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Team Welter

Apr 10
0

New Standards Mean Changes to Disclosures and Financial Statements

By | Abila, Accounting, Audit, CPA, FASB, Grant Management, MIP Fund Accounting, Nonprofit | No Comments

In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-14. This document, entitled, “Presentation of Financial Statements for Not-for-Profit Entities” changed how information is presented in financial statements. The goal was to make information clear and easily understandable for the average person reading a nonprofit’s financial statements.

Areas that the new standards address include:

* Net asset restrictions: The previous categorization of net asset classifications confused many people, especially the term “unrestricted.” The new net asset restrictions bring the categories down from three to two to provide clarity.

* Liquidity: It was difficult under the old standard for people to see liquidity and compare liquidity amounts among various nonprofits.

* Cash flow: Previously, indirect reporting was required, but reviewers found that indirect reporting methods confused many people.

* Expenses: Not all nonprofits reported expenses the same way.

The Changes: Nothing New to Track, Simpler Reporting

The changes required by FASB for nonprofit accounting do not ask for any new information to be recorded or tracked. Instead, it simplifies the method of reporting and recording, streamlining it so that it is more consistent among nonprofits. This enables donors, members, and the public an easier way to compare nonprofit organizations and understand their finances.

The biggest changes are the net asset classifications, disclosure, and expense designation

1. Net asset classification: As previously stated, net asset classifications are changing from three previous potential classifications to two. The two new categories are net assets with donor restrictions and net assets without donor restrictions. Details about the categories are disclosed in the footnotes. The footnotes are expected to provide detail on the funds themselves and how they are apportioned.

2. Liquidity disclosure: On the liquidity disclosure, the new rules require that qualitative details communicate how the nonprofit manages the liquid resources available to meet its cash flow needs within a one year period. Quantitative information must also be provided about the resources available within one year. Additional information is required on the nature and type of liquid assets and any external limitations placed on them by grantors, donors, local laws, etc. Board limits must also be specified.

3. Expenses: Expenses must now be disclosed by natural and functional categories. The methods used to allocate costs must also be described.

The changes recommended by FASB aren’t a surprise, but are long in coming. The continual push to improve communications around financials for nonprofit entities is a welcome one that adds a layer of transparency to the nonprofit world that donors have been seeking.

If you’d like assistance meeting the new FASB requirements, speak with Welter Consulting today. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Apr 03
0

The “Round Robin” Technique Breaks the Ice – Every Time

By | Abila, Accounting, CPA, MIP Fund Accounting, Nonprofit | No Comments

We’ve all been in that certain meeting…the one where deafening silence reigns.

“Any questions?” the chairperson asks brightly only to be met be deafening silence.

No matter how long you’ve been leading meetings, chairing committees, or heading up boards, there comes a time when even the most energetic and influential meeting leaders fails to elicit a response. It’s no reflection on your or on your leadership skills. It may simply be that the participants do not have anything to add or someone is too shy to speak up. Your job as the meeting leader is to break the ice and ensure that everyone who wishes to do so has the opportunity to speak.

Why Don’t People Speak Up?

You pride yourself on being an open, responsive, collaborative leader. Yet time after time, you put forward a motion, solicit feedback, and are meat with a deafening silence. You can practically hear crickets chirping two miles away in the silence of the meeting room.

People are often reluctant to speak up when faced with a controversial issue. Sometimes, people feel unprepared to add to the discussion. They may also defer to authority, feeling that if the meeting leaders suggest something it is the right course of action to take.

To help people feel more comfortable during meetings and speak up, you can:

* Circulate the meeting agenda ahead of time so that everyone can prepare their thoughts before an issue is on the table for discussion or vote;

* Delay your own response as the meeting leader until you hear from others at the table. This avoids the ‘nodding head’ syndrome or people agreeing with you just because you’re leading the meeting. Let others speak first and voice their thoughts.

* Ask people to form small groups of three and discuss the issue in small groups first.

* Suggest that participants write questions on slips of paper, which are then passed to someone designated to read them aloud for discussion.

