Category

Accounting

May 12
0

What Are the Benefits of Moving to Cloud Computing?

By | Accounting, Cloud, cyber security, Nonprofit | No Comments

Cloud computing utilizes shared network hardware to mitigate against security risks and data loss. It lowers costs, improves access and speed, and is often considered the go-to option for many organizations. Let’s explore the reasons why moving to cloud computing can benefit your organization.

Improved Security

Cyber threats have increased exponentially in recent times. Only 26% of nonprofits actively monitor their network environments, a critical step to protect against threats. And more than 70% of nonprofits have not run any cyber threat assessments. Criminals know that nonprofits have neither the bandwidth nor the resources to defend against an attack, thus making them an even more appealing target.

Large cloud computing providers can afford to put into place rigid security protocols to protect donor and fundraising data. They can enact two-factor authentication, secure data transfers, and other steps to secure your data.

When selecting a cloud computing provider, look for one that has attained a Statement on Standards for Attestation Engagements (SSAE) certification, as designated by the American Institute of Certified Public Accountants (AICPA). Such cloud hosts have undergone a rigorous audit of their systems, including privacy controls, and are less vulnerable to attack.

Private cloud (instead of public cloud) servers may offer greater security. Public cloud has suffered in recent times from data breaches caused by misconfigured servers. If privacy is of deep concern to your organization, consider opting for private instead of public cloud services.

Uninterrupted Access

Many nonprofits faced the sudden shift to remote work when the pandemic arrived. Cloud computing facilitates remote work by providing uninterrupted access to data and servers 24/7. Anywhere you have an internet connection, authorized personnel can log into the system. This enables easier telecommuting and meaningful work while traveling.

Regular Backups

Regular backups safeguard data as well as systems. Increasing data limits does not affect cloud storage, as more storage space can be added easily and quickly. Redundant systems ensure that, no matter what happens or where it occurs, the systems continue to run smoothly.

Affordability

Cloud computing also offers nonprofits a more affordable entrée into enhanced computing power. Cloud systems hosted on shared or private cloud servers are maintained by the hosting company’s staff. IT staff can be deployed to solve onsite problems, provide daily IT services, and provide support for routine IT needs. There is no need for a nonprofit to invest in hardware, additional staff, or the space and equipment needed for staff.

Important Questions to Ask When Moving to the Cloud

If you’re convinced that moving to a cloud-hosted fund accounting program or another cloud-based software system is right for your nonprofit, there are several key questions to ask about the software under consideration.

  1. What is the process to migrate to the cloud? How challenging will it be? What is our organization’s participation in the process? Understand the time and money it will take to make the move to the cloud.
  2. How do the features of this system compare to what I have now? What is better, different, or will change? What remains the same?
  3. Who owns the data? Some contracts have the hosting company owning your data. Read the fine print.
  4. How difficult or easy is this software for our team to learn? When checking references with other software users, ask them this question to obtain direct feedback from other customers.
  5. Will there be any system downtime?
  6. What if we wish to stop using this system or move to a different one? What is the process?
  7. How frequently are backups made and how can we access them if necessary?

Cloud computing makes good sense for many nonprofits. It offers numerous advantages and few disadvantages. If you feel it is the next step for your organization, contact Welter Consulting for assistance.

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.

May 05
0

Top Issues for Nonprofits in 2022

By | Accounting, Audit, COVID-19, Nonprofit | No Comments

These issues are top of mind for most accounting professionals, but especially for those leading the accounting function at nonprofits. This year appears to bring with it the continuing challenges resulting from the global pandemic as well as updates from FASB accountants need to know.

COVID-19 Issues Impacting Nonprofits

The economic impact of the government’s actions during the global pandemic are still not entirely understood. In March 2020, the government passed the $2 trillion CARES Act, and a year later in March 2021, the $1.9 trillion American Rescue Plan Act. If you’ll recall from previous articles, the CARES Act provided funds for the Paycheck Protection Program which used the Small Business Administration’s lending program to provide forgivable loans of up to $10 million per borrower. Qualifying businesses could spend this money on mortgage payments, payroll, or other business debts to continue operations.

