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Team Welter

Jan 09
0

Four Characteristics of a Successful Finance Leader

By | Accounting, Professional Development | No Comments
people standing and cheering behind another person in an office

What type of leader are you? Do you thrive on interactions with others, exchanging ideas, brainstorming, and working in groups? Or perhaps you are more on the visionary side, sharing stories, examples, and ideas to motivate and inspire your team.

These are just two examples of characteristics or traits of successful finance leaders. Not every leader possesses all these traits; most have a dominant working style, and perhaps a secondary style. No one style is better or worse than another, either. Some leadership styles fit in better with a particular organization’s culture than other styles, but that doesn’t necessarily make them better (or worse).

Each person’s personality is shaped by both innate characteristics and their life histories and experiences. We bring these attributes to our roles as finance leaders and managers. See which one of these four characteristics best describes your leadership style and learn how you can leverage your strengths for the betterment of the entire organization.

Leadership Style 1: The Connected Influencer

This is the leader who uses their connections within the organization—with the CEO, the CMO, and other leaders—to influence and shape the trajectory of their organization. They thrive on teamwork, but more so on using their position to create positive, lasting changes.

Leadership Style 2: The Authentic Disruptor

This is the leader who isn’t satisfied with the status quo. They are constantly asking, “Why?” Why do we do things this way and not another? These questions lead to lasting, positive changes in the organization. They are often viewed by the CEO as innovative and future-focused, someone who can be trusted to lead and manage change.

Leadership Style 3: The Curious Storyteller

The curious storyteller is a leader who connects the dots among various points of information in an organization to grasp and shape the big-picture store. This is the leader who sees the forest for the trees and who rarely gets lost in the details. Instead, they can juggle multiple points of view and sources of information to deeply understand whatever problems need to be solved.

Leadership Style 4: The Value Creator

The Value Creator takes a logical, rational approach to leadership. This is the leader who prefers facts and figures, and who can understand the big-picture consequences of the data presented in a report. The Value Creator focuses on KPIs, metrics, and measurements, and can quantify the value they bring to organization whether they’re addressing the board of directors or a group of employees.

Maximize Your Leadership Style

As you can see, each leadership style is unique. Leveraging the unique strengths of each role is one way to make the most of your personal leadership style.

The Connected Influencer, for example, thrives on making and maintaining connections. This leader benefits from participating in peer groups, attending conferences, and networking to make new connections. By making new connections, such a leader can bring fresh ideas into an organization and develop a support network whenever they need it.

For moribund or staid organizations, the Disruptor may be the one to bring the fresh winds of change into the building. A nonprofit with a venerable history, but set in its ways, may find itself shaken to the core by a disruptor’s leadership style, but in the end, it’s like spring cleaning—unpleasant while it’s underway but the outcome is welcome. Disruptors may wish to look for positions that enable them to ask the right questions to make changes. Organizations that are happy with the status quo probably aren’t for you; ones that are willing to ask and answer important questions will love your leadership traits.

The Curious Storyteller can also be a change agent, but they can also support organizations in crisis by helping them see beyond the immediate situation and into the future. Their unique gift of connecting the dots for people and weaving it into a compelling story can give hope to an organization that is struggling or motivate teams to move beyond the present and into the exciting future.

Lastly, the Value Creator often works best when paired with a visionary CEO or others in the leadership team who need grounding. Because you bring value through careful, clear, and logical analysis, you can offset the more “big picture” thinking of the Visionary. Finding a Visionary you work well with is the key to using your strengths to your advantage.

Are There More Than Four Leadership Styles?

People are like diamonds—they have many facets. Yes, there are more than four leadership styles, and they can be characterized quite differently depending on where they originate.

If you’re curious about leadership styles, it’s a fun area of personal growth to explore. Each management school groups leadership traits differently, and the intersection of personal characteristics (such as those analyzed by a Myers-Briggs, Enneagram or DISC assessment) along with management style theories can help you understand the nature of your personality and how your strengths and weaknesses can be used to benefit your organization and those around you.

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.

Jan 06
0

Improve Cyber Security for Remote Employees

By | cyber security | No Comments
remote employee working on home computer

Many organizations that eschewed remote work embraced it during the pandemic. Now, despite the abatement of the virus in many areas, organizations realize that adding a remote or hybrid work option to their policies is to their benefit. Not only can they attract more qualified applicants, but they can retain employees who might otherwise leave them without the availability of remote work.

