Why hire an accountant who specializes in nonprofit accounting? Why not keep managing the books on your own or hire your third cousin, who was once a small business bookkeeper, to manage your accounts?
If you’re looking to cut corners and save budget—don’t do it when hiring an accountant, especially a nonprofit accountant. Choosing the right nonprofit accountant is one of the most important decisions when managing your organization. Here’s why you need a great nonprofit accountant and where to start your search.
Why Look for an Accountant with Nonprofit Experience?
Nonprofit accounting is different from for-profit accounting. Okay, this may be an obvious statement, but it’s often surprising that some organizations fail to recognize this critical fact. Nonprofits must comply with extensive regulations and requirements to maintain their tax-exempt status. Failing to do so can be catastrophic to an organization.
Many corporate or small business accountants do not have the experience or knowledge of nonprofit accounting to manage some of the issues facing nonprofit compliance. An experienced nonprofit accountant knows what to look for and where to go for more information and can confidently steer your organization’s finances.
The Right Nonprofit Accountant Helps Improve Efficiency
If you’re the CEO or president of your organization, and you’re the one still managing the accounting function, think of the time you could save if you had an experienced, trustworthy, and knowledgeable accountant handling it instead.
How many hours do you spend daily, weekly, or monthly completing routine accounting tasks? What about advanced accounting and financial needs such as forecasting, budgeting, analysis, and planning?
A nonprofit account will bring with them many years of experience. They will know the steps to take and the systems to put into place to streamline your organization’s accounting processes.
Another area in which a nonprofit accountant plays a pivotal role is selecting software to improve efficiency. This may mean accounting software, but it could also be in choosing the best grant and donor management software, data and analytics processing software, or other types of software that can improve sales, marketing, and operations efficiency.
Having a true accounting leader on your team will free up considerable time, ensuring that the financial items are handled appropriately, quickly, and confidently. It will greatly improve efficiency both for you and your entire team.
Improved Protection Against Fraud
It’s a sad fact that fraud continues to plague the nonprofit realm. According to the Association of Certified Fraud Examiners (ACFE) 2020 Global Study on Occupational Fraud and Abuse, 35% of nonprofits lack internal controls. Internal controls are systems and processes that prevent common types of fraud, such as stealing cash, padding expenses, etc.
In over 17% of the cases cited in the study, audits or internal management spotted the fraud. In many cases, nonprofit management received a tip that fraud was occurring.
With the right nonprofit accountant on board, not only can you put strong internal controls into place to guard against fraud, but you’ll also have a leader available who others can trust with information about possible fraudulent activity. Thieves often act impulsively, taking advantage of opportunities (such as an unlocked petty cash box). Having someone experienced in nonprofit accounting leading the efforts against fraud and theft within the organization can make a significant impact.
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.