As your not-for-profit strives to use its resources as effectively as possible, you might consider outsourcing the functions that fall under your accounting and financial umbrella. One key benefit to outsourcing for small to mid-sized nonprofits is that it minimizes the time that executives must spend consumed with accounting operations and managing related administrative tasks assigned to other employees.
Some responsibilities you might consider outsourcing include:
• Processing payables, receivables and cash transactions,
• Reconciling accounts at each month-end,
• Preparing financial statements, budgets and forecasts,
• Assisting with tax and grant reporting requirements, and
• Adequately communicating financial matters to your board.
Moving some or all of these functions to a specialist opens up time for your team to focus, instead, on mission-related tasks.
Turning to an experienced service provider can result in a number of strategic opportunities for a nonprofit organization, which include:
• Access to accounting professionals whose experience and knowledge can help you reduce expenses and increase revenues.
• Access to those same professionals to help you navigate continually changing reporting and tax requirements.
• Working with a diversified accounting team (rather than a single in-house individual at your nonprofit), which allows for continuity of service and additional oversight.
• Reduced spending, as the cost of a skilled director of finance or CFO is often more expensive than what the organization can afford and often more costly than the rates for outsourced specialists. Cost savings provide investment opportunities for more development staff or salary increases to minimize turnover.
• Improvements in internal controls and streamlined workflows facilitated by the outsourced firm’s ongoing training and experience working with nonprofits similar to yours.
• Implementation of new technologies and cloud applications (such as with accounts payable), that in turn improve workflow performance. Such technology is often well suited for virtual teams
• Elimination on your part of training or managing accounting personnel.
Depending on your organization’s size and complexity, what you’d pay an experienced accountant internally might equal or often exceed the cost of outsourcing accounting functions. With an outside firm, you pay only for the amount and level of services you require. With an on-staff accountant, he or she may spend some time doing work that someone at a lower pay level could handle equally well. Outsourcing also will spare your not-for-profit the expenses associated with a regular employee, such as payroll taxes and health insurance.
A benefit that many smaller organizations derive in working with an accounting services firm is reduced fees for audit and tax services — because of the professional attention to accounting details you receive during the year. And most of the accounting questions that typically arise in an audit already will have been resolved.
No matter the size of your budget, there is little doubt that hiring outside experts to handle complex accounting responsibilities and reduce administrative burden allows you to maintain focus on the not-for-profit’s strategic direction. As tax codes, accounting principles and technologies change, a seasoned and well-trained accounting team will ensure your organization is well-positioned to fulfill its mission.
CBM offers outsourced accounting services through responsive teams and efficient workflow designed to minimize your time and effort. If you’d like to discuss how CBM’s team can help your not-for-profit, please contact Dominick V. Bellia, CPA, CITP via our contact form.