Tag Archive for: bookkeeping

Strategic Planning vs Scenario Planning

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Recognizing potential situations and environments your nonprofit may encounter in the future, and determining how your organization should react, are important towards its long-term success. To build a successful nonprofit, one must learn the importance of nonprofit strategic and scenario planning.

While these two terms sound similar, they are fundamentally different. Quickly, strategic planning typically focuses on identifying and/or describing likely futures, then developing a plan that allows an organization to succeed. Similarly, scenario planning process tends to explore the uncertainty involved in analyzing a long- term future.

But, you shouldn’t just rely on the short paragraph above as your information, or all that you need to know for your nonprofit.

You should rely (and listen) to the latest episode of A Modern Nonprofit Podcast if you want to learn everything you need to know about strategic and scenario planning.

LISTEN TO EMILIE AND TOSHA DISCUSS NONPROFIT STRATEGIC AND SCENARIO PLANNING ON A MODERN NONPROFIT PODCAST HERE! 

On this episode, Dr. Emilie Socash, CEO of Nonprofit Help Center, to talk with Tosha Anderson, founder and CEO of The Charity CFO, to review this important topic. Some questions covered during the episode include:

  • What’s the difference between scenario planning and strategic planning
  • What’s unique about the scenario planning process for nonprofits (vs. for-profits)?
  • What does the scenario planning process look like? Is there just one way to do it? Does it require a specific skill set?
  • Can you give an example of how a nonprofit has effectively used scenario planning?
  • And more!

Make sure to subscribe to A Modern Nonprofit Podcast and share our episode to your nonprofit, professional network to get the word out about the helpful tips and tricks shared during this nonprofit-oriented series!

Dr. Emilie Socash is the CEO of Nonprofit Help Center, and also joins Tosha Anderson on A Modern Nonprofit Podcast!

So, you’ve listened to A Modern Nonprofit Podcast. Now what?

Nonprofit organizations—and the people who lead them—bring unique value to our communities, particularly during times of challenging change. The Nonprofit Help Center delivers a leader-focused suite of services that are grounded in organizational and leadership psychology, delivering transformational and long-lasting change where it’s needed most. Is your organization looking to build itself into an organization that can truly succeed? Become a NHC member today, which includes full access to all live and pre recorded webinars, special member resources, and a discount on coaching!

Visit the Nonprofit Help Center Website to learn more. 

And if you want to build your organization, you need to focus on the work that matters. That means you shouldn’t have to spend your nights and weekends completing financial paperwork, performing bookkeeping tasks or learning nonprofit accounting jargon. You need to outsource your accounting, and ensure you have a team of certified public accountants who actually know nonprofits.

If this sounds like your nonprofit and your own needs, then you should consider us, The Charity CFO. Discover what bookkeeping and accounting services we can provide your organization, then schedule a free consultation with us to start your journey.

 

 

Benefits of Having Nonprofit Accounting Services

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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.

From a Nonprofit CEO: How to Understand Your Financials

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Nonprofit financial statements, reports and jargon are the key to ensuring your organization, or business, can operate at its full strength. Thus, it is important that you can understand financials- which involves reading, creating, editing and analyzing your financial reports.

Financial reports will shine light as to how much money your organization operates with, how much donations you received and how much your staff are making. Understanding these numbers is especially important when tax season rolls around!

To better help nonprofit leaders and CEOs understand their financials, Tosha Anderson of The Charity CFO invited Sara Lahman of Annie Malone Children and Family Services on A Modern Nonprofit Podcast.

Sara Lahman of Annie Malone is this week’s A Modern Nonprofit guest!

Previously an Assistant Vice President of Residential Treatment Services with Great Circle, Sara knows a lot about helping the community. And as the CEO of an organization with a very influential mission, she knows how important nonprofit finances are.

If you want to learn how to understand nonprofit finances to help your nonprofit thrive, then you need to subscribe and listen to the latest A Modern Nonprofit Podcast episode!

