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Team Welter

Feb 15
0

Getting Started with Digital Transformation

By | Technology | No Comments
person on tablet with overlay meant to show digital transformation

Digital transformation is the current industry-wide buzzword. But what does it mean? It means adopting and utilizing technology to improve an organization’s ability to support its goals and mission. Digital transformation impacts many areas of an organization beyond the obvious IT department. This technology can liberate the accounting department from time-consuming data entry. Instead, they can utilize their time to function as real accounting professionals, analyzing the data to shape and share their organization’s story.

Why Focus on Digital Transformation?

It is a common misconception to dismiss digital transformation as an unnecessary expense, just more software. Digital transformation moves beyond the mere utilization of software. It will usher in organization-wide change towards spending more time on data analysis and interpretation and less time on data gathering.

There are many reasons why finance leaders should be at the forefront of the move towards digital transformation. These include:

  • Finance leaders shape an organization’s overall story based on the data they interpret. Spending less time gathering and entering data and more time shaping the overall story equates to better support for the mission and vision of an organization.
  • Technology remains the best way to protect and secure data. It makes sense that the financial leaders in a company should not only be involved, but lead this effort.
  • Leaders define and drive change in an organization—financial leaders can define and drive digital transformation just as well, if not better in some cases, that the IT department leaders.

With the right technology support and the emphasis on how such technology transforms processes and outcomes in an organization, financial leaders will be in a better position to influence others.

Automation Is the Key to the Digital Transformation Journey

The right technology supports and facilitates digital transformation by automating mundane tasks. The best solutions make it so easy to automate routine tasks that organizations can immediately see the value. Automation frees time so that the finance team can strategize, forecast, plan and budget—all tasks critical to the success of an organization.

So, what can automation do for your finance team? Automation can:

  • Speed up monthly and year-end closing
  • Enhance and speed up the process of account reconciliation
  • Share information with people in other departments to help them make timely decisions
  • Reduce operating costs
  • Improve accuracy for transaction-based accounting processes
  • Disseminate critical information to managers and department leaders
  • Eliminate redundancy
  • Reduce manual data entry mistakes

What’s Stopping You from Accounting Automation?

As you review the list of benefits, embracing accounting automation may seem like an automatic yes. But organizations find there are several barriers that stop them from implementing accounting automation technologies.

Several reasons may be behind this reluctance to fully embrace automation.

  • A misunderstanding about the importance and need to prioritize technology and digital transformation
  • Not enough time to understand and embrace solutions—we can get so stuck in our daily activities that we lose sight of the big picture ideas that can shape and change our organizations
  • Feeling like it’s not the CFO’s job, i.e., that you might not know enough about technology to lead the digital transformation efforts
  • Resource limitations, including lack of budget and people to work on the project
  • Departmental silos—departments may not understand the positive impact that accounting automation can have on the entire organization
  • The sense that accounting is part of overhead, that it is not a department that can influence the overall course of a nonprofit’s mission or vision

One way to move beyond these perceived limitations is to assess how much time your department spends gathering information and entering it into the system versus actual analysis and interpretation. Sharing this figure as a percent or as hours with your leadership team or board, and then demonstrating the value that can be achieved by automation may convince them that supporting such an initiative is in the organization’s best interests.

Digital transformation goes well beyond the adoption of new software and systems. Yes, the right nonprofit accounting system is important. But, so is the mindset and the commitment of the team behind the transformative efforts. The CFO of the future is one who will lead their organization’s digital transformation.

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.

Jan 25
0

Do You Need a Coach or Consultant?

By | Professional Development | No Comments

Business coaching, personal coaching, or consulting—what is the difference among these professional services and what does your organization really need? Many nonprofit organizations do not have the budget to hire consultants or coaches, but if you are looking for one—either personally or professionally—it’s important to understand the difference in how each service works, and what the expectations should be for working with each.

Coaching and Consulting Defined

Coaching is a process in which a coach—business, personal, etc. —helps an individual set and reach their goals. The coach offers guidance and support along the way, often with weekly meetings or other check-in sessions to ensure the person being coached is on track to achieve their goals. The coach will help the individual develop self-awareness, identify areas for improvement, and create action plans. The focus is on the individual’s personal growth and development.

Consulting is a process in which an expert in a particular field offers advice and guidance to an individual or organization. The consultant’s goal is to provide insights, resources, and expertise to help the individual or organization reach their goals. The focus is on the organization’s operations, strategies, and processes, rather than the individual’s personal growth and development.

