What to Look for in Nonprofit Accounting Services
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Choosing the right accounting services is crucial for the financial health of your nonprofit. The right nonprofit accountant helps your organization properly manage its finances, which improves trust and transparency with stakeholders and donors.
Let’s explore the key factors to consider when researching nonprofit accounting services–from the firm’s expertise to its technology recommendations–so you can be sure you’re getting the nonprofit accounting your organization needs.
1. Nonprofit Accounting Expertise and Experience
Nonprofit accounting isn’t the same as for-profit business accounting. Your organization needs a nonprofit accountant who understands the differences and has experience in nonprofit accounting. Look for accounting firms that specialize in nonprofit accounting when researching accounting services.
Specialized nonprofit accountants know the ins and outs of nonprofit accounting, so they can easily jump into managing your organization’s finances. Unlike a generalized accountant, nonprofit accountants already understand the unique challenges and regulations nonprofit organizations face. This can be especially important when it comes to reporting and filing requirements.
2. Services Offered
When selecting nonprofit accounting services, looking for a firm that offers a comprehensive suite of services tailored to your needs is important. There’s a wide range of accounting services your organization might need, including:
- Bookkeeping
- Financial reporting
- Tax preparation
- Audit support
These key services are vital to maintaining the financial health of your organization. Proper tax preparation, for example, can help your nonprofit stay compliant with financial regulations and maintain tax-exempt status. Likewise, an accountant who offers financial reporting services can help you choose and prepare the right financial reports for your board of directors, donors, or the general public.
Additionally, most nonprofit accounting services include specialized services for nonprofits, such as:
- Grant management
- Providing recommendations for best practices as your organization scales
- Financial goal setting
Specialized accounting services like grant management help your organization efficiently manage funds to help meet donor expectations and plan for growth and sustainability.
3. Technology and Tools
The modern world is built on technology, and nonprofits are no different. Technology is one of the most important tools in modern nonprofit accounting. When researching nonprofit accounting services, aim to work with a firm that embraces and encourages technology like accounting software or donor management systems.
A good nonprofit accounting firm will work with you to find the right technology tools to help you simplify your bookkeeping. For example, they might recommend tools that make it easier for employees to track expenses using a mobile app. This eliminates the need to collect paper receipts from employees and streamlines your accounting systems.
You should also choose nonprofit accounting services that prioritize nonprofit data privacy. Data breaches can plummet public trust in your organization, so it’s important to use secure technology and software.
4. Customization and Scalability
You may not need the full range of your accountant’s nonprofit accounting services right now. But what happens as your organization grows? You’ll likely need expanded accounting services.
Your nonprofit accounting services should be customized to fit your current needs. However, you also want to work with an accountant who can scale your services to fit your future needs. Consider the future of your organization as you look for nonprofit accounting services.
5. Transparency and Communication
Accountants often work with sensitive financial data. It’s no surprise that should look for nonprofit accounting services from a trustworthy firm.
However, you also want to take the firm’s transparency and communication skills into consideration. Does the firm respond quickly to messages? Are they open and honest about the state of your organization’s financials? These factors can help you narrow down the right accounting services for your nonprofit.
6. Cost and Affordability
The final thing to look for in nonprofit accounting services is the price. Unfortunately, financial sustainability is one of the biggest challenges facing many nonprofits. You need to be sure you can afford the nonprofit accounting services your organization needs.
On the other hand, it usually doesn’t make sense to choose nonprofit accounting services based solely on cost. The key is to find accounting services that balance the cost with the quality of services provided.
Luckily, many nonprofit accounting services can be tailored to fit your needs–including your budget. As you look for accounting services, be sure to let potential accountants know your budget so they can build an accounting plan that meets your financial constraints.
Find the Right Nonprofit Accounting Services
Your nonprofit accountant is an important decision for your organization. Focus on these six factors when researching accounting services to ensure you find the right fit for your organization. The right accounting services will help your organization streamline financial processes, build trust with donors and stakeholders, and ultimately contribute to expanding your mission.
At The Charity CFO, we understand the unique financial and accounting needs of nonprofits. Our team specializes in nonprofit accounting and we take pride in being able to accurately and efficiently help nonprofits streamline their accounting processes. We’re here to help you better understand the financial health of your organization–and discover ways to improve.
Get in touch today for a free consultation on our nonprofit accounting services!
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