Given that remote work is here to stay, it is important to look more at the cons as well as the pros. We know that remote work is attractive to employees. But on the flip side, as more people log in virtually, remote work is attracting cyber criminals, too. Criminals are finding remote workers an easier target. It’s vital to take steps to safeguard your organization against cybercriminals who can exploit remote workers and tap into sensitive data.

Scammers on the Rise

Scammers have always plagued organizations with all sorts of ploys, but the pandemic seems to have increased their number. Here are some of the newer scams hitting corporations and organizations nationwide. Many of the victims are remote workers.

The gift card scam: In this scam, someone pretending to be an employee, manager, or even the president of an organization messages an actual employee and asks them to purchase a gift card or debit card. The story is typically that the manager/president is in a meeting and wants to surprise someone with a gift card, but they can’t leave the meeting to purchase it. They ask the employee to purchase the gift card online and send them the information via a text or email. The scammers, of course, make off with the information needed to redeem the gift card, leaving the employee with the bill.

The” I lost my password” scam: Criminals know that executive assistants are often entrusted with sensitive information by senior-level executives. Many executive assistants know their supervisor’s birthdate, social security number, or computer password, for example. In this scam, someone purporting to be the manager contacts the assistant and pretends they’ve lost their password. If the assistant is working remotely, they may not be able to ask the account holder if indeed they are looking for their password. Unwary assistants have divulged passwords to criminals who can then enter sensitive systems and make off with data they can resell.

Phishing scams: Phishing scams are still active, and some have gotten more sophisticated. Many arrive in workers’ inboxes and look like documents sent by HR departments. Often, the email includes a link to click to update personal information such as a W9. The link directs the person to a site that captures the personal data and can lead to identity theft.

Other Security Steps to Take

In addition to the proliferation of scams, few organizations have improved their cyber security to protect systems during remote work access. Steps your team can take to secure access to critical information include:

  • Teaching remote workers basic home cyber security, such as protecting their SSID (home network) name and password, not accessing public Wi-Fi to link to organization systems, and not sharing a computer with open access with other family members.
  • Asking workers to either use company-issued hardware, such as computer purchased laptops, for work related matters, or locking user accounts on shared equipment with other family members by using a password.
  • Updating software, including operating system (Windows 11/MacOS) and commonly used applications.
  • Avoiding free software and non-company approved downloads of apps or software to organization-owned hardware. Some downloads contain viruses, while others just contain bloatware (excess computer code that slows machines down).

Communication Can Stave Off Many Cyber Attacks

One of the best ways to avoid compromising sensitive data is to ensure that remote workers feel connected to their teammates and free to ask questions at any time. Set up instant messenger platforms such as Slack, WhatsApp, or others to enable coworkers to reach out quickly to colleagues. One quick note (“Hey, are you at a client’s office, and are you really asking me to buy you a gift card?”) can save a lot of headaches later.

Remote workers may be more vulnerable to scams than those working in-person simply because they don’t have easy access to supervisors to check on the story given to them by the scammers. By improving awareness and communication, you can do a lot to prevent cybercrimes at your nonprofit organization.

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.

Nov 22
0

Understanding the Discount Rate: FASB Lease Accounting Standard

By | FASB, Nonprofit | No Comments
people looking at a laptop on a desk which has a graph

In November 2021, the FASB board rejected an extension request for the effective date of the new lease accounting standards. That means that the time is now imminent for nonprofits to adopt these requirements.

Your organization’s discount rate is an important item to both understand and determine as you begin the implementation of Accounting Standards Update No. 2016-02 (Topic 842). The discount rate impacts both lease classification and liability.

Importance of the Discount Rate

To determine lease liability, the discount rate is applied to all future lease payments. This is needed to calculate the present value of lease payments. Because a right-of-use asset is based on lease liability, the discount rate will impact the initial value of a right of use asset.

Determining Lease Classification

There are two lease classifications:

  • Finance lease
  • Operating lease

To determine the classification of a lease, consider whether the present value of lease payments is equal to or almost all of the fair value of the asset.

Now you can see how the discount rate can impact the income statement and the balance sheet. It depends on how you determined the lease classification.

