Feb 17
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Systems Review: Inventory Your Current Systems and Technology

By | Technology | No Comments
person using laptop

An important part of any digital transformation journey is a systems review. A systems review consists of inventorying current systems and technology to understand precisely what is available, the purpose of each software, and how it is used.

Let’s unpack a systems review in three steps:

  1. Identify current software systems used throughout the organization
  2. Define purpose of each system and the use of the software
  3. Understand the strategic plan around the software’s use and how the various software systems interface with one another

Step 1: Identify Current Software Systems

Before you can understand how the systems work or interact, you must identify each system used in the organization. These systems may include operations, accounting, communications, marketing, and so on. If you have an IT department, they can help you take a complete inventory of each system. It may be helpful to note whether the system is hosted on premises or cloud-based and when it was last updated.

Step 2: Define the Purpose and Use

This is a critical step. By defining the purpose and use of each software system noted in step 1, you’re thinking through the who, how, and why of software use. It is helpful to set up a spreadsheet with a column for each software that you’ve identified and then, defining the purpose and use of the software under it.

For example, you may have basic business accounting software that you use throughout your organization. List the name of the software, then include who uses it—accounting, finance, marketing, etc. Next, write down the various functions it provides such as accounts payable, accounts receivable, invoicing, check ledger, credit card reconciliation, bank reconciliation, and so on.

Step 3: Understand the Strategic Plan

In step three, you’ll add details to your software inventory about where the software fits into your organization’s overall plan. Accounting software supports all areas of the organization, providing the financial backbone from which all business can be transacted. But what about other software you use? Everything from the office productivity package that enables you to send emails and write proposals to the special software you graphics team uses to edit images should be used in some strategic way to fulfill your organization’s mission. Now is the time to document this information.

Fitting the Puzzle Pieces Together

After the inventory is complete, it’s time to fit the puzzle pieces together. Once you have everything down on paper, you may notice gaps among the software systems you are using. Perhaps you have many legacy systems that have aged and are no longer supported by the manufacturers, but you’re not sure what you need to replace them. Or, some of the software systems you’re using don’t interface with other systems, which causes bottlenecks, redundant data, and misinformation.

Note all of these on a “wish list.” Problems aren’t just roadblocks, but rather opportunities. As you complete your systems inventory, you’ll find some gaps that require special assistance to fill. That’s where working with Welter Consulting can help. Vicki Welter offers a free consultation that includes a systems review. You can schedule it by contacting her at vicki@welter-consulting.com

The right software can automate manual processes, improve efficiency, and help every department work better together. A systems review is an important step in an organization’s overall digital transformation.

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.

Feb 15
0

Getting Started with Digital Transformation

By | Technology | No Comments
person on tablet with overlay meant to show digital transformation

Digital transformation is the current industry-wide buzzword. But what does it mean? It means adopting and utilizing technology to improve an organization’s ability to support its goals and mission. Digital transformation impacts many areas of an organization beyond the obvious IT department. This technology can liberate the accounting department from time-consuming data entry. Instead, they can utilize their time to function as real accounting professionals, analyzing the data to shape and share their organization’s story.

Why Focus on Digital Transformation?

It is a common misconception to dismiss digital transformation as an unnecessary expense, just more software. Digital transformation moves beyond the mere utilization of software. It will usher in organization-wide change towards spending more time on data analysis and interpretation and less time on data gathering.

There are many reasons why finance leaders should be at the forefront of the move towards digital transformation. These include:

  • Finance leaders shape an organization’s overall story based on the data they interpret. Spending less time gathering and entering data and more time shaping the overall story equates to better support for the mission and vision of an organization.
  • Technology remains the best way to protect and secure data. It makes sense that the financial leaders in a company should not only be involved, but lead this effort.
  • Leaders define and drive change in an organization—financial leaders can define and drive digital transformation just as well, if not better in some cases, that the IT department leaders.

With the right technology support and the emphasis on how such technology transforms processes and outcomes in an organization, financial leaders will be in a better position to influence others.

Automation Is the Key to the Digital Transformation Journey

The right technology supports and facilitates digital transformation by automating mundane tasks. The best solutions make it so easy to automate routine tasks that organizations can immediately see the value. Automation frees time so that the finance team can strategize, forecast, plan and budget—all tasks critical to the success of an organization.