LISTEN TO SARA AND TOSHA DISCUSS FINANCIALS ON A MODERN NONPROFIT PODCAST HERE! 

Some of the topics the two discuss include:

  • Differences between being the head of a program vs. head of an entire organization
  • Tips and tricks to understand numbers
  •  The most important thing(s) a nonprofit leader should know about their financials
  • Strategies to improve financial knowledge for beginners
  • And more!

Don’t forget to subscribe to our podcast for future episodes, as there’s tons of more exciting content coming your way!

So, you’ve listened to the most recent episode of A Modern Nonprofit Podcast. Now what?

Everything that Annie Malone does is aimed at ‘Making Lives Better’ for the children and families they serve. As a premier organization that provides a diverse array of services advancing the quality of life for children, families, and communities, Sara Lehman and her team at Annie Malone play a vital role in their community. To learn more about Sara’s organization and to support their mission, make sure to visit their website here. 

For individuals who might have realized you’re in over your head with your nonprofit financials, then you are not alone. Have you considered outsourcing your bookkeeping and accounting? Check out the services and pricing that The Charity CFO has to offer, and get the help you need to ensure your financials are not only up-to-date, but efficient and modernized.

Fortunately, you’re not alone if you are struggling to understand nonprofit financials. That’s why Tosha and her team created A Modern Nonprofit Facebook group, which is filled with insightful comments, posts and discussions from industry leaders. The best part? It’s completely free to join this inclusive community! Learn more and join today using this Facebook link. 

How Nonprofit Accounting Services Can Help You Succeed

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Did you start your nonprofit because you love number-crunching?

Or was it because you have a passion for helping those in need and serving your community?

Most nonprofit directors wish they could focus on relationships, not finances. However, professional accounting help can seem intimidating at first. How do you know when it’s time to transition to professional accounting?

Are you wondering whether nonprofit accounting services are worth it? If so, this article is for you. Read on to learn how specialized accounting services can help your nonprofit succeed.

Lets You Focus on Your Nonprofit

If you founded or joined a growing nonprofit, there are likely many ways you want to give your time. You’re busy hosting galas, networking with your supporters, and doing charity work.

As your organization grows, its finances grow too. Success makes your nonprofit more complex. That means you’ll need to devote more time to financial administration.

Does the financial work take your attention away from your organization? If so, it may be time to seek professional accounting support.

After all, a professional accountant can look after the books. Only you can lead your nonprofit.

Choose the Services You Need

There are two main types of financial administration. Your organization will need both: bookkeeping and accounting.

As a nonprofit, you may be able to fill one of these roles with volunteers. You may find someone to donate their skill to cover a few of these tasks. Every nonprofit has unique resources, and unique needs as well.

That’s why nonprofit accounting services are flexible. They allow you to decide whether you need to outsource some or all of your financial management. This makes professional accounting more affordable as well.

Bookkeeping Services for Nonprofits

A bookkeeper manages the daily financial interactions of your organization, including:

  • Accepting and recording donations
  • Paying out bills
  • Managing banking deposits
  • Allocating and recording expenses
  • Executing payroll

Many nonprofits manage these tasks in-house. This works well if they don’t overwhelm your time. You may even divide these tasks among your employees for convenience.

However, as your organization grows, your daily financial tasks increase as well. You may find that they put increasing demands on you and your staff’s attention.

Don’t overlook the dangers of assigning bookkeeping to financially untrained staff. Innocent bookkeeping mistakes can reflect badly on your organization.

If your staff is spending its time on financial tasks instead of charitable work, it’s the right time to seek professional accounting services.

Accounting Services for Nonprofits

Accounting involves analyzing your organization’s financial health. It gives an in-depth look at your nonprofit’s transactions and financial history.

