Category

Nonprofit

Oct 07
0

The Right Nonprofit Accounting System for Your Evolving Organization

By | Accounting, Nonprofit | No Comments

Organizations grow and change over time just like people do. They start small and grow in new and interesting ways. As a nonprofit grows, its accounting needs change, too. Often, organizations begin with simple spreadsheets or out-of-the-box small business accounting software. There comes a time, however, when spreadsheets take more time than you have in your day to update, or when your software is sluggish, overburdened, or simply not flexible enough to meet your current requirements.

In this article, we’ll explore what to do next if you’re unhappy with your current system. We’ll discuss the steps to evaluate your needs and select a flexible nonprofit accounting system that supports your current growth and future needs.

person using a tablet for accounting

Symptoms of Accounting System Growth Pains

Doctors ask patients about the symptoms of their maladies. What are the symptoms of accounting system growth pains?

  • A system that makes it difficult to get the reports you need – you find yourself exporting data into spreadsheets, then manipulating spreadsheets to generate the charts, graphs, and reports you need.
  • After typing data into your accounting system, you need to key the exact same information into another system because the systems don’t ‘talk’ to each other.
  • Duplicate data is rampant because everyone must type information into multiple systems. Even something as simple as typing “Rd” instead of “Road” leads to duplicate information and problems.
  • Month-end closing takes hours, even days, when you feel like it should be much easier.
  • It’s almost impossible.


Sounds familiar? If any of this sounds like your situation, you may be experiencing accounting system growing pains. It’s like a pair of shoes that no longer fit – they pinch because your feet have grown. It’s time to get the right size.

Imagine the Possibilities with a New Nonprofit Accounting System

Now imagine the possibilities with a new nonprofit accounting system. Cloud systems provide a comprehensive solution that includes accounting, finance, operations, human resources, and other systems all in one interconnected platform. Information entered into one part of the system flows naturally into other parts, providing unmatched real-time visibility. Preparing for audits, sharing information, and even simple monthly reconciliations are all much easier with a modern cloud-based accounting platform.

Searching for a New Accounting System

How do you begin the search for a new nonprofit accounting system?

  • Select a team from within your organization to steer the search. The members don’t need to be IT experts. A cross-sample from across multiple departments is the best way to steer a software selection team.
  • Work with a consultant. A good consultant who understands the nonprofit world and its unique accounting and reporting needs will save you time and effort by steering you towards software that supports your organization’s growth.
  • Make a list of the current pain points with your existing system and the wish list of what you’d like to see in your new one.
  • Take your time. Your new nonprofit accounting system will be with your organization for many years to come. Take the time now to research, review, and select the best one to support your growth.

It can be challenging to know the next steps when your organization has outgrown spreadsheets and standard accounting programs. With the right partner by your side, you can step forward into the search for a new nonprofit accounting program with confidence.

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.

Oct 02
0

Delegating By the Numbers

By | Nonprofit | No Comments

It’s advice you see everywhere: delegate tasks so you can focus on the tasks that are the highest and best value for your organization. That all sounds well and good, but what precisely should you delegate, and why?

The Harvard Business Review recently published an article that caught my attention. In it, the author suggested delegation based on a time log. Let’s look at what this means to the average CFO and how to go about examining your time log to determine delegation.

manager speaking to seated employees

Hidden Time Drains on Your Day

The hypothesis behind the HBR article is simple. Many CFOs feel overwhelmed and overworked yet struggle to delegate tasks to others. Each task they face seems equally important and vital to their role in the organization.

Instead of focusing on the tasks themselves, the author of the article suggests keeping a simple time log for two weeks to see where you spend most of your time. Although this may seem tedious at first (after all, do you really have to count the five minutes you spent waiting for the copier to churn out documents for a meeting?), the exercise itself proves valuable, because it helps you examine exactly what you spend your time on each day.

You can use a spreadsheet, scratchpad, or time-tracking app. It’s helpful to break your time down into 15-minute blocks so you’re not micro-recording every second of the day.

As you record how you spend your time, you’ll see patterns emerge. These patterns are the signs pointing to areas of delegation as well as nonproductive uses of your time.

