Monthly Archives

September 2024

Sep 24
0

The Role of Security Champions in Your Organization

By | cyber security, Nonprofit | No Comments
person sitting in office chair in front of several computer monitors with fists in the air

The Cyber Peace Institute calls nonprofits “cyber poor, data-rich.” According to the Tech For Good 2023 report, 27% of nonprofits worldwide have experienced a cyberattack.

This combination of enticing targets and low preparation for cyberattacks makes nonprofits especially vulnerable. Whether hacking, phishing, email scams or other forms of cyberattack, nonprofits fall victim to them the same as for-profit companies, but often lack the tech resources to ward off attacks or fight back.

This is where having a security champion in your organization can help. A security champion is a member of the team who takes on added responsibilities for cyber security. Even if they do not have advanced training in this field, they can still do a great deal to help your organization fend off, prepare for, or respond to an attack. Here’s how appointing a security champion can benefit your organization.

Keeping Security Top of Mind

The main responsibility of a security champion is to keep cybersecurity at the forefront of the entire organization’s mind.

Everyone is busy, and it’s easy to forget about cyber security amid a workday with phones ringing, emails and text messages every minute, meetings and more. The cyber security champion ensures that everyone, in every department, is aware of the latest threats, understands how to spot them, and knows what not to fall for when criminals come knocking at the virtual door.

These responsibilities may include:

  • Education: Many cyberattacks succeed not through sophisticated technology but by tricking employees into divulging passwords and other sign-on credentials. Security champions spend time learning the tricks, then teach their teammates how to spot and avoid them. This education is ongoing. It is never “once and done.” It raises awareness of potential threats and teaches everyone how to spot and avoid them.
  • Best Practices: Criminals find new ways to infiltrate systems and steal data. The security champion reads up on the latest findings and ensures that everyone is aware of the latest best practices.
  • Risk Assessment and Threat Modeling: The champion identifies potential risks and provides threat modeling and risk assessment.
  • Incident Response: Security champions create incident response plans. They evaluate risks and provide a framework to respond if a breach occurs.
  • Other areas in which a security champion may be helpful include security evaluation, code testing, and continuous improvement suggestions.

But My Organization Is Too Small for a Security Champion!

No organization should take cyber security for granted. The average cost of a data breach, according to IBM and the Ponemon Institute, is $4.45 million dollars. And while you may do all the right things to protect against a breach, including appointing a security champion, the risk remains. It is vital for nonprofits to take every possible step to prevent cyber security breaches, and having a champion on the team is a good step towards achieving this goal.

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.

Sep 17
0

Evaluating Changes in 2024 Compliance – Where Do You Stand?

By | Accounting, Audit, Nonprofit | No Comments
person moving blocks with people icons and justice scales

We are rapidly heading into the final calendar months of 2024. Many changes this year have impacted the nonprofit landscape. Audits, changing regulations, and the economic environment have each created its own set of challenges. The following 2024 accounting changes all merit evaluations at this point in the calendar year to see what, if any, changes our organizations should make for compliance and adherence to best practices, laws, and regulations.

The following highlights several areas of nonprofit accounting compliance that have changed this year. These changes impact auditing, leases, and much more. To stay abreast of nonprofit changes, check out our blogs and speak with the experts at Welter Consulting for specific audit preparation and support.

Lease Standard Implementation

Changes affecting lease standard implementation went into effect two years ago. Organizations should evaluate their previous estimates on leases to ensure the estimates are reasonable and supportable.

Organizations who have leases under common control should also take a second look at FASB Accounting Standards Update (ASU) No. 2023-01, Leases (Topic 842): Common Control Arrangements. Changes in the determination of whether related party arrangements fall under the scope of FASB Accounting Standards Codification (ASC) Topic 842 and how the amortization term for leasehold improvements is determined should be re-evaluated.

Current Expected Credit Loss

FASB ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments replaces the current method of recognizing expected credit loss (CECL) with the requirement to estimate losses expected over the contractual life of a financial asset. It went into effect for fiscal years starting December 15, 2022. Under this new model, moving forward, the expected losses must be based on one of three things: historical experience, current conditions, and reasonable/supportable forecasts.

Financial assets nonprofits should consider complying with this guideline include trade receivables, promissory notes receivable, loans receivable, grants receivable following the exchange transaction model and off-balance sheet credit exposures. There is flexibility in the estimation models if the approach is supported by evidence and is deemed reasonable.

