Nonprofit leaders have some unique challenges, but one of the most common and pressing issues to address is that you need to get things done quickly, but also need to get these things done without the resources of your for-profit counterparts. Whether that means creating reports without a large staff, answering donor questions or managing funds without relying on an IT team to write scripts, or simply closing the books each month, you have a lot of work with not much help. Read more
Do you manage finances at a church? If so, you know that there are some unique challenges. From managing people to managing funds, it’s likely you are doing more than just financial work, and when the financial work starts taking more and more time each month, it’s taking away from the other work you need to do, as well as the ministry work you want to do. Today, we would like to share with you three common challenges that affect churches, and a couple options to overcome them.
Monthly and/or Weekly Reporting
Churches and other faith-based organizations are held to a high standard by their parishioners, who like to see that their tithing and other contributions are being used to do good for the community and for the church itself. Church leaders like to see steady or rising attendance numbers, and stakeholders like seeing a stable financial future for the church.
For financial and church operations professionals, the best way to communicate this is through a weekly, monthly, quarterly, or annual report to share the financial health of the church and each of its funds, as well as attendance numbers, projections, P&L statements and more.
Unfortunately, for churches without the processes or technology in place to get the job done, generating these reports requires a lot of manual effort—copying and pasting data between multiple documents and spreadsheets, transposing information from paper into a computer, manually analyzing the numbers, and hoping there are no errors in any of the processes or documents.
Put simply, the process of generating a report takes more and more time each month, and the growing amount of data means that each month takes just slightly longer than last.
Getting Information to Decision Makers
If the information is delayed—or worse, incorrect—decision makers are unable to lead your church’s long-term strategy. When it comes to fund accounting, delays in reports could hold back your ability to expand, improve, or work on outreach—all of which could lead to lower turnout or fewer contributions from parishioners who feel their money is not being used properly.
By improving processes and technology, you can gain access not only to faster reports, but smarter and more robust reports based on more metrics.
How much do you spend on paper each month? With outdated accounting technology, you could be wasting much-needed on paper, when there are modern options that help you to break your paper habit.
With newer technology, you can get rid of the paper-based processes that waste time and money to complete, allowing you to focus even more energy on ministry. By automating your church’s financial processes, you can free yourself of the paper costs and the time and effort it takes to print, scan, convert, and enter data.
The cloud has been a game changer in the nonprofit space, and now, even more churches are getting on board. By moving to the cloud, churches are able to get world-class technology without the world class costs that come with it. Better security, fewer upfront costs, guarantees you can count on, and more.
Conclusion: Have the Time and Money to Do More
When you can focus your time and effort on ministry, it means that you getting back to the basics and focusing on what really matters: Doing God’s Work. If you want to grow your church without growing your accounting staff we would like to hear from you. Intacct Cloud Financial Management is easily customizable to your church’s needs, Intacct can help you save money, automate processes, strengthen internal controls, and easily report to multiple stakeholders. Intacct helps your dollars go farther, so you can do more with less and be the best steward possible.
Intacct Success Stories
Churches of all sizes and denominations have made the move to embrace cloud accounting with Intacct. From local to multi-location megachurch, Intacct has been there, providing the automation that financial leaders need to get back to focusing on the mission. A fair share of Intacct’s 11,000+ customers are churches, and among the success stories:
rinehimerbaker is ready to help your church leverage the cloud to improve financial processes and free up time to get back to mission and ministry. Get in contact with us to learn more.