Additionally, the CARES Act benefitted nonprofits directly by raising the limits on charitable deductions for both those who itemize deductions and those who do not. The government also raised the cap on charitable contributions for corporations. These actions were intended to increase cash gifts to nonprofits, strained by sudden increased demand for their services during the pandemic.

The response to the COVID-19 pandemic remains fluid as the situation continues to change. Many nonprofit accountants, however, still have questions about how to account for CARES Act funds, Payroll Protect Action loans, and more.

We’ve put together a list of resources to help you navigate any remaining questions from the pandemic response as they impact your nonprofit accounting.

Remote Auditing

Many nonprofits may still choose remote audits. To facilitate remote audits, incorporate the following best practices into your organization.

  • Utilize all available technology to share files with your auditors. This may include secure portals for sharing documents or videoconference. If your accounting and finance system allows for guest logins, you may be able to set up a secure login for your auditors.
  • Schedule additional video conferences to confirm supporting documentation. You may also wish to schedule video conferences in advance so that check-in dates are on everyone’s calendars.
  • Provide multiple contact methods to keep communication lines open. A secure instant messenger platform may be set up for the audit.
  • Build additional time into the auditing schedule to anticipate and accommodate potential delays in communication. Remote workers may be logging into their email at various times, which can lead to longer response times.
  • Be vigilant about cybersecurity, especially when sharing financial data.

Other Nonprofit Accounting Concerns

Nonprofits may also have concerns about other aspects of COVID-related accounting.

Cash management issues are at the top of many nonprofit accountants’ minds. Continue to build up operating reserves. Seek cost containment strategies that make sense for your organization.

If internal controls were relaxed during the pandemic, reinstate them when workers return to the office, even if only a handful are back. It’s important to ensure security and good internal controls even during challenging times.

This is also a good time to develop policies around remote work if your organization doesn’t already have them. Many organizations are finding that remote work policies are helping them attract more and better qualified candidates for open positions. A telecommuting alternative is an attractive benefit for many job applicants.

Lastly, be sure to keep your board and other advisors updated on your organization’s financial challenges, opportunities, and threats. Good communication is always essential.

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.

Apr 14
0

Best Practices for Integrating Finance and Fund Development

By | Accounting, Fundraising, Nonprofit | No Comments
group of office workers at table with open laptop showing graphics. Welter logo

Finance and fundraising work towards the same shared goal—maximizing margin in support of an organization’s mission. However, finance is often a separate department, with fundraising housed in grant management, marketing, or donor relations.

Although both can work effectively as separate entities within the same organization, when the teams are aligned, great things can happen. Aligning around shared data resources is a natural way to bring both teams together. Here are several best practices you can implement in your organization to help finance and fundraising improve collaboration around data and information resources.

Best Practice 1: Evaluate Current Fund Development Policies

Finance often acts as the guardian of an organization’s policies, but this can conflict with fundraising when donors wish to give support that is outside the current guidelines. A good example is a fundraising effort that connects a donor who wishes to give a substantial gift to the organization, but the gift is outside the organization’s normal policies. If this happens repeatedly, it may be time for finance and fundraising to collaborate on a policy review.

Often, policies have been in place for years. As the organization changes and grows, its mission changes along with the organization, but policies put in place many years ago haven’t changed. Gift policies, for example, may not encompass new technology that didn’t exist when the policies were written. Finance should provide guidance and collaborate with the fund-raising team to adjust gift and donation policies so they remain in alignment with best practices in nonprofit accounting and governance but still meet existing needs and opportunities.

Best Practice 2: Ensure Finance and Fundraising Understand Data Governance

Who in your organization “owns” the current fund accounting system and its resulting database? Probably finance, and that’s how it should be. But the fundraising team provides data that feeds into the fund accounting database—notably, fundraising campaign pledges, donor information, and gifts and donations that must be accounted for and tracked against funds and programs.

To ensure this tracking is accurate, fundraising and finance must determine who owns what in the data management system. Collaborating on a shared data dictionary, tagging each fund or donation appropriately, and tracking revenue and expenses to the correct fund are important parts of nonprofit accounting and financial management.