Difference in Approach and Expectations

Coaches and consultants also differ in their approach. Coaches typically work one to one with clients, serving as both cheerleader and guide to achieving personal goals. Consultants, on the other hand, work at an organizational level, approaching business problems from the viewpoint of an expert in a particular business discipline such as accounting, finance, marketing, or management.

Given these differing approaches, the expectations should also be different whether you are working with a coach or a consultant. A coach will help an individual move past personal roadblocks, whereas a consultant should help an organization rethink and revisit processes, procedures, systems, and approaches that are hindering them as a while from achieving their objectives.

Coaching Differs from Therapy

Given the highly personal work that coaches offer, why shouldn’t people consult a therapist instead of a coach to help them overcome personal problems? Coaches approach problem-solving differently than therapists. Therapists are attuned to underlying patterns of behavior and maladaptation that may lead to psychological problems. Coaches do not deal with psychological problems. Instead, they focus on helping people make better choices, enforce positive steps, and offer guidance to overcome problems.

Expert Consultants Save Your Organization Time and Money

An expert business consultant can save your organization a great deal of time and money. Given their expertise, they can help you steer your organization towards the right systems, processes, tools, and resources to improve efficiency and ability to deliver on your mission.

For example, your organization’s systems, including accounting systems, grant management, and donor management systems, can save countless hours of manual data entry into spreadsheets. They can improve your ability to track and manage funds. And they can provide better support for all aspects of your organization so that you can implement, manage, and monitor programs effectively.

The right business consultant knows their domain so well that they can help you avoid many of the pitfalls that similar organizations face. Welter Consulting offers a variety of consulting services including software solutions and technology, accounting, audit preparation, systems review, process improvement/documentation, internal controls, and many other accounting/business management services that save your organization time and money and allows you the flexible consulting you need.

Sign up for our Complimentary Systems Review and Start Your Year Off Right

It’s accrual world. Your accounting system should not be cruel. Take advantage of this opportunity to have a Systems Review and start the new year off right. 

Included in this complimentary service is a written review identifying your current systems and technology and a list of opportunities to improve these systems and help you get the most out of your accounting software.

If you are tired of manual and redundant processes, it’s time to SIGN UP for our Systems Review 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.

Jan 18
0

Tips for 2023 Affordable Care Act Compliance

By | Accounting, Audit, Insurance | No Comments

One of the more controversial aspects of recent legislation was the increase of funding for the Internal Revenue Services’ enforcement team. Many expect that the IRS will turn their attention to previously neglected areas of enforcement, including the Affordable Care Act (ACA).

Affordable Care Act: Compliance Basics

If it’s been a while since you reviewed ACA compliance, here is a brief refresher. Large employers with 50 or more full-time employees are required to provide adequate and affordable medical coverage to their employees. If they fail to do so, the penalties include a fine of $229.17 a month or $2,750 for 2022, multiplied by the total number of full-time employees in excess of 30. The 49080H(b) penalty amount of $343.33 a month or $4,120 for 2022 is assessed on a per-employee basis for every full-time employee who receives a premium tax credit after not being offered adequate or affordable coverage.

Compliant Companies May Still Face Audits

Let’s assume that your company meets the ACA coverage requirements and fully complies with the Affordable Care Act. You may feel you’re in the clear. However, just because your company is complying does not mean it is exempt from an ACA assessment. Failing to complete forms 1094 and 1095-C can raise red flags especially if you report health insurance amounts on forms W2 filed with the IRS. This kind of discrepancy can lead to questions from the IRS and/or employees when trying to file their taxes which could lead to fines and assessments being charged to you for non-compliance. This failure can also flag other governmental agencies leading to other non-compliance fines and penalties.

Up until 2021, the IRS held a policy of “good faith,” meaning that if employers can demonstrate they were trying to comply with the requirements in good faith by showing their due diligence, they were given grace to rectify any incomplete or incorrect reports. That grace period, however, ended in 2022, and many are seeing an uptick in IRS inquiries over incomplete or incorrect ACA reporting.

Common ACA Reporting Mistakes

Employers make many ACA reporting mistakes, but these are the most common. Check to ensure you’re not making these common errors on forms 1094 and 1095-C which can lead to unnecessary penalties and requests from the IRS for further information.