When growth is the name of the game, your next move isn’t always “increase headcount.” With today’s cloud-based financial software systems, technology steps in to create pivotal process efficiencies and boost the productivity of the team you already have in place. Automation is key. It helps you make the most of your existing resources so you can invest more strategically than you ever thought possible. Read more
ASC 606 is on the horizon, and if the warnings being issued over the past year haven’t gotten you motivated to start looking at your contracts and accounting practices, here’s another warning: Public organizations need to apply the new revenue standard for annual reporting periods beginning after December 15, 2017. Nonpublic organizations should apply the new revenue standard to annual reporting periods beginning after December 15, 2018. Read more
In sunny Florida, we rarely see clouds of the meteorological sense, but when they are around, it’s important to know what they mean—because stormy skies may mean we need to board up or batten down the hatches. At rinehimerbaker, we are well-versed in technological clouds, and would like to send out a PSA—don’t fall for “faux clouds.” Today, we would like to break down the differences between real cloud and fake cloud, and share with you what each means for your growing business. Read more
Now that you’ve filed Form 990, it’s time to get back to the daily grind of accounting. Was this year more challenging than last? Will next year be even more challenging? As your nonprofit organization grows, you face additional challenges that come with said growth—often facing more stakeholders, stricter requirements, and smaller budgets than a comparable for-profit organization. Needless to say, you face some unique challenges. Today, we would like to look at five of the biggest challenges that financial leaders at nonprofits face, and how to address them as you grow.
Five Top Challenges Nonprofits Face Day in and Day Out
Challenge 1: Complexity in Nonprofit Accounting
For nonprofit organizations, the daily tasks of accounting and financial management are driven by a broad array of complexities. Nonprofits have to work with different documents than their for-profit counterparts, including statements of activities, statements of financial position, statements of cash flow, and the Form 990.
With different cash flows and income streams come different challenges, as well. Grants, donations, break-even product sales, for-profit subsidiaries, and more mean that you have a lot of different questions to answer—all while trying to focus on the mission.
It’s a complex environment with a lot of stakeholders, and nonprofit organizations need to be able to answer questions quickly and accurately.
Challenge 2: Internal Controls
Most for-profit corporations create their internal controls, reporting, and financial monitoring by products, divisions, geographies, and entities. Nonprofits have remarkably similar needs, seeking to manage their monies by grants / donors, programs, geographies, and other dimensions.
For national nonprofits—especially ones looking to improve engagement by decentralizing and localizing operations with a chapter structure, this creates a set of complexities akin to major franchises or other multi-location businesses. Yet in this kind of environment, the central office still needs to take control of these decentralized locations, rolling up all of the information and ensuring that all are operating within the standards of the national.
Challenge 3: Complexities in Grant and Fund Management
While a for-profit business may have to answer to a few external requests for information, a nonprofit has to answer to each grantor and funder differently. Every funder wants to see how his or her investment is going, and this means reporting to a great deal of people with different expectations.
Without automation, these reports could takes days or weeks to complete, and still not provide all of the expected information. In terms of grantors, their expectations, while just as high, also require your nonprofit organization to report on general vs. restricted funds, adding even more complexity and challenge in reporting.
Challenge 4: Meeting Stringent Reporting Requirements
In a challenging economy, agencies, social-service organizations, charities, and other nonprofits are under tremendous pressure to acquire, secure, and maintain funding sources to ensure their continued operation. Transparency is an essential strategy for securing and keeping those donors and sponsors on board.
Communicating the effectiveness of your initiatives can be one way to secure more funding and to maintain your status in the eyes of the government requires accuracy and transparency. Add on top of this internal reporting requirements, and you have even more challenges that can’t be addressed with manual reporting.
Challenge 5: Handling the Needs of a Growing Nonprofit without Growing IT Budgets
Even while struggling to address all of these challenges, you have to do so with a much more stringent budget than your for-profit counterparts. One of these strict budgets is IT—it’s likely you don’t have the people or capital to allocate huge amounts of money on a software solution.
Nonprofits need to be able to do all of this reporting while still increasing their contribution to the mission, and one of the most common ways they are doing this is through cloud financials.
Download the Nonprofit CFO Survival Guide
Is your nonprofit or not-for-profit organization struggling to keep up with increasing needs with the same limited resources? Nonprofit CFOs are under the gun to achieve so much: to automate processes, improve productivity, create greater levels of transparency and visibility, enhance the governance of the organization, and strengthen the team’s decision-making and strategic focus.