Find the Hidden Time Wasters

What drains your time may differ from someone else in the organization, but in general, certain patterns emerge. Here are common hidden time wasters in a CFO’s day:

  1. Meetings: If we had a dollar for every minute wasted in a meeting that could have been an email, we’d all be wealthy. Meetings are by far the biggest timewaster on many CFO’s time log. Not all meetings are wasteful, but many are. These are the meetings you’re invited to attend as a courtesy, for example, or those that do not require a CFO. Instead, you may be able to delegate some of these meetings to other accounting and finance team members, thus saving you considerable time.
  2. Finding information: Searching through your company’s digital filing system for reports, memos, or notes can be time-consuming. If the system isn’t organized properly, if files aren’t tagged with logical names, searching for information can eat up precious minutes in your day. A good solution is to work with your operations team to organize the digital files in your system. Once the files are organized, someone should take an hour each month to check the system to ensure that the agreed-upon naming conventions and filing system are followed. Not only will you have an easier time finding information, but if your company adopts an AI platform such as Microsoft Copilot, you’ll find it has an easier time finding information, too, once the files are logically tagged.
  3. Routine tasks: As you examine your time log, look for routine tasks that might easily be completed by someone else. These may include tasks related to specific projects that others are working on with you. Decide if you can ask someone else to tackle them.

Also Note Which Tasks You Can’t Delegate

Another way to view your time log is to group tasks into two simple categories: things you absolutely must do (because only you can do them) and things you could or should delegate. As a CFO, higher-level financial tasks, decisions, and strategies naturally belong to your role. But you may be able to delegate other items on your list. Consider the complete list of tasks, and mark those that only you can do, and those you could potentially delegate. Then, weigh the pros and cons of delegation. Base your delegation strategy on tasks that can be easily delegated, focusing on those that save you the most time.

Delegation Isn’t Always Easy – But It’s Worth It

Let’s face it: delegation isn’t always easy. But, in the end, it’s worth it if you can save time in your day. You’ll feel less stress and pressure and have more time for the tasks that only you can do. And there’s no better feeling in the world than recouping an hour in your week through delegation!

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.

Sep 30
0

Nonprofit Cloud ERPs (Enterprise Resource Planning Systems) Provide the Support Busy CFOs Need

By | Cloud, Nonprofit | No Comments

As the CFO of a nonprofit, you wear many hats. You’re juggling budgets, working with managers on programs and activities, and planning for the future. If your current accounting system isn’t supporting the myriad daily tasks you face, it could add to your task list rather than reduce it.

How do you know if your current technology has reached its limits? Let’s explore this further and discuss ways in which you can support enhanced efficiency through the adoption of new technology.

two people looking at open laptop computer

The Litmus Test: Has Your Tech Reached Its Limits?

First, let’s do a quick check-in: has your current accounting program reached its limits?

Give yourself 1 point for every “yes” answer:

  1. Do you find yourself relying on spreadsheets to fill gaps your accounting system can’t handle?

  2. Does it take more than a day to produce accurate financial reports for your board or funders?

  3. Do you struggle to track restricted vs. unrestricted funds easily?

  4. Is grant reporting a manual, time-consuming process?

  5. Do you need to re-enter the same data in multiple places or systems?

  6. Are you unable to access real-time financial data without IT support or manual exports?

  7. Does your system make it difficult to manage multi-entity or program-level reporting?

  8. Do you lack automated workflows for approvals, allocations, or recurring entries?

  9. Is your current software not integrated with fundraising, payroll, or donor management systems?

  10. Do you worry your accounting system won’t scale with your nonprofit’s growth over the next 3–5 years?

Tally up the points. If you scored a three or higher, it’s time to explore your options. Scored a seven or higher? It’s time to take action! Your accounting program is holding your nonprofit back. It’s time to make the switch.

Nonprofit Cloud Accounting Systems

If your organization uses spreadsheets for its accounting or if your current accounting software is holding you back, a cloud nonprofit accounting system may be a good option. Specialized nonprofit accounting software can integrate and automate key functions within an organization, including accounting, finance, and operations. It offers more automations than the typical accounting software and can provide fund-based accounting for nonprofits that must track grants and activities back to specific programs.

A cloud nonprofit accounting system helps nonprofits:

  • Monitor data in real-time: Many nonprofits experience significant fluctuations in cash flow throughout the year, depending on donor patterns, grant funds, special events, campaigns, and so on. It can be tough to track cash flow with spreadsheets or manual inputs into an accounting program. A cloud accounting system, on the other hand, enables real-time data visibility. This enables CFOs to monitor cash flow more easily and adjust course depending on the organization’s needs.
  • Automate common processes: Whether it’s sending invoices or payment reminders, accounting departments often perform many routine tasks manually. A cloud accounting system can help you automate payments, reminders, invoices, and more, streamlining tasks and reducing manual efforts.
  • Reporting efforts: Nonprofits face numerous reporting and compliance needs, ranging from industry requirements to fund reporting for grants. Generating reports, graphs, and charts from spreadsheets is both cumbersome and limited. A good cloud accounting platform for nonprofits handles reporting with ease, enabling you to generate various reports for individual needs. For example, you may need to generate one type of report for a board meeting and a different type of report for the year-end mailing to donors.