CPA services (chartered professional accountants) include:

  • Making sure your expenses and income stay in balance
  • Planning an annual budget
  • Analyzing expenditures
  • Preparing your year-end financial report
  • Evaluating your organization’s overall financial wellbeing

Some of these services can be conducted in-house if you have accounting-trained employees (or volunteers). However, they are time-consuming, especially for non-professionals.

A specialized accountant can administer your accounts faster and more accurately than non-professionals. You will need an independent accountant to perform your mandatory yearly audit (see more below).

Navigate Nonprofit-Specific Issues

Nonprofit organizations have different financial inner workings than businesses. They face unique financial challenges and unique financial requirements as well.

A nonprofit accounting service understands these differences. It can help your organization navigate the special financial requirements you will face.

Nonprofit Audits

Most United States nonprofits are required to have a yearly financial audit. This audit must be conducted by an independent party. Some states require proof of a financial audit before granting registered nonprofit status.

A transparent yearly audit assures donors that your nonprofit is financially responsible. It gives the stamp of integrity to a charity.

However, nonprofit finances are different than for-profit businesses. Their financial audits have to be conducted differently as well. That’s why it’s essential to choose a nonprofit auditor who can analyze your nonprofit finances.

Nonprofit Taxes and Tax Reports

Keeping track of revenue in a nonprofit is always a challenge. Nonprofit revenue streams can include:

  • Personal donations
  • Fundraising drives
  • Honoraria
  • Membership fees
  • Public grants
  • Private foundations
  • Monthly contributions

With such diverse income streams, nonprofits often struggle to account for their income.

Your organization needs to report your income accurately. Otherwise, you could incur penalizations.

You may also need professional help when it comes to registering for your 501(c)(3) tax-exempt status. Professional accounting services can help in both these areas.

Are Nonprofit Accounting Services Worth It?

Nonprofits often start very small. When is the right time to spend money on outsourcing your accounting tasks?

First, think about how much time your staff currently spends on accounting and bookkeeping.

Time is money, even in the nonprofit sphere. If your staff spends excessive time on finances, you are already spending money on accounting.

Second, think about the quality of your financial management. Do-it-yourself solutions may seem attractive in the short term. In the long term, however, inexpert bookkeeping can make your organization seem unprofessional.

Most importantly, consider the quality of your charity work. Is your staff so busy with administrative work that they don’t have time for your mission? When you spread yourself too thin to do your charity work, it’s time to get accounting support.

Accounting Services For Your Nonprofit

Your nonprofit may have started small. However, it may quickly outgrow your financial administration abilities. If your finances need more time than you can give to them, it’s time to get a professional solution.

Is your organization ready for nonprofit accounting services? Contact us today to schedule your free consultation.

Tim Hudson Named Partner of Expert Nonprofit Bookkeeping Firm

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Team work makes the dream work. And if your dream is to find an expert accountant to help you handle your nonprofit accounting and bookkeeping, then this exciting announcement is for you.

The Charity CFO, a boutique accounting firm that provides specialized nonprofit accounting and bookkeeping services, is pleased to announce the promotion of Tim Hudson to the position of Partner with the firm. 

Tim currently serves as the organization’s chief operating officer and focuses on the promotion of innovation and transparency in the process as well as presentation of financial matters to all stakeholders. Tim is especially active and provides oversight to the service delivery and accounting functions of The Charity CFO. 

Tim Hudson is now an active partner of The Charity CFO.

“We are delighted to have Tim become a Partner with the firm. Tim has shown himself to be an exceptional certified public accountant and The Charity CFO would not be where it is today without him. He will continue to play an important role in the overall growth of the company.” said Tosha Anderson, the firm’s Founder, Chief Executive Officer, and Managing Partner. 

Tim has been part of The Charity CFO since 2018. Prior to joining the firm, Tim served various roles at Boeing Company, Ernst & Young, and the Principal Financial Group. 

He also holds a Master of Accountancy and Bachelor of Science in Accounting with Summa Cum Laude honors, both from Truman State University. Tim lives in St. Louis, MO, with his wife, Sarah.

