When it comes to most nonprofits, bookkeeping responsibilities can often fall to the wayside. Larger organizations can afford to put a full-time accountant on their payroll, but those organizations are the exception and not the rule. If your organization doesn’t have a full-time accountant, don’t worry. There are great nonprofit accounting services out there for you.
Accounting Services For Your Nonprofit
How often do you look at your nonprofit’s financials and check your organization’s financial health? You may use an accounting system to do this (hopefully something more robust than an Excel spreadsheet), and hopefully the answer to this question doesn’t leave an uneasy feeling at the bottom of your stomach.
Here are some questions you should have answers for:
- 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
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 your organization’s financial health
- Not being sure if your books are 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 you should outsource your nonprofit’s bookkeeping.
Before you freak out about the idea of paying someone to do your books, here are 9 solid reasons to consider outsourcing your bookkeeping and invest in your nonprofit’s financial health.
1. Nonprofit Accounting Services Increase Bookkeeping Accuracy
In the typical small nonprofit 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 get a full team of trained people who have experience. This ensures:
- You won’t miss important deadlines
- Mistakes will be far less likely
- Your designated funds are separated correctly in the books
- Your financials are intact, accounted for, balanced, and up to date
- Various other types of income are accounted for correctly
2. Years Of 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 with nonprofit accounting services, you have access to a higher level of expertise at a much more affordable price. These accountants can help answer complex questions as they arise and ensure you are following best practices.
3. Fraud Reduction
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 implementing strong internal controls, and because they’re impartial, they can help reduce these risks.
4. Nonprofit Accounting Services Save Time
You have a million things to do each day to keep your organization running, and it is a much more efficient use of your time to use your expertise in those areas. 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. Another time-saving benefit is you can hire a bookkeeper for an amount of time you determine. As mentioned in this article by entepreneur.com, many businesses may only see their bookkeeper once a year during tax season.
Most nonprofits have a treasurer or volunteer who helps with the books, but these people tend to come and go. Outsourcing with nonprofit accounting services means you won’t worry about scrambling to find help at the last minute. You won’t fall behind while you wait for a new bookkeeper, train incoming volunteers, or fix costly mistakes made by people still learning the ropes.
6. Improve Your Processes
A hidden benefit of outsourcing is it actually improves your current financial process. Outsourced accountants know 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
Having a professional manage your account means they’ll have up-to-date records and can provide insight into your financial position. Up-to-date financials let you anticipate cash flow, reduce costs, and better your organization’s financial position.
8. Better Understand Your Giving
Your outsourced bookkeeper can also help monitor giving for your organization. Correctly tracking income for each designated purpose lets you generate reports to see giving trends. It also lets you monitor donor retention, create donation statements, and welcome new supporters.
9. Become A Better Steward Of Resources
Accurate tracking of your funds gives your supporters assurance that you’re using their donations well and are 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 with nonprofit accounting services. 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. We also give feedback for you to make sound financial decisions.
*We aren’t saying you can’t do your accounting on your own. Nonprofits do it every day. And they do it using our fund accounting software. But if you aren’t confident, or just don’t have the time to keep up with the books, outsourcing your bookkeeping is the best option.