Without clean, clear data management, any upcoming audit will be a nightmare of tangled data and unclear information. This can lead to many challenges, the least of which is giving your auditors headaches—and showing discrepancies in your accounting. No one on the team wants this, so be sure to agree on who owns what in the database, how information should be managed, and, in the event of questions, which group has the final say.

Best Practice 3: Improve Communications

Depending on the size of your organization and its company culture, finance and fundraising may or may not interact frequently. What’s your take on this situation? Do the two departments find ways to connect and communicate, or are they frequently at loggerheads with one another?

If you find the two groups are bickering, it’s time for a sit-down. Ask each group to bring their questions, concerns, and challenges to the table. Perhaps employees from each group can shadow the other for a day—a member of finance works in fundraising, and vice versa. This helps each team gain a better understanding of the unique needs, challenges, and benefits the other brings to their work. Often, infighting and silos arise because of miscommunication. Eliminating these miscommunications and encouraging teams to share information freely is a great step

Everyone at the organization wants one thing: to support the mission. To do so, good communication, a shared understanding of job functions, and collaboration on policies and data is essential. With a few simple steps, you can accomplish this in your 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 call us at 206-605-3113 for more information.

Mar 16
0

A New Approach to Accounting Collaboration

By | Accounting, Accounting Software, Nonprofit | No Comments

It seems like the world changed in the blink of an eye. Things we took for granted, like working on-site at a client’s office to conduct an audit, had to be changed. New ways of collaboration were discovered, tested, and refined. Today’s approach to accounting collaboration has changed dramatically.

If your firm still handles client relations as it did five or even three years ago, it’s time to get up to speed on new methods of accounting collaboration. Collaborating with clients and colleagues has moved to new methods, technologies, and resources, and each has its pros and cons. Together, however, they are forming a new way of working together that is meeting with approval from both accountants and their clients.

New Ways of Collecting and Sharing Information

In previous years, clients often dropped off USB memory sticks at their accountant’s office or envelopes full of documents.

Today, new ways of collecting and sharing information have made virtual collaboration easier. For example, many accounting firms are now using secure file transfer protocols to enable clients to upload data directly to their systems.

But what about large data files? Yet another change that’s occurred throughout the accounting world is the need to handle larger data files. Instead of a single general ledger file, organizations and companies may have large, complex data files requiring secure transfers.

This is the time when accounting firms should invest in new, secure technology to facilitate easier data uploads. Ensuring that your clients can collect and share information securely and quickly is essential to fostering good collaboration.

Audits Go Virtual

Another change happening in the accounting world is the shift to virtual audits. Instead of relying upon in-person audits, many accounting firms are now collaborating with their clients through virtual audits.

The success of a virtual audit depends on how easily and transparently information can be shared between accountants and clients. Ensuring that clients can share information securely is essential. Some cloud-based accounting and finance systems offer the ability to share information directly with third-party systems or users. Auditors can be added to a system or, depending on the technology, information may be obtained directly from the organization’s accounting program.

Reliance on Videoconferencing

Collaboration between accounting firms and clients has also changed in the area of meetings. Annual, quarterly, and monthly meetings have mostly shifted to videconferences. This shift makes meetings more convenient but can add complexity when juggling multiple calendars and schedules to find suitable meeting times. Technological hurdles, such as unstable internet signals, can also make videoconferences less effective than in-person meetings.

To make videoconferencing more collaborative, consider using two tools in one, such as a video conference tool with chat function integrated into the software. This enables users to ask spontaneous questions as they would during an in-person meeting without disrupting the flow of conversation.

Two other ways to make videoconferencing more collaborative is using a recording function, which keeps a record of the call that can be shared for future reference or with participants who were unable to attend in person. A transcript can be made from the recording too, either by working with a transcription service through popular tools such as Fiverr or utilizing transcription software such as Otter.ai.

No matter where you turn, the shift towards virtual work is in full swing. Some feel it is long overdue, while others believe that the spontaneity and comradery of working in person is lost. To enhance collaboration with their clients, accountants must use all the resources at their disposal.

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.