About The Charity CFO

The Charity CFO was founded in 2014 to offer accounting and thought leadership skills to nonprofit organizations. After realizing the need for specialized accounting services with limited financial resources and increasing pressure to keep costs low, The Charity CFO dedicated itself to working with nonprofits to educate stakeholders and implement best practices in operations as well as accounting. 

Working with small to mid-sized nonprofits, ranging from start-up organizations to organizations fundraising more than $6 million per year, The Charity CFO operates to support causes that improve our communities. Walking side by side with nonprofits across the United States, the organization’s focus remains largely the most underserved segments of this niche including social services, arts, and education-based missions.

To learn more about The Charity CFO, visit https://thecharitycfo.com. To request a free consultation with Tim Hudson or Tosha Anderson, complete this brief form. 

 

Preparing for a Not-for-Profit Audit: Episode 3 of A Modern Nonprofit Podcast

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Do I need to hire a CPA firm for my nonprofit? Why can’t my finance person just take care of and publish my not-for-profit finance statements? Preparing for a not-for-profit audit is not something you should fear.

Plus, these are complex questions that only an expert accountant for charities can answer.  There are a lot of standards to follow in finance! Unfortunately, these standards do not get any easier when you are asking if your nonprofit should seek an audit.

Preparing for a Not-For-Profit Audit

In fact, this is why Jeanne Dee, a partner at Anders CPAs + Advisors, was this week’s speaker on Episode 3 of A Modern Nonprofit Podcast. Tosha Anderson’s latest guest dove into the specifics of what a certified public accountant does. Additionally, Jeanne discusses the differences between a review versus an audit. LISTEN TO EP. 3: PREPARING FOR A NOT-FOR-PROFIT AUDIT WITH JEANNE DEE HERE. 

Sometimes, different states have different expectations when it comes to the audit of a nonprofit. Nonprofit finances has a lot of standards that you must know! Fortunately, Jeanne highlights the types of expenses, fundings, and risk assessment process for not-for-profits. Plus, Jeanne explains the difference between procedures and policies. This distinction is important for having a good business mindset. Also, good documenting, risk assessment, and succession plans are points that auditors will want to consider.

So, why do nonprofits need to have an audit? Sometimes, an audit is required. Other times, an audit can be a valuable tool to understand the qualitative aspects of an organization. An audit will help you dig deeper! You can become a stronger charity because of it. This consideration is discussed later in Episode 3. Further, the two leaders discuss common mistakes and nonprofit fundraising, too. It’s a great discussion you don’t want to miss!

Prepare for Your Charity’s Audit

Plus, there are many benefits to having an audit. So, if you are looking for a nonprofit certified public accountant, The Charity CFO’s team of expert accountants are ready to help you work through your books. Schedule a free strategy session with us today if your auditors have started asking for spreadsheets. Or, if you are ready to take control of your nonprofit bookkeeping, we are here to help.

Lastly, if you would like to learn more about internal and external accounts with respect to the different industries, check out Jeanne Dee’s information.

The conversation doesn’t end here. Join A Modern Nonprofit Facebook Group to learn from nonprofit leaders about best audit and accounting strategies.

 

 

The Insider’s Guide to Bookkeeping Services For Nonprofit Organizations

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Bookkeeping includes invoicing, employee payroll, financial reporting, and more. Is your nonprofit interested in using bookkeeping services? You’re in the right place.

Affordable bookkeeping services for nonprofits are crucial for ensuring financial stability and accuracy. Keep reading to learn exactly how nonprofits can benefit from outsourcing bookkeeping.

What Are Bookkeeping Services?

Bookkeeping and Accounting may be used interchangeably, but they’re very different. Bookkeeping is focused on cash flow for an institution while accounting is basically analyzing all of that data. This helps assess the overall financial health of the organization.

Nonprofit organizations have many financial needs like any business. They have to file complicated taxes, certify for tax-exemption status, and report out. They also have to track donations! This can be a lot for a small staff to handle.