So, what can automation do for your finance team? Automation can:

  • Speed up monthly and year-end closing
  • Enhance and speed up the process of account reconciliation
  • Share information with people in other departments to help them make timely decisions
  • Reduce operating costs
  • Improve accuracy for transaction-based accounting processes
  • Disseminate critical information to managers and department leaders
  • Eliminate redundancy
  • Reduce manual data entry mistakes

What’s Stopping You from Accounting Automation?

As you review the list of benefits, embracing accounting automation may seem like an automatic yes. But organizations find there are several barriers that stop them from implementing accounting automation technologies.

Several reasons may be behind this reluctance to fully embrace automation.

  • A misunderstanding about the importance and need to prioritize technology and digital transformation
  • Not enough time to understand and embrace solutions—we can get so stuck in our daily activities that we lose sight of the big picture ideas that can shape and change our organizations
  • Feeling like it’s not the CFO’s job, i.e., that you might not know enough about technology to lead the digital transformation efforts
  • Resource limitations, including lack of budget and people to work on the project
  • Departmental silos—departments may not understand the positive impact that accounting automation can have on the entire organization
  • The sense that accounting is part of overhead, that it is not a department that can influence the overall course of a nonprofit’s mission or vision

One way to move beyond these perceived limitations is to assess how much time your department spends gathering information and entering it into the system versus actual analysis and interpretation. Sharing this figure as a percent or as hours with your leadership team or board, and then demonstrating the value that can be achieved by automation may convince them that supporting such an initiative is in the organization’s best interests.

Digital transformation goes well beyond the adoption of new software and systems. Yes, the right nonprofit accounting system is important. But, so is the mindset and the commitment of the team behind the transformative efforts. The CFO of the future is one who will lead their organization’s digital transformation.

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.

Jan 25
0

Do You Need a Coach or Consultant?

By | Professional Development | No Comments

Business coaching, personal coaching, or consulting—what is the difference among these professional services and what does your organization really need? Many nonprofit organizations do not have the budget to hire consultants or coaches, but if you are looking for one—either personally or professionally—it’s important to understand the difference in how each service works, and what the expectations should be for working with each.

Coaching and Consulting Defined

Coaching is a process in which a coach—business, personal, etc. —helps an individual set and reach their goals. The coach offers guidance and support along the way, often with weekly meetings or other check-in sessions to ensure the person being coached is on track to achieve their goals. The coach will help the individual develop self-awareness, identify areas for improvement, and create action plans. The focus is on the individual’s personal growth and development.

Consulting is a process in which an expert in a particular field offers advice and guidance to an individual or organization. The consultant’s goal is to provide insights, resources, and expertise to help the individual or organization reach their goals. The focus is on the organization’s operations, strategies, and processes, rather than the individual’s personal growth and development.

Difference in Approach and Expectations

Coaches and consultants also differ in their approach. Coaches typically work one to one with clients, serving as both cheerleader and guide to achieving personal goals. Consultants, on the other hand, work at an organizational level, approaching business problems from the viewpoint of an expert in a particular business discipline such as accounting, finance, marketing, or management.

Given these differing approaches, the expectations should also be different whether you are working with a coach or a consultant. A coach will help an individual move past personal roadblocks, whereas a consultant should help an organization rethink and revisit processes, procedures, systems, and approaches that are hindering them as a while from achieving their objectives.

Coaching Differs from Therapy

Given the highly personal work that coaches offer, why shouldn’t people consult a therapist instead of a coach to help them overcome personal problems? Coaches approach problem-solving differently than therapists. Therapists are attuned to underlying patterns of behavior and maladaptation that may lead to psychological problems. Coaches do not deal with psychological problems. Instead, they focus on helping people make better choices, enforce positive steps, and offer guidance to overcome problems.

Expert Consultants Save Your Organization Time and Money

An expert business consultant can save your organization a great deal of time and money. Given their expertise, they can help you steer your organization towards the right systems, processes, tools, and resources to improve efficiency and ability to deliver on your mission.

For example, your organization’s systems, including accounting systems, grant management, and donor management systems, can save countless hours of manual data entry into spreadsheets. They can improve your ability to track and manage funds. And they can provide better support for all aspects of your organization so that you can implement, manage, and monitor programs effectively.

