Benefits of Having Nonprofit Accounting Services

by | Mar 22, 2021

Is your nonprofit organization finding the mountain of accounting paperwork stifling? For a nonprofit organization, accounting can often take a lot of much-needed time away from achieving its mission. If this sounds like you, then you need to know how nonprofit accounting can transform your workflow.

Removing the burden of budgets and preparing reports can give your workforce newfound freedom. Read on for our guide on the benefits of nonprofit accounting services.

Nonprofit Accounting Services Can Monitor Financial Visibility

When managing the finances of a nonprofit, the deficit between transactions and the appearance of money in a ledger can be a long time. While a transaction may happen once or twice in a month, it may take a while for it to register on your books.

Nonprofit accounting services can ensure that transaction entry is entered promptly. Done in real-time, this makes the planning of a budget easier and more transparent.

Security

Security in your accounts, either from external or internal factors, is often overlooked. Malicious attacks and the theft of information are a real threat to any nonprofit, that needs to be taken seriously.

You should already have an IT department, who can monitor your network for suspicious activity. By having a designated accounting service, you also have someone who can make sure financial information is secure. The accountancy team can observe in macro to see if details change or things do not look right.

By having dedicated accounting services, you also limit the number of people on your staff who have access to finances. For most nonprofits, they have a choice to let almost everyone or hardly anyone view their finances. Accounting services can facilitate transparency while also monitoring access.

They Can Track Grants

If you are tracking grants, it can become confusing and messy, particularly if you have applied for multiple ones. They may all be at different stages or require different actions, such as submissions, at various times of the year. You also need to be in regular contact with the grantors, to see where you stand on getting the grant itself.

All of this can lead to financial instability as you wait to hear the news. If you have other jobs to work on, grant tracking can often become lost in the workload.

Specialist nonprofit accounting can track all grants for you. It will use either a designated tracking method for grants via software or have someone to deal with your cases. This will allow prompt communications, applications, and updates.

Up to Date Compliance

Accounting principles for all businesses are set by the Financial Accounting Standards Board. Very often, these can change quickly. If you happen to miss them and account incorrectly, then it can be costly.

Having a dedicated nonprofit accounting team will mean you do not have to check for these updates. As professionals, they will keep abreast of any changes put out by the FASB.

Digital Services

A dedicated team for your finances will have specialist accounting for nonprofit organization software. These will not only track and record finances but track applications and workflows. This can result in the creation of automated processes that make the whole system much easier to use for you and your team.

You will no longer have to rely on reams of paper and receipts. Records can be stored digitally and archived without the need for bulky physical records.

Quick Data Access

Financial updates need to happen on an almost daily basis. It is no longer enough to get a monthly financial report. In a nonprofit organization, where income is not a steady turnover, then a month can be a long time.

To run your organization you need access to accounts quickly. Nonprofit accounting can produce reports that include all the information you need. Budget, expenses, donor reporting, grant reporting, and cash balances can be produced almost instantaneously.

Once you have this, you can make better assessments and decisions on a daily basis. You will be able to make better management choices and inspire confidence in your donors.

Tax Reporting

Tax reporting for nonprofit accounting is complex. This is to ensure non-profits are not acting fraudulently, and that tax exemption applied to nonprofits is not used in an incorrect manner. This makes the whole process, especially for small businesses, hard to complete.

As your accounts will also be in the public domain, it is important that you get this whole process right. Doing it yourself can take a lot of time, and even then you may get it wrong. Nonprofit accounting services will be able to use their experience to get this done quickly and efficiently.

Financial Experience

Your organization may have someone trained in accounting or with some background in it. However, for most small nonprofits this is not the reality. This means inexperienced people are left finding their way with accountancy.

You may also have board members who are well-known professionals. Very often they will have hired accounts to do that aspect of the job for them. Having professional financial accounts can provide them with the level of accuracy they need to make the right decisions.

Getting the Right Service

Now you know the benefits of nonprofit accounting services, you need to locate the correct company. Do not opt for standard accounting services. Nonprofits have a unique specialism and set of rules that require expert assistance and knowledge.

Your first stop should be Charity CFO. We bridge the gap between the accounting you need and the accounting you can afford. Contact us here to discuss specialist accounting services for your nonprofit.

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