If you feel that your organization is being held back by manual operations, primitive tools, and paper-based processes, we would like to share with you an immensely helpful whitepaper for finance leaders at nonprofits looking to take control of their operations and move toward their mission.
Titled The Nonprofit CFO’s Survival Guide—A Mini Field Manual, this whitepaper explores the aforementioned challenges in depth and how to address them. Download the Nonprofit CFO Survival Guide here.
rinehimerbaker, llc is proud to serve the unique needs of nonprofit organizations across the state of Florida. From outsourced accounting to software selection assistance, we have worked with nonprofits before and would love to help you. Learn more about Intacct for nonprofit organizations, compare it to other solutions like Abila and QuickBooks, and contact us for more details.
When you’re just starting out, it’s good to stick with what you know, what’s affordable, and what’s built for a business of your size. For most small businesses, this means the adoption of an Entry-level accounting system like QuickBooks, which is built to handle the basic needs of entrepreneurs—offering basic functionality at a reasonable price.
How Can You Tell You’ve Outgrown QuickBooks?
This is great for the early stages of a business, but when you begin to grow, you begin to notice that your software isn’t helping you get what you need—the right information at the right time, and isn’t making your job any easier. It takes longer to close the books, the software runs slower, and essentially, you begin to learn that the software is holding you back.
In an earlier rinehimerbaker blog, we explored some of the biggest red flags that pop up—limited reporting, double entry and keying errors, impersonal support, a lack of integration, and lack of speed—that appear when your business outgrows QuickBooks. We followed this up with an article highlighting the three biggest things holding your finance department back and the five biggest mistakes made at growing companies.
Take Your Accounting to the Next Level
Today, we would like to share with you a new, complete resource helping you to take inventory of where you are now and to make a decision that can facilitate growth by making your job easier. Our new whitepaper, Outgrowing QuickBooks—How to Know It’s Time to Change, shares with readers:
- Eight Signs that Your Organization Isn’t Achieving Its Potential
- Major Considerations You Should Make When Choosing a New Accounting Software
- Six Steps to Implementing a New Accounting Software Built for Company Growth
Outgrowing QuickBooks: Challenges and Opportunities
All this and more is available when you download Outgrowing QuickBooks—How to Know It’s Time to Change. Learn more by reading the first 3 pages of the whitepaper below:
We discussed some of the changes and challenges the new standards pose for organizations across all industries in our two-part blog. Part one explores the basics of ASC 606, including background and departmental effects, and part two explores the five step process to recognize revenue as defined under the standard.
The new Revenue Recognition Standards (ASC 606/IFRS 15) were jointly announced by the Financial Accounting Standards Board and International Accounting Standards Board in May 2014, and after comments, effective dates were set: Companies are to officially move to the new standards for annual reporting periods beginning after December 15, 2017 for public companies and annual reporting periods after December 15, 2018 for private companies.
With this in mind, the new standard was meant to condense a wide range of standards, so the changes that an Airline will need to make will differ from a Life Sciences organization, a Construction Firm, a Nonprofit, and so on.
The standard as a whole makes changes to the following industries, which we will explore below.
Industries Affected by ASC 606
Different Industries, Different Changes and Challenges
As we explored in part 2 of our ASC 606 Overview, there are five steps to revenue recognition, which we will discuss in-depth in coming months (UPDATE: Click the links below to read in-depth advice on each step):
- Step 1: Identify a contract with a customer
- Step 2: Identify performance obligations
- Step 3: Determine the transaction price
- Step 4: Allocate the transaction price to the performance obligations
- Step 5: Recognize revenue when/as performance obligation(s) are satisfied
The new standard replaces over 200 specialized and/or industry-specific revenue recognition standards under current GAAP. In essence, this will make things easier a decade from now, but will take a lot of work now. Knowing this, the steps most likely to affect each industry differ, as summarized below.
|Industry||Step 1||Step 2||Step 3||Step 4||Step 5|
|Aerospace and Defense||✔||✔||✔||✔|
|Construction, Building, Engineering||✔||✔|
|Licensors (Media, Life Sciences, Franchisors)||✔||✔||✔||✔|
For even more information on the proposed changes, see the industry commentary from different task forces on the AICPA Website. For a full list of issues discussed and addressed, see the AICPA Document addressing the multiple issues.
