Nonprofit Accounting Services: 6 Reasons You Should Outsource Your Accounting Today
Do you want to spend more time developing your programs and interacting with donors and less time chasing down receipts or fussing over payroll reports?
Outsourcing your bookkeeping duties to a nonprofit accounting service can be a great solution to help lighten the load. An expert accounting team with experience in nonprofits can help free up your time and give you the accurate reports you need to face your board and donors with confidence.
Here are six ways nonprofit accounting services help your organization get closer to fulfilling its mission:
1. Audit-Ready Books When You Need Them
You need an effective bookkeeping system to help you maintain your nonprofit status, meet your donors’ requirements, and be prepared for audits. But it’s not easy to keep audit-ready books, especially with a part-time, volunteer, or under-staffed accounting department.
If your books are sloppy or you don’t have the proper internal controls in place, you can’t prove you’ve been using donor donations for their intended purposes — and that’s a BIG problem!
Outsourcing your nonprofit accounting services ensures that your accounts are in order and compliant with required standards at all times. So you don’t have to scramble or work late every time someone asks to see your books.
And with improved accountability, you’ll also build your donors’ trust by showing them you are handling their money responsibly.
2. Get the Time to Focus On Your Mission
As a nonprofit team member, your attention is pulled in a dozen different directions— like fundraising, team management, staffing programs, and more. With all these things to take care of, tracking
Nonprofit accounting services help you spend less time with your calculator and more time guiding your organization toward its goals.
donor contributions should be the least of your worries.
For example, if you’re trying to help with a crisis of homelessness in your city, you should be spending more time building relationships with people in your community than staring at spreadsheets.
Outsourcing your nonprofit’s bookkeeping and accounting can help you succeed by freeing up your time to do the work you really enjoy. You’ll also be able to guide your employees and volunteers more efficiently if you’re not bogged down with bookkeeping tasks like processing invoices, sorting receipts, or paying your vendors.
3. Save a Ton of Time and Energy
Nonprofit accounting can be complicated and time-consuming, especially if you don’t have any nonprofit financial training. And if you don’t find accounting inspiring, it can eat away at your passion and limit the energy you have to dedicate to the cause.
When you outsource your accounting to an experienced nonprofit accounting service, their employees take care of everything for you, which lightens your load. It also removes the stress of hiring, training, and managing your own staff to do the bookkeeping tasks.
Nonprofit accounting services also know the best time-saving software and shortcuts you can use to simplify your processes. And they can recommend modern accounting software that keeps all of your accounting information in one place. So when it comes time to prepare reports or file taxes, you get everything at your fingertips.
4. Know Which Money You Can Spend
You want to be able to put your donors’ contributions and grant funds straight to work to help your programs succeed.
But, for many nonprofit teams it can be difficult to figure out how much of your donations should go toward programs, versus fundraising efforts or operations. And it’s even hard to track which money you CAN spend because of program-restricted funds and grants.
This is where an accounting service that specializes in nonprofits is with its weight in gold. Most general CPA firms ack the industry-specific knowledge you need, so they don’t have established practices for tracking program-restricted or grant-restricted funds. By contrast, a nonprofit accounting service will have experience navigating the specific issues that organizations like yours face every day.
5. Get Reports You Can Trust (and Read!)
Never underestimate the value of accurate nonprofit financial reports in a consistent and recognizable format. It may sound basic, but…
Most small and mid-size nonprofits (and many big ones too) struggle with getting good financial reports in time to satisfy their board members, donors, and auditors. And, oftentimes, the reports they do get vary from month to month in terms of the layout, what info they contain, and how things are categorized.
A professional nonprofit accounting firm will standardize your reports and classify your income and expenses consistently. So you’ll get reports you can trust every month, and actually be able to read them.
That allows you to instill confidence in both your oversight team and your donors. And it helps you make smarter decisions, faster. So that you can move your mission forward!
5. Save a Bunch of Money
You may not believe it, but nonprofit accounting services can save your organization a lot of money.
Employees are expensive, and accounting salaries have risen by as much as 20-30% in just the last year. Plus, staff accountants can easily get stuck in old ways of doing things that waste your organization’s time and money.
Optimized processes and up-to-date technology can make bookkeeping and accounting services much more efficient than your in-house team!
At The Charity CFO, we’ve taken nonprofit accounting departments that were employing 2 full-time staff members and turned it into a 20-hour per week job. Just by leveraging efficient processes and software solutions.
And that’s not to mention the enormous hidden costs in things like dealing with employee turnover, inaccurate or sloppy accounting, payroll taxes, and more. In fact, if your already behind on your books, the cost of cleaning up your books for an audit ALONE might cost more than a full year of accounting services.
When you choose the right outsourced accounting service, you’ll be surprised with how much time and money you’ll save just by doing things right the first time.
Still not sure about working with a nonprofit accounting service?
If you’re a nonprofit that’s thinking about hiring an accounting service, you probably have one big question:
“But won’t it be harder working with an accountant that’s not in my office?”
Actually, we’ve found that most nonprofits find working with an outsourced accounting service easier than having an in-house team. How could that be? There are 3 big reasons:
- Expertise. It’s amazing how much easier things are when you’ve got an expert on your team! As a nonprofit accounting service, we’ve worked with hundreds of nonprofits just like you. That means we have solutions for the issues you face every day, from expense reporting to dealing with irritable board members. Honestly, it’s pretty tough to surprise us. But if you do, we’ve got an office full of nonprofit financial professionals who love a new challenge.
- Efficiency. The first thing we do with any client is simplify and optimize their accounting system. We’ll make sure you’re using the right tools, software, and procedures to make life easier for you. And for us too, quite frankly. We can’t afford to be inefficient, because our model is based on efficiency. So guarantee that we can help your team save time and energy within a few weeks.
- Communication – At The Charity CFO, all of our 100+ nonprofit clients are handled remotely. That means we’ve developed systems, procedures, and technology that allow us to serve them just like we were there in their office. Many of our clients can’t believe that it’s easier to get clear, quick, and accurate responses from us than it ever was working with in-house accountants, volunteer bookkeepers, or “take a week to call you back” CPA firms.
Don’t believe that’s possible? Here’s what a fellow skeptic had to say:
Ready to talk about nonprofit accounting services?
Why not start making your life easier today?
Reach out to us at the Charity CFO for a free consultation today.
We’ll let you know if you’re a good candidate for outsourced nonprofit accounting. And we’ll show you exactly how we’d modernize your systems, organize your complex accounting and simplify your life!
