Category

Budget

Aug 18
0

Give Your Budget a Checkup with These Best Practices

By | Budget | No Comments

Budgets aren’t set in stone. Rather, they evolve over the fiscal year. They require periodic checkups and adjustments to make them work for, rather than against, an organization’s needs.

If it’s been a while since you’ve reviewed this fiscal year’s budget, take time now to go over the budget. Work with your accounting person or department to review projected expenses, income, and more, and give your budget a thorough checkup and tune-up with the following nonprofit budgeting best practices.

Nonprofit Accounting and Budgeting Best Practices

  1. Continuous monitoring: Budgets must be monitored continuously. This includes using both operational processes and the right software to provide up-to-date information. Continuous monitoring enables you to take action quickly should you need to adjust the budget based on actual and projected figures. It also lets you catch and correct mistakes quickly. Schedule time for budget reviews each month and add it to your calendar now.
  2. Assess and review: In addition to monitoring the budget to make sure there are no mistakes, assess and review the major line items periodically. You may need to shift funds from one budget to another or update lines based on cash flow. Special projects, especially those that take more than a year, may need to be treated separately in the budgeting system so that you can maintain, monitor, and review the project budget within a different timeframe than the organization’s general budget.
  3. Ask key questions: During the budget review, ask key questions. These questions may include:
    1. Did you gain or lose any important sources of funding?
    2. Do any granting institutions need updates on how their funds are being spent?
    3. Are there any new economic challenges on the horizon? If so, how can you adjust the budget to prepare for them?
    4. Is there any important or unexpected need that will require special funding?
    5. Are any lines running low? Expecting a surplus?
  4. Revise the budget according: Budgets are working documents, not final outputs. It’s fine to revise the budget and to make adjustments as needed to accommodate changing situations.
  5. Review bylaws and budgets: Bylaws may address budgetary issues. Review the organization’s charter and bylaws now to make sure that any changes you make to the budget follow the bylaws.

Communicate Budget Updates to Your Team

Lastly, budget checkups shouldn’t end with closing the computer or signing off on the updates. You must take the time to provide your staff with an update on the budget.

You may wonder why this is important considering that most people on your staff don’t have budgetary responsibilities. It’s simple: everyone needs to know where the organization’s finances stand. They may not need all of the details, but they need to know that there’s enough money to continue operations, address problems, and reinvest. If there’s a shortfall, they need to know that too, so they can take measures to conserve funds and cut expenses.

It may help to use data visualizations such as graphs and charts to explain the big picture to your staff. This is where cloud-based nonprofit accounting software comes in handy. Such programs offer the ability to run reports using up-to-the-minute data and provide easy-to-understand visuals to accompany your presentation.

Now’s the time to review, revise, and adjust the budget. Make an appointment with your accountant or CFO today to begin the process. And, be sure to schedule the next review now, too. Remember, budgeting is an ongoing process, not a final report.

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.

Jun 18
0

Feeling – and Dealing – with Being Overwhelmed

By | Abila, Accounting, Accounting Software, Budget, Cloud, Corporate Culture, Fiscal, MIP Fund Accounting, Nonprofit, Professional Development, Technology | No Comments

It’s not confined to tax season. A look at why you’re feeling overwhelmed, and how to deal with it.

In the book “Scrum: The Art of Doing Twice the Work in Half the Time”, authors Jeff and J.J. Sutherland have an interesting chart on page 91. In this chart, they cite statistics that indicate that as one’s attention is divided, productivity decreases. Working on two projects at once means a 20% loss in productivity due to switching gears; three projects at once, and you lose about 40% due to context switching.

Accountants and financial managers at nonprofits aren’t immune to this loss, due to context switching. In fact, we’re probably more vulnerable to it due to the focused nature of our work. Dealing with financial issues, accounting questions, and understanding complex financial information requires quiet, focused time. The barrage of instant messenger apps, phone calls, emails, texts and myriad information streams in today’s connected world increases the loss due to context switching. Multi-tasking for greater productivity is a myth.

If you’re feeling overwhelmed, you’re not alone. Nearly all professionals are feeling overwhelmed these days. It’s as if the crunch before tax season never ends. Researchers point to the common culprits – instant messengers, instant news, instant everything – as a big part of the problem. The human brain isn’t wired to deal with this level of intensity, and we haven’t had time to adapt to the rapid pace of change that technology has wrought in our personal and business lives.

Although we cannot fully shut the world out and switch off the phones, there are ways to improve productivity. These include avoiding context or task switching, single-tasking instead of multi-tasking, and establishing boundaries around office times.