Each of these methods offers a way to encourage and facilitate dialogue rather than to accept silence as the norm. If all else fails, and none of these suggestions work or feel right for your meeting, try the Round Robin technique.

The Round Robin Technique

This technique is simple, and guarantees that people participate. It is called the ‘round robin’ technique and like the name suggests, moves the conversation around the table to ensure that everyone has a voice in the discussion.

To utilize this technique, bring forward the salient points that are under discussion. Pose the question, but do not answer it yourself if you are leading the meeting. You will speak last to encourage others to share their thoughts.

Turn to the person to your left and ask them to share their thoughts. Then, when that person is finished speaking, ask the next person in turn at the table to go, and continue until everyone has had a chance to speak. When the group has had a chance to speak, the meeting leader can speak, going last.

If someone really doesn’t want to speak, they can say “Pass” and pass their turn. At the end, go back to anyone who has said “pass” and invite them once more to say a few words. They can either decline or speak. Some people may need a few minutes to gather their thoughts, and will have plenty to say when their turn comes around again.

Adding a Stopwatch and Timed Feedback

The Round Robin technique ensures that everyone can be heard and that everyone has a say on a controversial issue. If you can, bring a stopwatch into the meeting and offer each person exactly 30 seconds (or less) to speak. Give them a ‘warning sign’ of a wave or another signal to let them know their 30 seconds is up. Adding a stopwatch and timed feedback ensures fairness for all and is especially useful in meetings where one or two people tend to dominate the discussion. For more information about the Round Robin technique, visit our friends at Jacobson & Jarvis PLC.

It can be challenging to get people to speak up during a meeting. Techniques such as Round Robin and Round Robin with stopwatch are excellent ways to make sure that all voices are heard at your next board meeting.

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.

Mar 27
0

Prioritizing Accounting for Nonprofits

By | Accounting, MIP Fund Accounting, Nonprofit | No Comments

With new laws and regulations passing each day, establishing priorities in an ever-changing world of accounting for nonprofits can be difficult. Keeping track of these changes, implementing new ideas, and managing daily tasks can all seem overwhelming. Due to increasingly demanding workloads of nonprofit staff, it’s easy to feel frustrated if you do not establish your priorities.

Making mindful choices can help you feel more in control of your work. Setting daily, weekly, and monthly priorities for yourself and your team can make accounting for nonprofits much easier and less stressful.

Accounting for Nonprofits: Three Tips to Ease Your Stress

 

  1. Establish your purpose: What is your group’s purpose or mission? When you clearly identify your organization’s vision and mission, you will find it easier to prioritize the essentials. Once you know your mission, all other activities can be organized in order of priority to support your mission. If something doesn’t actively support the organization’s mission or vision, it can be placed lower on the task list.

 

  1. Diversify income streams: Avoid relying upon a sole source of funding. If anything happens to that source, you’ll end up scrambling to find new income, which adds to your stress level. Grants end; donors can take their money elsewhere .Diversification of your income stream is as important as diversifying your investments. Diversification spreads out the potential risk if one stream dries up.

 

  1. Measure results: Measure the results of your work. Use both quantifiable means and quantitative means, such as case studies and success stories. Run data reports from your accounting and fund systems so that you can monitor campaign successes and progress towards goals. Learn how to read and use data derived from your systems to better manage your accounting.

 

Ask Questions to Set Goals

 

There are many questions you can ask to help prioritize around your organization’s mission. Train your team to ask these questions before taking on another project.

  • Are we doing this because we’ve always done it? It’s easy to get into a rut and continue activities simply because it’s what you’ve always done. Examine the success of each endeavor and don’t be afraid to shift priorities if something no longer works.

 

  • Are we clinging to “pet” projects?Just because something is a favorite of the director or the board, doesn’t mean it’s a good idea. It may take time to guide them away from their ‘pet’ projects, but if the data shows they aren’t profitable or useful, nor do they support the mission of the organization, then it’s time to rethink them.