Conclusion: Plan, Change, Execute
This standard is coming up fast, and it’s time to at least discuss your plans and next steps so that you can decide on a full or modified transition method, and make any necessary changes before the deadlines.
One of the most common issues that finance leaders notice is that their software isn’t equipped to handle the challenges posed by the transition to ASC 606, and on top of making changes to their revenue recognition practices, they may have to implement a new accounting software before making the switch. If this is the case, time is of the essence, as you will need to first make the decision on an accounting software, implement the software, and then begin working on adopting the new standard.
Learn more about the standard and how to choose an accounting solution that can ensure compliance by reading the following whitepapers and viewing the following three-part on-demand webcast.
Guides and Whitepapers: ASC 606/IFRS 15
- Analyst Report: Intacct Leads the Way in ASC 606 and IFRS 15 Revenue Recognition
- Six Rules for ASC 606 Readiness
- ASC 606 and Subscription Businesses—Why Compliance Can’t Wait
On Demand Webcasts: ASC 606/IFRS 15
Intacct recently presented a three-part series on the new standards, which you can view on-demand.
Conventional wisdom tells us that we have to make mistakes in order to learn and grow. That’s definitely the case with on-the-rise businesses, who make plenty of mistakes as they move their operations from entrepreneurial through enterprise-level. Sure, there’s a lot of in-between—but near-constant change and recalibration in the ways the organization manages everything from its finances and supplier relationships to customers and human resources means plenty of opportunity for missteps.
When it comes to its accounting functions, a business needs to repeatedly scale to accommodate new partners, additional transactions, and more complexities at almost every turn. So what mistakes are commonly made along this road of growth? And perhaps more importantly, what do innovative leaders do to better manage change and arm their finance and accounting teams with the tools for success? To avoid making the mistakes in the first place?
Let’s take a look.
Failing to Deliver Insights On-Demand
As a company grows, the stakes get ever greater. Not only do decision-makers have more questions to ask, they have more question to answer from various stakeholders. Their answers need to be informed—relying on more than gut instinct. And financial data is often the most important part of what they need to consider while selecting the “best” path forward.
In the early stages of company growth, it was perhaps easier to produce actionable insights because there was simply less to “go on.” But with increased complexity (and more information available from the accounting department), running reports and landing on the critical numbers takes longer—that is, as long as the finance and accounting team is still using yesterday’s technology.
When a manager asks for performance results or projections based operational or financial data (especially if it’s real-time data), they need to see it now. If your team can’t deliver it until tomorrow, it becomes clear to all that you probably should have upgraded your finance and accounting software yesterday.
With Intacct, your team is empowered to create any kind of report, dashboard, or visualization they want, with exactly the metrics they need. And that enables managers to ask new business questions, get fast answers, and make confident decisions—in the now. For more insights, turn to The 3 Top Reasons Your Accounting Team Wants to Upgrade to Intacct.
Keeping Your Financial Information in Silos
Another side effect of managing a growing business is a set of disparate business systems. In the first place, they weren’t set up to “go together,” so they don’t “grow together.” Secondly, if they’re legacy or manual-based systems, they no longer offer adequate functionality, which further fragments processes via workarounds and system band-aids. The result is often poor communication between people in different functional areas and not enough sharing of data—making it almost impossible to compare apples to apples and get full visibility into the business’s financial health.
The reality is that when your systems are siloed, you’re not getting the most out of your ever-expanding data. And you’re likely draining productivity, too, as everyone is working towards different goals, with competing agendas. The reality is that systems and people need more—not less—alignment as the business grows. If you’re not bringing them together, you may be thwarting forward momentum. Consider the opportunity costs!
