to help an organization grow.

Unfortunately, many organizations only conduct financial forecasting and analysis at the start of their fiscal year. Periodically reviewing the data, updating your analysis, and providing updated forecasts can help managers adjust their plans to compensate for new insights.

Using these five financial forecasting best practices, your organization can proactively adjust course before significant changes impact your organization.

Best Practices for Forecasting and Analytics

  1. Evolve beyond budgets written in stone. Many organizations start their new fiscal year with a budget. Managers take the approved budget as if it’s written in stone. Instead of treating forecasting and budgeting like an unshakeable law, approach it as an ongoing conversation. It helps to work with managers frequently on their budgets to assess how they’re tracking against goals, KPIs, and budgets.
  2. Share the results of working with data. It can be challenging to ask managers to spend time working with their data in preparation for forecasting and analysis. Some may view the request as a waste of time. Share with managers how their data impacts important choices within the organization so that they feel empowered and invested in the analytics process.
  3. Ask the right question: Far too often, forecasting conversations become more of a conversation of expenses than how spending aligns with the organization’s mission, vision, and strategic plan. By asking the right questions, you can help people think differently about budgeting. Good questions include: What happened last (month, quarter)? Does this match what you expected? If there’s a difference, what is it, and why did it happen?
  4. Focus on tasks with strategic importance: All too often, forecasting and analysis get pushed to the side to make way for urgent tasks like reconciling credit card and banking statements, sending invoices, and other more pressing accounting tasks. Block time on your calendar, monthly or quarterly, to work on forecasting and analysis.
  5. Automate the process: The right software dramatically improves accounting efficiency. This is especially true when managing budgets, forecasting, and analysis. Accessing timely and accurate data through a software program is much easier (and faster) than managing multiple spreadsheets and reduces the chance of data entry mistakes. It also makes the process less painful for managers since the data they need is easily accessible.

Automation Helps You Move Forward

Nonprofits that thrive throughout changing conditions do so through smart strategic planning. This includes budget analytics and forecasting. The right software solution enables users to improve efficiency.

If your organization is still managing its financial processes via Excel spreadsheets, it’s time to consider updating your accounting program. Newer, more cost-effective cloud-based platforms offer nonprofits accounting software options made for nonprofit budgeting. These programs include features such as tracking expenses and income back to specific programs or budget items, grant reporting, data and analytics, forecasting, and more.

Now is a great time to consider your options and incorporate accounting best practices such as nonprofit accounting software.

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.

Aug 11
0

A Comprehensive Guide to In-Kind Donations for Nonprofits

By | Donations, Nonprofit | No Comments
people with boxes and food. Welter Consulting logo

In-kind donations are a valuable resource for nonprofit organizations, providing them with essential goods, services, and expertise to support their mission. In this blog post, we will explore the ins and outs of in-kind donations, including their benefits, best practices for soliciting and managing them, and how nonprofits can maximize their impact. Whether you’re a seasoned nonprofit professional or just starting out, this guide will equip you with the knowledge and strategies to effectively leverage in-kind donations for your organization’s success.

Understanding In-Kind Donations

In-kind donations refer to non-monetary contributions made to nonprofits, such as goods, services, or professional expertise. These donations can range from tangible items like clothing, food, or equipment to intangible resources like pro bono legal services or marketing support. By receiving in-kind donations, nonprofits can access valuable resources that might otherwise be beyond their financial reach, enabling them to allocate more funds toward their core programs and services.

Benefits of In-Kind Donations

In-kind donations offer numerous benefits for nonprofits. Firstly, they help diversify and expand the range of resources available to support the organization’s mission. Secondly, they allow nonprofits to enhance their operational capacity by reducing expenses and leveraging the expertise of skilled professionals. In-kind donations also foster strong community partnerships, increasing the visibility and credibility of the organization while engaging individuals and businesses in its cause.

Soliciting and Cultivating In-Kind Donors

To effectively solicit and cultivate in-kind donors, nonprofits should implement a strategic approach. Start by identifying potential donors who align with your organization’s mission and values. Develop a compelling case for support that highlights the impact of in-kind donations on your programs and services. Craft personalized outreach messages and leverage various communication channels to reach out to potential donors. Building and nurturing relationships with in-kind donors is crucial, so ensure timely and meaningful acknowledgement of their contributions and keep them updated on the impact of their support.

Managing In-Kind Donations

Proper management of in-kind donations is essential for maximizing impact. Establish clear policies and guidelines for accepting, valuing, and documenting in-kind contributions. Regularly communicate your organization’s needs to potential donors and maintain an up-to-date wish list of desired items or services. Implement effective inventory and tracking systems to ensure proper utilization and distribution of donated goods. Additionally, explore opportunities to leverage in-kind donations for fundraising events, auctions, or volunteer recognition initiatives.

Recognizing and Stewarding In-Kind Donors

Recognizing and stewarding in-kind donors is crucial for maintaining strong donor relationships. Express gratitude through personalized thank-you letters, social media mentions, and/or public acknowledgments. Consider offering exclusive benefits, such as invitations to special events or volunteer opportunities, as a token of appreciation. Regularly update donors on the impact of their contributions, sharing success stories and testimonials that demonstrate the tangible outcomes made possible by their support.

In-kind donations play a vital role in supporting the work of nonprofit organizations. By understanding the benefits, implementing effective solicitation and management strategies, and recognizing the generosity of in-kind donors, nonprofits can harness the power of these contributions to further their mission. Embrace the guide provided here to navigate the world of in-kind donations and unlock new avenues of support for your organization. Remember, the impact of in-kind donations extends far beyond their immediate value—they are a testament to the collective effort of individuals and businesses coming together to make a difference.

Welter Consulting Can Help!

If you require further guidance on optimizing your in-kind donation strategies or need assistance with nonprofit management, consider contacting us! Our expertise in providing software solutions and consulting services for nonprofits can help streamline your processes and enhance your overall organizational efficiency. Visit Welter Consulting’s website to learn more.