Determining Discount Rate

For lessees, the discount rate is the rate stated in the lease. If the rate cannot be readily determined, you can use either the incremental borrowing rate or the risk-free rate.

What if a lease needs to be remeasured? Then a new discount rate is established at remeasurement.

You Can Elect the Risk-Free Rate

To make things easier, entities that are not public may make an accounting policy election to adopt a risk-free discount rate as their discount rate instead of the incremental borrowing rate. This rate should be applied using a term comparable to the lease term based on the earliest date the lease is presented in the financial statements.

However, if the rate is readily determinable from the lease agreement, that rate should be used instead of the risk-free rate. The risk-free rate can only be used when the rate implicit in the lease is not readily determinable. You can find risk-free rates on the Treasury website.

The bottom line: the rate to be used must be the one that best reflects the accuracy of the transaction and be easily determined. Nonprofits should create various financial what-if scenarios to see how each discount rate affects their income statement and balance sheet. Then choose the one that makes the most sense from both an accuracy and transparency situation as well as what makes the most sense for their financial needs.

Welter Consulting can assist you with this determination and other questions—contact us for an appointment.

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.

Nov 15
0

Improving Communications with Data and Trend Analysis

By | Accounting, Data, Donations, Nonprofit | No Comments
people looking at papers on a desk with graph overlay

Charts, graphs, and financial reports may seem like they don’t say much to those outside of the accounting and finance department. But with the right data and trend analysis, the information contained in these reports can inform and improve constituent communications.

The Tip of the Iceberg

It’s an old cliché, but a good one—the tip of the iceberg. If you imagine an iceberg, you can only see the tip of it. The majority of the iceberg is underwater but it’s probably the more important part.

The same goes for your organization. The data that you can easily find is the “tip of the iceberg” and readily available. And it’s usually what your team uses to base their decisions.

However, what’s going on underneath the surface is often the more valuable information. Getting to it is the challenging part.

How Nonprofits Can Leverage Data

Many organizations only dig at the surface level into their data. They run basic financial reports to gauge how fiscally solvent an organization is, or which programs require more funding and leave it at that. But the data that can be used to assess funding can also be used to dig deeper into issues such as program demand, program use, and more.

Each nonprofit is unique and tracks different data. But, in general, nonprofits can mine their data to find information to help them improve programs, improve donor communications, and ensure transparency.

Look beyond your existing technology for additional data. Although your current accounting system may provide plenty of data, other data exists. If your nonprofit sells items, look at warehouse and inventory reports. If programs provide participation and survey data, add that to the data repository for examination. Consider many sources to leverage all of your data and build a stronger, better organization.

Improve Programs

Nonprofits that track program participation can look more closely at program data to update their offerings. Programs that receive higher participation, for example, should be examined to determine if they can be spun into additional opportunities. For example, an animal shelter offering a spay/neuter clinic may find that a free rabies vaccination clinic is also in high demand and brings people into the shelter to view (and potentially adopt) homeless pets. An education nonprofit that finds its free mathematics tutoring program for elementary school children in high demand may wish to expand into the high schools and so on.

Better Donor Communications

The same data that reports on your program activities can also be leveraged to improve donor communications. Program participation and success data can be parlayed into donation campaigns demonstrating the efficacy of your offerings. People like to give to successful initiatives as it makes them feel that their donation is worthwhile, so demonstrating how successful the programs are can go a long way towards encouraging additional donations.

Enhanced Visibility

Successful nonprofits know that increasing visibility into their activities and finances is an excellent way to court donors and participants. The more transparency and visibility into their actions, the greater the trust they engender with the public, which in turns leads to better utilization of their programs and increased donations. Sharing the data from your systems and using it to for storytelling purposes can take your nonprofit to new levels.

Increasing Nonprofit Success in a Tough Economic Climate

Inflation and global unrest have created a climate of uncertainty, and this in turn means fewer people donating to nonprofits … or does it? It doesn’t have to lead to a downturn in donations. Instead, leveraging stories and data, improving program offerings based on data, and ensuring transparency and communications can build up programs and services during times when other nonprofits may be struggling. For those nonprofits that can dig deeply into their data, they may find information that can lead them to greater improvements across 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 us for more information.