Cloud-based accounting systems give your nonprofit the same powerful platform used by major companies in other industries to manage their finances. If you’re feeling the constraints of spreadsheets or out-of-the-box accounting programs, explore nonprofit cloud accounting systems. The real-time visibility, enhanced automations, and improved reporting features may be just what your organization needs to support its growth.

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.

Sep 02
0

ACA Compliance for Nonprofits: New Penalties, New Priorities in 2026

By | Accounting, Government, Nonprofit, Tax | No Comments
clipboard with paper which says ACA affordable care act compliance for nonprofits 2026

The IRS recently released Rev. Proc. 2025-26, providing the indexing adjustments for the upcoming calendar year 2026. These indexing adjustments affect applicable large employers (ALEs) starting next year. ALEs are defined as entities having 50 or more employees. Such organizations must either offer minimum essential coverage that is affordable (i.e., provides minimum value to full-time employees and their dependents) or make an employer shared responsibility payment to the IRS, all part of the Affordable Care Act’s employer shared responsibility provisions.

Nonprofit status does not matter in the context of this law; it’s the number of full-time employees that counts. If your organization employs 50 or more full-time employees, it’s important to understand the indexing adjustments to ensure full compliance with the ACA and avoid potential penalties.

What Is an Employer Shared Responsibility Payment?

The Employer Shared Responsibility Payment is a financial penalty imposed by the IRS on ALEs who fail to meet specific health coverage obligations under the Affordable Care Act.

To avoid the ESRP, an ALE must offer its full-time employees and their dependents health insurance that:

  • Qualifies as minimum essential coverage
  • Is affordable based on IRS standards and
  • Provides minimum value, meaning it covers at least 60% of expected healthcare costs

If an ALE does not offer coverage to at least 95% of its full-time employees, or if the coverage offered is unaffordable or inadequate, and at least one employee receives a premium tax credit through the Health Insurance Marketplace, the employer may owe one of two types of ESRPs:

  • A penalty for not offering coverage to enough employees
  • A penalty for offering coverage that fails the affordability or value tests

These payments are calculated monthly and assessed annually, with amounts indexed for inflation. Importantly, ESRPs are non-deductible and apply regardless of an employer’s tax-exempt status.

IRS Implements Updated Penalty Amounts in 2026

Beginning in 2026, the IRS will implement updated penalty amounts under the Employer Shared Responsibility Provisions of the Affordable Care Act. Nonprofit organizations classified as Applicable Large Employers (ALEs) must be especially mindful of these changes. If an ALE does not offer minimum essential coverage to its full-time employees, it may face a penalty of $3,340 per employee annually. Alternatively, if coverage is offered but is deemed unaffordable or does not meet minimum value standards, the penalty rises to $5,010 for each affected employee. These penalties are indexed for inflation and apply to plan years starting after December 31, 2025.

ESRPs are non-deductible expenses, meaning nonprofits cannot offset them through tax savings. This can pose a significant financial strain, especially for organizations operating on tight budgets or relying heavily on grant funding and donations.

Avoid the Penalty and Stay in Compliance

To avoid the Employer Shared Responsibility Payment, companies must first determine whether they qualify as an Applicable Large Employer, which generally means having 50 or more full-time employees or full-time equivalents in the previous calendar year. If they meet this threshold, they are required to offer minimum essential health coverage to at least 95 percent of their full-time employees and their dependents. This coverage must be affordable according to IRS safe harbor standards. It must also provide minimum value, meaning it covers at least 60 percent of expected healthcare costs.

Employers should also accurately track employee hours to determine full-time status and use IRS-approved methods for measurement. In addition, they must report coverage information to both the IRS and employees using the appropriate forms, such as Form 1095-C and Form 1094-C. If contacted by the IRS regarding a potential penalty, employers have a 90-day window to respond and provide documentation. Monitoring and meeting these requirements can help your organization avoid steep penalties from the IRS.

Preparing Nonprofits for ACA Compliance: Why Early Action Matters

As the 2026 updates to the Employer Shared Responsibility Payment take effect, nonprofit organizations must recognize that compliance affects them too. These provisions apply equally to tax-exempt employers as well as for-profit companies. If you don’t follow the IRS rules, your organization will face a steep penalty.

By understanding the rules, evaluating coverage, and proactively preparing for the new thresholds, nonprofits can protect their budgets and continue focusing on their mission. Early planning and informed decision-making will ensure your organization remains compliant and avoids costly penalties in the years ahead.

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.