Single-Tasking for Greater Productivity

Multi-tasking does not improve productivity. Instead, it diminishes productivity because the mind needs time to acclimate to the second task. As we focus on one task, our attention is fixed on that task; switching to a second task takes brain power to establish focus, change direction, and process new information.

Don’t buy into the myth of multi-tasking. Instead, turn off the music or the television while you work. Shut the door to your office. Switch off the instant messages and turn your cell phone to mute while you work on a project. Allow yourself the space to focus, rather than trying to cram as many tasks as you can into the same amount of time.

Set Office Rules

Another tip to improve productivity and avoid feeling overwhelmed is to set some basic ground rules around your time in the office. While many managers prefer an ‘open door’ policy and make themselves available to their staff at any time, you may need to establish some basic policies around availability.

Some managers have ‘office hours’ when they leave their door open as a clear signal to their teams that they can drop in and ask any questions they wish. Others block out time on their calendar for quiet, focused work. Either method works fine. The point is to ensure that you have adequate quiet time for focused work and additional time blocked out for your teams.

Switch Off the Mobile Phone

 Cellphones are a great convenience, but their buzzing, shrilling, vibrating presence has ruined many a meeting, family dinner, or quiet time. Shut off the mobile phone when you aren’t at work or when you need some space. Texts are rarely as urgent as we make them out to be, and your brain needs a break from the constant stream of messages and information it’s trying to process.

Give Yourself Permission to Rest

 Lastly, give yourself permission to rest on the weekends, vacations and holidays. When you’re behind schedule on projects, it is tempting to trying to bring work home or devote a few extra hours in the evening to finishing up a project. Occasionally burning the midnight oil doesn’t hurt  but making it a habit can cut into your overall productivity. Ensuring balance in all things takes time, practice and effort, but it helps your overall productivity.

Everyone feels overwhelmed at times by work. If it becomes chronic, however, it’s time to take steps to safeguard your time. Burnout happens in all professions, including accounting and finance, nonprofit and for-profit companies.

 

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.


 

Jun 11
0

Choosing the Right Payment Processing Service to Accept Online Donations

By | Budget, Cryptocurrency, Donations, Fiscal, Fundraising, Nonprofit | No Comments

Most nonprofits accept donations through their website. If you don’t, you are missing out on many potential donations. Donors motivated to respond to an online solicitation, email, or news articles about the cause your work supports may wish to donate immediately rather than write a paper check and drop it in the mail. Accepting online donations provides a simple, easy pathway for people to give when they are able and motivated to do so.

Yet with so many choices of online payment processors, credit card payment gateways, bank payment systems, third party payment processors, and now even cryptocurrencies, what’s a nonprofit to do?

We’ve tried to make it as easy as possible for you to understand the many possible methods of accepting payments and help you sort through both the pros and cons of each. When you’re ready to proceed, if you still have questions, please call Welter Consulting at 206-605-3113. We are happy to help.

How Online Payment Systems Work

Nearly everyone reading this has purchased something online, so you should be familiar with how online payments work from the consumer end. The consumer end is called the “front end” or the “interface.” The shopping cart system is fairly straightforward, with variations to allow for different goods or services purchased. An online clothing retailer may have a spot for discount or coupon codes; a nonprofit may have a spot to share a message if the donation is in honor of someone.

Behind the interface or shopping cart  is a complex network of information shared by multiple parties to complete a credit card transaction online.

Encryption

Encryption means coding the information sent over the internet so that it cannot be ready unless someone has the key to decode it. After clicking “pay” or “order”, your credit card information is encrypted for security purposes. It then goes to an aggregator or a bank processor.

Aggregators

 An aggregator is a company that processes payments. As the name implies, aggregators collect payments from multiple entities such as merchants, nonprofits, and others to accept credit card payments and bank transfers without the need to set up a special merchant account. The aggregator makes an agreement with the merchant bank and batches multiple companies under their account for processing. In return, they assume a greater risk since they are dealing with multiple entities and may charge more for their services.

Acquirer (Bank)

 Merchant accounts are created by a merchant bank (called an acquirer). The bank settles and deposits the funds from the transaction into your bank account. They are responsible for ensuring that payment is rendered to your account once the transaction is approved.

Cryptocurrency Wallets

 Yet a third payment method available to nonprofits today is cryptocurrency. Bitcoin, Ether, LiteCoin and many other alternative payment methods are all potential forms of donation. Accepting donations in such coins is a slightly different process than accepting direct payments.