 

  • Does this serve allconstituents? Every activity undertaken by your nonprofit must serve its constituents and fulfill your charter. It’s easy to let good ideas pull you in different directions, but in the end, this does not serve your best interests, nor the interests of your constituents. Always ask who the activity will serve and choose those that serve your constituents the best.

 

Accounting for nonprofits doesn’t have to be stressful. With the right focus, you can create clarity of purpose and peace of mind.

Welter Consulting offers Abila MIP Fund Accounting software to help nonprofits manage their accounting needs. Abila MIP Fund Accounting enables you to report and track the most important information for your board, your supervisors, and others eager to see how your nonprofit’s resources are being used. It’s a great MIP fund accounting software for many nonprofits.

At Welter Consulting we are committed to finding you the most affordable technology, the most powerful solution, and providing expert support. We are dedicated to assist you in achieving your mission by leveraging technology and superior reporting. We are passionate professionals who choose to work in the nonprofit sector for the same reason you do – helping others. Click here to see a complete listing of upcoming training and webinars, including the Free NonProfit Enrichment Series.

Mar 20
0

Switching from On-Premise to Cloud Solutions: The Experts Weigh In

By | Abila, Accounting, Data, HR, MIP Fund Accounting, Nonprofit | No Comments

By now you’ve probably read quite a bit about the benefits of switching from on-premises to cloud-based solutions. Forrester research reports that 50% of companies plan to increase their cloud spending in the next 12 months. About 92% have prioritized cloud computing as a new initiative in the next 18 months. Cloud computing isn’t the concept of the future; the future is here, and most companies will run at least one or more cloud-based software programs within the next year

As you consider switching all your software to the cloud, you may have questions. What do you need to know to make the transition? What benefits will your organization obtain from the switch? Is the cloud a better solution?

Five Big Benefits of Cloud-Based Systems

Consider the following  five benefits of cloud-based systems and how they may impact your organization.

  1. Obtain a clear picture of financial information: Quickly view the entire financial picture for your nonprofit organization. Cash flow, membership dues, sales from products, event/conference income, and much more can be reviewed easily and quickly. Information from multiple departments feeds into one system to provide a comprehensive big-picture view of the financials for your organization.
  2. Decreased reliance on spreadsheets: Many nonprofits still use spreadsheet-based accounting. Spreadsheets offer a simple method for running basic accounting information but lack the sophistication of combining information into one easily accessible location. Spreadsheets tend to be finicky, with formulas and formatting that can be tricky to use. And one small data entry error on a spreadsheet can lead to multiple problems later. Cloud computing reduces these chances. Reports can be run directly from cloud-based systems without fussing about formatting.
  3. Enhanced visibility: Cloud-based systems enhance and increase visibility of data across all parts of the organization. Everyone shares their information in a cloud-based system, with access available to all departments and team members.
  4. One data source: On-premises software can lead to multiple versions of the same document. Chasing after the latest version and reconciling changes can take a great deal of time. Cloud systems always provide the latest reports and information.
  5. Integrate office processes: Cloud systems integrate front and back-office operations into one system. You’ll no longer need to maintain separate systems for both.

On-premises solutions have many drawbacks. Not only do they lack integration and visibility, but they need updates. Updates must be performed individually on each piece of equipment. Cloud solutions update automatically so that the latest version is always running.

The Main Difference Between On-Premise and Cloud Solutions: ROI

Lastly, the biggest difference between cloud-based and on-premise solutions is the ROI.  With cloud solutions, efficiency increases immediately after adopting the cloud. The system gains in value with a positive ROI as it saves time and money elsewhere in the organization.

Not so with on-premise systems. Such systems begin losing ROI from the moment they’re installed. With constant updates and upgrades, purchases of special hardware and equipment to run them, and salaries for people to maintain them, these systems increase in cost and decrease in ROI.

Clearly, the winner is the cloud. With so many organizations adopting cloud-based solutions and more nonprofit software offered via the cloud, it’s time to make the leap to the cloud.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you improve and grow your accounting practice. Please contact Welter Consulting at 206-605-3113 for more information.