The right business consultant knows their domain so well that they can help you avoid many of the pitfalls that similar organizations face. Welter Consulting offers a variety of consulting services including software solutions and technology, accounting, audit preparation, systems review, process improvement/documentation, internal controls, and many other accounting/business management services that save your organization time and money and allows you the flexible consulting you need.

Sign up for our Complimentary Systems Review and Start Your Year Off Right

It’s accrual world. Your accounting system should not be cruel. Take advantage of this opportunity to have a Systems Review and start the new year off right. 

Included in this complimentary service is a written review identifying your current systems and technology and a list of opportunities to improve these systems and help you get the most out of your accounting software.

If you are tired of manual and redundant processes, it’s time to SIGN UP for our Systems Review Now!

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.

Jan 18
0

Tips for 2023 Affordable Care Act Compliance

By | Accounting, Audit, Insurance | No Comments

One of the more controversial aspects of recent legislation was the increase of funding for the Internal Revenue Services’ enforcement team. Many expect that the IRS will turn their attention to previously neglected areas of enforcement, including the Affordable Care Act (ACA).

Affordable Care Act: Compliance Basics

If it’s been a while since you reviewed ACA compliance, here is a brief refresher. Large employers with 50 or more full-time employees are required to provide adequate and affordable medical coverage to their employees. If they fail to do so, the penalties include a fine of $229.17 a month or $2,750 for 2022, multiplied by the total number of full-time employees in excess of 30. The 49080H(b) penalty amount of $343.33 a month or $4,120 for 2022 is assessed on a per-employee basis for every full-time employee who receives a premium tax credit after not being offered adequate or affordable coverage.

Compliant Companies May Still Face Audits

Let’s assume that your company meets the ACA coverage requirements and fully complies with the Affordable Care Act. You may feel you’re in the clear. However, just because your company is complying does not mean it is exempt from an ACA assessment. Failing to complete forms 1094 and 1095-C can raise red flags especially if you report health insurance amounts on forms W2 filed with the IRS. This kind of discrepancy can lead to questions from the IRS and/or employees when trying to file their taxes which could lead to fines and assessments being charged to you for non-compliance. This failure can also flag other governmental agencies leading to other non-compliance fines and penalties.

Up until 2021, the IRS held a policy of “good faith,” meaning that if employers can demonstrate they were trying to comply with the requirements in good faith by showing their due diligence, they were given grace to rectify any incomplete or incorrect reports. That grace period, however, ended in 2022, and many are seeing an uptick in IRS inquiries over incomplete or incorrect ACA reporting.

Common ACA Reporting Mistakes

Employers make many ACA reporting mistakes, but these are the most common. Check to ensure you’re not making these common errors on forms 1094 and 1095-C which can lead to unnecessary penalties and requests from the IRS for further information.

  1. Over reporting employees: You only need to issue 1095-C to full-time employees. There’s no need to issue it to part-time employees.
  2. Not validating safe harbor codes: You must validate, or provide documentation, to claim safe harbor for affordability on 1095-C. Speak with your accounting expert or CPA to determine if your company does indeed meet the safe harbor requirement
  3. Avoid “free” reporting services: If your bookkeeping software comes with “free” ACA reporting features, use with caution, and have someone double check the results that understands ACA 1095/1094 filing requirements, even if it comes out of your payroll/accounting system.
  4. Not responding to marketplace notices: Responding to marketplace notices is the first opportunity to prevent mistaken penalties. When an employee is determined eligible for a premium tax credit to purchase coverage from the Marketplace, they typically receive a notice of eligibility determination. If the employee can prove to the Marketplace that affordable, adequate coverage wasn’t made available by the employer when in fact it was, the employer can and should appeal. Don’t ignore marketplace notices or employee concerns that come up while they try to file their taxes annually.
  5. Get a benefit plan review annually if you are offering health insurance and other benefits to your employees unless you are an expert in ACA compliance and filing requirements. Another option is to outsource ACA processing and associated compliance to a third-party provider like your health insurance plan providers. Paying for a benefit plan review or outsourcing this function to a third party that specializes in this area will be well worth the cost of these services. Increased priority has been given to ACA filing & compliance starting in 2022 from the IRS and is evident with the number of agents they have assigned to this area for 2022.

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.