Cryptocurrencies are sent via the blockchain. An exchange facilitates sending and receiving cryptocurrencies. Senders can transmit their currency to the receiver’s wallet, a unique address that can be shared on your site to accept payments.

To set up a wallet, you’ll need to create an account with an exchange and submit information to pass KYC (know your customer). Cryptocurrencies received through the exchange can be changed into dollars or other government-backed currencies and deposited into your bank account. The exchange subtracts a fee for the transfer, which varies according to the exchange.

Pros and Cons of Each Payment Method

There is no clear-cut, single answer about which payment method is best for a nonprofit. You’ll need to weigh each factor in your decision.

Aggregators

 Pros:

  • Easier and faster to set up an account since aggregators tend to accept all types of businesses including new nonprofits.
  • Aggregators tend to be on the alert for fraud even more readily than banks because they accept riskier clients.
  • Better for small nonprofits with lower volume of monthly transactions.

Cons:

  • Charge a higher fee than banks.
  • Less customer support and service.

Merchant Banks

Pros:

  • Better for established nonprofits.
  • Better if you have higher volume of monthly transactions.
  • Better customer service than aggregators.

Cons:

  • Higher fees.
  • Pickier about who they accept, so if your nonprofit is new, banks may turn you away.
  • Tends to be better for high or steady volume, so if you can’t predict donation volume yet, may be costly.

Cryptocurrency Exchanges

 Pros:

  • Adds a new donation method to your nonprofit.
  • High appeal to young donors – millennials, Generation Z, etc.
  • Extremely high level of security through the blockchain.
  • Transactions cannot be reversed by the donor.
  • Transparency on both ends – donor can see that you received the money through blockchain confirmation.

Cons:

  • Fees can be high on some exchanges.
  • Nonprofit must pass KYC.

Clearly, there’s no “one size fits all” when it comes to processing donations. Thankfully, there are plenty of choices, and you can use what suits your nonprofit the best. Sorting through your choices may be the most complex part of the process, but if you need help, please contact us.

 

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.

Jun 04
0

Fiscal Year-End for Nonprofits

By | Accounting, Accounting Software, Budget, CPA, Fiscal, MIP Fund Accounting, Nonprofit, Year-End | No Comments

For many nonprofit organizations June represents the last month of their nonprofits fiscal year, and the start of closing of the grants. As soon as fiscal and executive staff return to the office in July 2018, there will be plenty of work to do to close the books.

Oftentimes nonprofit organizations that operate around a program schedule find that closing their fiscal year at the end of June simply works better. For example, after colleges and other higher education organizations have celebrated graduations they enter a slower time making it an optimal season to close out their books.

Healthcare and human services receiving substantial funding from grants are preparing for end of July reporting requirements, making it an ideal time to get in line with parallel grant cycles. Others prefer to avoid the double whammy of having fiscal closing and tax season that start in January. Whatever their reason, July marks a new financial year of opportunity ahead.

What will your fiscal 2017 results look like, and how will you distribute them? If you close your books at the end of June your IRS tax Form 990 will be due on November 15. Audits will also start to get scheduled which include financial statement scrutiny, especially for organizations covered under OMB’s A-133 single audit act.

Some questions you and your team can be asking include:

  • Where will your organization be presenting your results?
  • Will you go beyond a normal board meeting update and provide results to your top funding stakeholders?
  • Do you also publish results to your website and/or an annual report?

Keep in mind the future funders of your organization likely expect more transparency than the ones to whom you’re delivering results today.  Getting audit ready for year-end is probably at the top of your to-do list and making sure you have all your tools in place is important.

Another way to effectively navigate this end of year season with success is to put a budget plan in place. This plan should be adaptable. If you have just started a new FY 2018 budget, think about your checkpoints and where you can adjust the plan. If you’re on the cusp of starting budget planning, though, please consider how you can build a better budget. We are offering a guide to building a nonprofit budget roadmap that can help you wherever you happen to be in your own organization’s journey.

 

Welter Consulting

Welter Consulting is a technology firm empowering nonprofit and government organizations with effective software, consulting & training that can help you with your accounting needs. We are committed to finding the most affordable technology, the most powerful solution, and providing expert support. By leveraging technology and superior reporting, our team helps to free more of your time to devote to the important work of your mission. We bridge people and technology together for effective solutions for nonprofit organizations. We are passionate professionals who choose to work in the nonprofit sector for the same reason you do – helping others. Please contact Welter Consulting online at 206-605-3113 for more information.