The 9 Best Reasons To Outsource Your Bookkeeping
Let’s be honest, in the average nonprofit or church, accounting often takes the back seat. Most don’t have a big paid staff with a trained accountant that can devote their day to bookkeeping. Which is unfortunate because the fact is, your bookkeeping is one of the most important parts of running an organization.
What stellar bookkeeping means for your organization
When was the last time you asked: “How is our organization doing with it’s financials?” After all, your accounting system is the financial backbone to your organization and if you’re adequately prepared to answer that question, it should tell you:
- How much money you have right now
- If you are spending more than you expected
- If you have enough to pay your bills
- What your plan is for the money you see in your bank account,
- If you’re in the red or in the black and so on and so forth.
To get these answers, you need both a strong fund accounting software and a bookkeeper you trust to make sure your data is correctly entered on a regular basis. Without these two things, you face some serious risks, like:
- Getting behind and missing important deadlines while having to guess on your organization’s financial health
- Not being sure if it’s getting done right and not being able to trust what your financial reports are telling you
- Realizing your bookkeeping hasn’t been done correctly, and your reports start working against you with unhelpful or misleading information
Nobody wants that.
So, if you are waving the white flag saying, “I give up, I just can’t keep up with my accounting!” then it may be a sign that your best bet is outsourcing your bookkeeping.
Before you freak out about the idea of paying for someone to do your books, here are nine solid reasons to consider outsourcing your bookkeeping and investing in your financial health.
1. More accurate bookkeeping
In the typical small nonprofit or church setting, the person doing the bookkeeping typically does not have a lot of training in accounting. Think about it though, when you’re dealing with finances, accuracy is crucial. By outsourcing your books, you are usually getting a full team of people that are trained and have experience. This ensures:
- You won’t miss important deadlines
- Mistakes will be far less likely
- Your designated funds will be separated correctly in the books
- Your financials will be all intact, accounted for, balanced, and up-to-date
- Various other types of income will be accounted for correctly
2. Skill and Experience
The beauty of hiring a professional to manage your accounting is just that! A professional will actually manage it. Hiring an accountant is usually cost-prohibitive, but when you outsource, you have access to a higher level of expertise at a much more affordable price. They can help answer complex questions as they arise and ensure you are following best practices.
3. Reduce the risk of fraud
According to a study by the Association of Certified Fraud Examiners (ACFE) published in 2016, over 30% of fraud cases occur in organizations with fewer than 100 employees and, on average, small organizations had 49.2% fewer controls in place to prevent fraud. An outsourced accountant has experience with implementing strong internal controls and because they’re impartial, they can help reduce these risks.
4. Save time
You have a million-and-one-things you have to do each day to keep your organization running, and your expertise in those areas is a much more efficient use of your time. Having an outsourced bookkeeper can free up this administrative task, so you can spend your energy focusing on achieving your mission and managing the day-to-day operations.
5. More consistent bookkeeping
Most nonprofits or churches have a treasurer or volunteer that helps with the books, but these people tend to come and go. With outsourced accounting, you don’t need to worry about scrambling to: find help at last minute, falling behind while you are waiting for a new bookkeeper, training incoming volunteers, or fixing costly mistakes made by people still learning the ropes every time there is a change.
6. Improve processes
A hidden benefit of outsourcing is that it actually improves your current financial process. Outsourced accountants have experience best practices that improve the efficiency and timeliness of data so it is a smooth process to make it simpler to import data and close the books.
7. Better insight into your financials
Having a professional manage your account will only benefit you because they will have the records up to date and can provide insight into your financial position. With a professional accountant on your team and up-to-date financials, you can anticipate cash flow, reduce costs and better position or organization’s financial position.
8. Better insight into giving
Not only are your income and expenses tracked, but your outsourced bookkeeper can also help you monitor giving for your organization. When you track correctly income for each designated purpose, you can generate reports to see giving trends, monitor donor retention, create contribution statements, and welcome new supporters.
9. You can be a better steward of your resources
Accurate tracking of your funds gives your supporters assurance that their donations are used well and serving their designated purpose. With great financial reporting, you can demonstrate how your organization is following through on your mission with fiscal responsibility. You can also have the reports you need to meet grant requirements and plan for future endeavors.
The moral of the story is, don’t be afraid to outsource your bookkeeping. Aplos has a Bookkeeping Services Department that can take care of the bookkeeping for you. We keep your books up-to-date and accurate in Aplos and give you the feedback you need to make sound financial decisions.
*Small caveat. We aren’t saying you CAN’T do your accounting on your own. Nonprofits do it everyday. And they do it using our fund accounting software. But, if you aren’t confident and just don’t have the time to keep up with the books, outsourcing your bookkeeping is the best option.