Bookkeeping is not a buzzword that many business owners are excited to talk about. Although crucial to the operation of your company, many owners have a basic understanding of accounting principles but no time to learn more while opening their business. This situation is compounded if the business is a nonprofit organization. Managing donations, ensuring that money is allocated correctly and managing the day-to-day operations can quickly lead to an untenable position for any owner. Like all businesses, nonprofits have a solution: outsourcing their accounting to an experienced accountant. Today, we will look at five key reasons why every nonprofit organization should consider outsourcing their books.
Accuracy
One of the main advantages that a non-profit organization gains from outsourcing is accuracy. First, you will know your financials are maintained by someone following generally accepted accounting principles (GAAP). Often, non-profits employ a part-time accountant or roll it into other responsibilities of a full-time employee. This could lead to situations where if you need to apply for a loan or are being audited, the financials will be in disarray. Outsourcing your books means far fewer mistakes in general.
Additionally, with a professional accountant, accuracy means you will not miss important deadlines, donations will be correctly categorized and up to date. Many non-profits have multiple projects or even offices, so keeping donations and designated funds organized can be a hassle. A trained, experienced accountant will make sure that when you access your financials, you have balanced and clear reports.
Advice & Experience
Another key advantage of outsourcing your accounting is the experience and advice you will obtain. By hiring an experienced accountant, you know your books are being handled by someone who has managed financials for similar companies. Choosing an accountant who specializes in nonprofits will also provide more specific financial information for your business. They can provide a non-biased opinion on critical financial issues. An experienced accountant will not just be able to organize your books but will be an objective partner in helping your nonprofit succeed.
Experienced accountants also bring with them tools such as accounting software that allows you to stay connected to your books 24/7. With a click of a button, you can access a variety of reports such as profit & loss, balance sheets, and outstanding invoices. An experienced accountant will be able to walk you through how to access these tools so that you are always aware of where your nonprofit is financially.
Time & Resources
Outsourcing your financials also saves nonprofits significant time and resources. As the head of your nonprofit, time spent working on the books is time that could be better spent growing your donor base and reaching more people. Your accountant will save you hours weekly. Meetings with your accountant will highlight key trends and issues that will allow you to make better decisions moving forward.
Your nonprofit will also save valuable resources when you outsource. Most nonprofits cannot afford to hire a full-time in-house accountant. Meanwhile, hiring someone part-time or having another employee juggle multiple roles wastes time and can lead to mistakes. By outsourcing, you are avoiding both issues while maintaining peace of mind that you are books are being handled correctly.
Consistency
Having a dedicated accountant working with your nonprofit means you will not have to worry if your employees come and go. Make sure your company has stability so you won’t have gaps in knowing where you are financially. If that person moves on from the company, you will now have to train someone from scratch who has no knowledge of the financials. An experienced accountant will not only be able to get up to speed quickly when they begin working with you, but can be a partnership that lasts for years, saving you training and hiring costs.
Fraud & Risk Prevention
Lastly, an experienced accountant can help prevent fraud and lower other financial risks from affecting your nonprofit. The news is filled with stories of misused funds from charities and other 501c3 groups. With a high degree of trust, many nonprofits are targets for scammers. Your accountant will not just track income and expenses and look out for irregularities, but they can also identify when donations have been misallocated. This ensures that rent or mortgage (as well as other expenses) are covered, as well funds set aside for growth. A professional accountant will also show that you are protecting your donors’ contributions and help protect staff from false allegations. This transparency can assist in acquiring more donations as well as business loans.
Choose An Experienced Accountant for Your Nonprofit
Whether you are a brand-new nonprofit organization wanting to start out on the right path financially, or a growing organization that wants to avoid bookkeeping pitfalls, there is a compelling reason for each of them to consider outsourcing their accounting to a trusted, experienced
accountant.
Want more information including packages and options for your church? LDG Accounting Services would be happy to discuss your options.
Contact us today.
