Top 11 Reasons for Nonprofits to Outsource their Accounting by Rocky Davidson, CPA
Each nonprofit is different. But for the most part, these reasons to outsource apply to every nonprofit seeking to better fulfill their mission. Here are the Top 11 Reasons for Nonprofits to Outsource their Accounting:
- Accounting should be a consistent process – bills need to be paid on time, expenditures need to be coded correctly, so that monthly, quarterly, and annual reporting is accurate and timely.
- You need qualified talent – Nonprofit accounting is often more complex than commercial business. Understanding compliance and proper reporting to funders is crucial. If your organization needs qualified finance and accounting talent and expertise – but just not on a full-time basis – outsourcing is the perfect solution.
- Accurate reporting – Nothing is worse than walking into a meeting uncertain as to whether your reporting is accurate. Have all expenses been correctly coded so that managers have an accurate view of programs and available funding? Are you receiving full monthly report packets including your Statement of Financial Position, Functional Expense Reporting, and more? When you outsource your accounting with Qbix, the answer is “yes.”
- Timely reporting – In addition to consistently accurate reports, outsourcing your accounting means that your reports will always be completed and distributed on time, according to schedule.
- Informed decision making – Armed with accurate and timely reports, you and your team will have the best information available with which to make decisions. Program managers will know if funds are available and you will always have the latest information to present to the board.
- Better leverage board talent – Knowing that you can rely on the accuracy of your reports, there’s more opportunity to act strategically. Confident about the true state of the organization’s financial health, the organization is in a better position to leverage the board for ideas and arm them with data to assist with their fundraising efforts.
- Improve chances of grant awards – Having access to nonprofit accounting software and up-to-date financial status helps you satisfy the reporting requirements of existing grants and puts your organization in a better position to win additional grants.
- Attract donors – We’ve said it before but it bears repeating: Accountability and transparency begin with sound financial management. Savvy donors will probably look elsewhere if they sense chaotic back office operations. Professionally managing your funds is the first step in attracting donors to contribute to your mission.
- Maintain donor confidence – Receiving that first donation is wonderful. But the real magic begins when a one-time donor becomes an ongoing donor. Donors want to know that their gifts are resulting in the utmost good. A solid accounting regimen will bring new level of confidence to your communication.
- Improved stewardship – Better accounting practices and tools can dramatically improve stewardship. Simply put, you can’t be a good steward if you’re making your best guess about your financial status. Employing best practices and market-proven accounting tools will give you a new level of visibility into your financials and program effectiveness.
- Maximum delivery to constituents – Knowing the level of program funding available means better serving constituents. Without an accurate picture of what’s been spent and what’s available to spend, you risk overspending or you risk underspending and not helping as many constituents as possible. Timely, accurate accounting means no more risk – you know exactly what you have and what you can or cannot do.
Nonprofit organizations owe it to their constituents, community, and funders to address their accounting professionally. In order to do that, you need to have expertise, processes, systems and tools in place – it’s a daunting task at best, and for most growing nonprofits an overwhelming order if required to do it in-house.
That’s why successful executive directors are opting to outsource accounting. It’s solves their accounting dilemma in one easy decision with budget friendly monthly payments. It brings the proper accounting expertise to the organization’s financials immediately, along with the proper internal controls, and the ongoing benefit of accurate, on-time, financial reporting.
If ‘Top 11 Reasons for Nonprofits to Outsource their Accounting’ gave you pause about the state of your organization’s accounting operation, give us a call, we are more than happy to consult with you on what outsourcing would for your nonprofit.
Or click on the link to download Optimal Nonprofit Financial Management through Outsourcing.
Rocky Davidson Macon, GA
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