Bookkeeping services are handled by a team of professionals who have experience in the field with nonprofits. Many of these experts have worked with religious organizations, foundations, and even museums. They use software and knowledge of financial trends to help your nonprofit succeed.

Why Should I Use Bookkeeping Services?

There are many reasons to outsource bookkeeping. In addition to being safer and more secure, it enables you to focus on your organization’s mission.

Get Auditing Assistance

Nonprofits typically undergo an annual audit, unlike many other industries. This is time-consuming for the bookkeepers and accountants at the institution.

Save time and money by using bookkeeping services. These services can ensure that your organization is reporting accurate information to the Internal Revenue Service. They can also ensure that your institution is in a state of financial health.

Auditing involves a complex analysis. It also involves finding records of all transactions and donations for an organization. Some nonprofits choose not to do this because of the workload. However, completing annual audits shows donors that your staff is committed to transparency. This can help secure future funds and help with grant applications.

Avoid Fraud

No one wants to talk about the possibility of fraud, but it can happen within the nonprofit world. Embezzlement is also a risk, especially with multiple employees in the finance department. If there aren’t checks and balances in place, tracing money can be difficult.

Luckily, outsourcing bookkeeping services can ensure integrity for your nonprofit. These highly-skilled bookkeepers know exactly what to look for to avoid fraud and can easily identify issues. That way, the issues are caught before they become harmful to the organization.

For example, bookkeepers can see double payments or cash from a new vendor. Maybe they see a sudden increase in payments. They can even comb through documents that appear to be backdated or have questionable signatures. These can be indicators that something fishy is going on at the organization.

Since they manage all documents, data, and cash flow, professional bookkeepers add a level of security to the institution. As a third-party entity, bookkeepers can help your organization stay safe. This ensures security for your nonprofit.

The typical organization loses 5% of it’s annual revenue to fraud. That can be a lot if your organization is a multi-national nonprofit. Avoid lost revenue by using an outsourced bookkeeper.

Get Tax Filing Assistance

For nonprofits to earn their 501(c)(3) status and tax exemption, they have to be transparent. This means complete accuracy with the IRS on all financial matters. This includes strategic and accurate bookkeeping to provide easy filing when it is needed.

Nonprofits can have many revenue streams, including tax-deductible donations, membership dues, and even ticket admissions. Getting everything organized for tax season can be really complicated.

Bookkeeping services are useful because they use software that organizes all records perfectly. These professionals can also help identify areas to lower expenses for your organization. That way, you can reap the most benefits of the money your organization receives.

Using a dedicated bookkeeper absolutely makes this a seamless experience. This reduces stress during tax time for the nonprofit staff. Instead, it gives you the time to work on your mission and serve the community.

Save Time and Money

Instead of spending time organizing receipts, invoices, and payroll, handoff those duties to an expert. Your staff can then spend more time executing your mission.

In 2013, nonprofits paid $634 billion in wages. Hiring and training new employees, even if they’re very talented bookkeepers and accountants, can take a lot of time and energy. Instead, spend that manpower and resources on finding an outsourced financial services business.

Once your outsourced bookkeeper is set up, it requires very little management on the nonprofit’s side.

Bookkeeping Software Is More Accurate

Your organization might not have the funds to have a full-time bookkeeper and bookkeeping software. Luckily, an outsourced bookkeeping service has those resources for you to benefit from.

Bookkeeping software makes everything much more accurate. There is so much room for error when a team handles financials by hand or in a simple Excel sheet.

Avoid that hassle by investing in affordable financial services.

Ready to Outsource Bookkeeping Services?

Now that you know the many benefits of using an outside service, request a meeting with us to get started.

Pretty soon, your nonprofit’s bookkeeping services will be a breeze.

Our dedicated and experienced team works with an array of nonprofits. Many of our clients have been able to expand their impact on the community due to our financial help.

Check out our blog for more information on how our nonprofit financial services could work for your organization.