New Statements on Auditing Standards

Starting on or after December 15, 2023, Statements on Accounting Standards (SAS) numbers 143-145 will be effective. These cover auditing standards for financial statements. Nonprofits can expect to see changes in audit procedures relating to how estimates found in financial statements are tested, for example, and audit procedures when specialists are used. 

Yellow Book 2024 – Changes to Auditing Procedures

The GAO issued Government Auditing Standards changes on February 1, 2024. These changes add application guidance to Chapter 6, Standards for Financial Audits, and seek to provide clarity as to when the concept of reporting key audit matters. These concepts might apply when organizations receive government financial assistance or to government entities.

Get Help Keeping Up with Changes

As you can see, there are many changes and updates to nonprofit accounting – and that’s just a few of them! To keep up with accounting changes, it’s helpful to have a partner with both an accounting and nonprofit background, like Welter Consulting, who can offer advice and guidance throughout the year.

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.

Sep 10
0

Using Decision Trees for Business Planning

By | Data, Nonprofit | No Comments
diagram example of a decision tree

Have you ever heard of or used a decision tree? Decision trees are excellent tools to help evaluate every potential outcome of a decision. Like a flowchart, they map if/then scenarios based on decision points. Each decision is evaluated for its possible outcomes, and then the outcomes are mapped. Chance events, resource costs, and their possible benefits are also included in a decision tree.

Because many important decisions are complex, involving myriad decision points, a tree model works better than a simple flowchart—each decision branching off the main choice looks more like a tree than a straight line.

They can be useful during times of great change or for business continuity planning. Let’s look at several ways in which decision trees can be helpful and discuss how to get started with this useful business tool. 

How CFOs Can Use Decision Trees

CFOs can significantly enhance their financial decision-making and strategic planning by leveraging decision tree models. One key application is in budgeting and forecasting. Decision trees allow CFOs to conduct scenario analyses by modeling various financial scenarios based on different assumptions, such as changes in revenue growth or cost fluctuations. This approach helps in understanding how different decisions impact the overall budget and aids in more accurate revenue forecasting by analyzing historical data and identifying key factors influencing sales.

Risk management is another critical area where decision trees prove useful. They enable CFOs to identify and quantify risks associated with different business strategies or investments by mapping out possible risk events and their impacts. Additionally, decision trees facilitate the development of contingency plans by outlining various risk scenarios and their potential consequences, helping organizations better prepare for adverse events.

Cost management also benefits from decision tree analysis. CFOs can utilize these models to perform cost-benefit analyses of various cost-saving initiatives, enabling informed decisions about which initiatives to pursue. Furthermore, decision trees assist in assessing operational efficiency by analyzing how different operational changes impact costs and overall efficiency.

In strategic planning, decision trees are instrumental in evaluating different strategic options or business models. By understanding the potential outcomes of each strategy, CFOs can make more informed long-term decisions. Additionally, when considering entering new markets or launching new products, decision trees help in evaluating potential outcomes and associated risks, guiding strategic choices.

To effectively use decision trees, CFOs should start by gathering historical financial data and other relevant information. They then construct the decision tree by defining decision points, possible outcomes, and probabilities. Analyzing the decision tree provides insights into various scenarios, helping CFOs interpret the results to determine the most viable options and manage risks effectively. 

How to Start a Decision Tree

Begin with the big question. Then, evaluate every potential outcome. Each possible outcome becomes a “branch” off the main tree until every eventuality is explored.

Decision trees can be mapped using whiteboards or paper during meetings. Often, brainstorming sessions can feel chaotic because no decision points are identified. People share answers without exploring the nuances of their responses. Using the decision tree model, the group can collectively brainstorm ideas, then follow each to its natural conclusion, asking important questions and mapping out possible scenarios, including major considerations for success.

It’s important when using decision trees during brainstorming meetings to keep the following in mind:

  • Keep an open mind. The answers the group develops may surprise you.
  • Draw from your past experience and listen to others whose experience differs from your own.
  • Don’t forget to consider what it may mean to do nothing. Choosing to do nothing is still a decision that should be mapped out. What will happen if all things stay the same?
  • Evaluate the results of past decisions and include this feedback too.

When faced with complex situations, mapping out all possible scenarios and getting them down on paper can be helpful. Decision trees offer a visual method of organizing thoughts around such decisions. Whether using them to offset damage from business outages or to plan for new and exciting changes, they can be a helpful tool to explore all the options. 

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.