  1. Over reporting employees: You only need to issue 1095-C to full-time employees. There’s no need to issue it to part-time employees.
  2. Not validating safe harbor codes: You must validate, or provide documentation, to claim safe harbor for affordability on 1095-C. Speak with your accounting expert or CPA to determine if your company does indeed meet the safe harbor requirement
  3. Avoid “free” reporting services: If your bookkeeping software comes with “free” ACA reporting features, use with caution, and have someone double check the results that understands ACA 1095/1094 filing requirements, even if it comes out of your payroll/accounting system.
  4. Not responding to marketplace notices: Responding to marketplace notices is the first opportunity to prevent mistaken penalties. When an employee is determined eligible for a premium tax credit to purchase coverage from the Marketplace, they typically receive a notice of eligibility determination. If the employee can prove to the Marketplace that affordable, adequate coverage wasn’t made available by the employer when in fact it was, the employer can and should appeal. Don’t ignore marketplace notices or employee concerns that come up while they try to file their taxes annually.
  5. Get a benefit plan review annually if you are offering health insurance and other benefits to your employees unless you are an expert in ACA compliance and filing requirements. Another option is to outsource ACA processing and associated compliance to a third-party provider like your health insurance plan providers. Paying for a benefit plan review or outsourcing this function to a third party that specializes in this area will be well worth the cost of these services. Increased priority has been given to ACA filing & compliance starting in 2022 from the IRS and is evident with the number of agents they have assigned to this area for 2022.

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.

Jan 13
0

How to Find and Clean Dirty Data

By | Data, Technology | No Comments
broom sweeping data

If dirty data sounds like something you want to get rid of, and fast, it is. What is dirty data? It is corrupted, incomplete, or inaccurate data that is clogging up your accounting system and making it difficult to produce accurate reports. Here, we share tips for finding and cleaning such data from your systems.

A Primer on Dirty Data

One question you may ask is, “How does dirty data get into our system in the first place?”

Several factors contribute to dirty data in a system. The first is obvious: human error. Individuals entering customer information may inadvertently create duplicates by misspelling a company or customer name or using an acronym instead of spelling out a word. Other factors that can cause poor data quality include lack of internal controls, merging systems together, and inadequate processes to manage data.

Steps to Identify and Correct Data Issues

CPAs and accountants who suspect that data quality issues are contributing to poor decision making should take steps to uncover and rectify dirty data. The following process can help identify problematic data.

  1. Understand and map the business process that creates the data: Data is captured as part of a business process or workflow. For example, an accounts payable process starts with the order of goods or services, receipt of an invoice from a vendor, and payment to the vendor. By mapping the process, you can then identify where data enters the system and points to review to ensure accuracy. For example, controls need to be in place to ensure that invoice amounts match the contract amounts, and that the final payment matches the approved invoice.
  2. Analyze data sources: How is data input into the system? Is it manually entered or automatically entered? Manual data entry creates more potential for mistakes, so these should be your first areas of inquiry.
  3. Identify acceptable data elements: Another important step is to identify what are considered the acceptable data elements or data fields. By making these consistent, you’ll ensure consistent data entry.
  4. Review existing data sets and tables: Although this step is time-consuming, it is important to manually open existing data sets and data tables and review them. You may wish to break this step into smaller parts or tackle it one hour per day for large datasets. This gives your mind a break between review sessions to ensure you see things with a fresh eye.
  5. Note what data is problematic or missing: After reviewing the data, take notes on which elements are missing or incomplete. These should be fixed as soon as possible.
  6. Document the database requirements: Create a data dictionary, which defines what information goes into each field. Document the requirements for data entry as well. This ensures consistency in future when others enter information into the system.
  7. Identify exceptions: As with every rule-based system, there will be exceptions to the rules. Identify these exceptions and document them as well to provide guidelines for what is an acceptable deviation from the norm.
  8. Clean the database: Fix any errors and remove duplicates after reviewing the entire database.

Hint: There are companies that can help you clean up big databases, especially those involving names and addresses. These companies can conduct what is called a “merge/purge/suppression” by comparing datasets and identifying for manual review any potential duplicates. Then duplicates can be merged, deleted (purged), or suppressed (hidden) depending on your needs. While this may not be an appropriate step for confidential financial information, for customer databases it can be an enormous time saver.

Garbage In, Garbage Out!

Failing to clean dirty data could result in poor decision-making (garbage in, garbage out) from reporting on bad data Taking the necessary steps now to have clean data in your system will be worth the short-term costs and resources required for this effort. Contact us for more information on this topic, help with your data clean-up project, best practices on data entry and shared data between multiple systems including automation, reporting and compliance.

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.