Modern finance accounting systems are powerful enough to integrate functions, pulling data from multiple sources of information to aid in tasks like reporting and document retrieval. With Intacct’s flexible, services oriented architecture (SOA), you can sync up to your other business applications, such as:
- CRM and sales force automation
- Human resources
- Inventory and fixed assets
- Project management
- Payment processing
- Payroll and ACH
With the right system integrations in place, your information becomes more powerful—and so do the insights and decisions they inform.
Relying on Manual Accounting Processes
Consider your finance and accounting team’s various tasks and related workflows: vendor management, billing, journaling, making payments, reporting…this is just for starters, and the work is getting more comprehensive as the company gets bigger, expanding into new markets and into multiple entities. Now consider the work associated with following-up on unpaid invoices, getting caught-up with old expense reports, spending late nights at the office to close the monthly books.
If there’s “manual processing” written all over these tasks, your team is likely spending more time and energy on a daily basis than they need to. Now that your company is bigger, the old methods of accounting (both managerial and financial) have become unwieldy. It would be a mistake to keep plugging along this way—and to not start automating. Using modern technology to take care of tasks like recordkeeping, issuing invoices, paying bills, managing expenses, generating reports, etc., will free up your team to focus on more strategic efforts.
Adopting automation through Intacct is a sure-fire way to relieve your manual woes. Learn more about how to embrace the automation needed to thrive today.
Not Having Audit-Ready Financials
Are you ready for a visit from the auditor? Do you know what it takes to be audit-ready? Do you want your audit process to run smoothly upon a solid foundation of well-documented transactions and accurate balances? Do you make it easy for your auditor to find the information they need?
If reading these questions leaves you feeling uneasy, there’s hope ahead. It’s never too late to start improving your accounting processes to avoid costly mistakes and oversights. According to Intacct, there are three things you need to be audit-ready:
- Revenue – ensure your accounting system effectively automates, manages, and documents your revenue accounting treatment, with the ability to define separate revenue recognition schedules and rules for each individual contract and line item.
- Receivables – establish an auditable basis for assessing the value of receivables. Your accounting software must track complete transaction details “forever” and maintain secure access to complete customer histories, allocating payments to the right invoices and periods.
- Consolidation – understand that massive spreadsheets tend to contain formula errors and missing some general ledger accounts. For a complete and accurate financial consolidation, you should rely on your accounting system automate provide a full set of consolidating and eliminating journal entries so the auditor can see the details behind each entry.
Using the Wrong Accounting Software
You may have outgrown the software that worked when you were a smaller organization—or you’re finally accepting that Excel spreadsheets are a far cry from robust accounting/reporting software. Either way, your current system is limiting you and holding you back from faster, more targeted growth.
As the other common mistakes have shown, adopting a built-for-growth finance and accounting software solution is the #1 way to give you more control and visibility into your financials. It can help you avoid mistakes that could be costing your business—or that could lead to opportunity costs. Find out How to Know When QuickBooks No Longer Makes the Cut
Whitepaper: Outgrowing QuickBooks
rinehimerbaker has released a new whitepaper for companies outgrowing QuickBooks. Outgrowing QuickBooks—How to Know It’s Time to Change shares the challenges that businesses face when growing, and the opportunities they have to ease growth. Learn more by reading the first 3 pages of the whitepaper below:
As your business grows, you begin to notice that the challenges of today take a little bit longer to address than they used to. With more growth comes more data, and with more data comes more time needed to complete basic tasks like closing the books each month. Unfortunately, in the wake of growth, too many businesses commit one or more of the following sins that limit visibility and cause business pain.
Seven Deadly Sins of Financial Management
A recently released infographic took a look at common business practices that hinder growth, especially when you’re outgrowing entry-level accounting software like QuickBooks, noting the following seven sins that finance leaders commit, many of which can slow your business to a grinding halt:
- Scattered Business Data: How much harder is it to close the books each month than it was last month or last year? As you grow, you have more financial data being generated each month, and managing this data in spreadsheets or on paper is not a good solution.
- Departmental Silos: Did you get that email? How about that invoice—that was sent three weeks ago? Communication between departments can make for a huge drag on company productivity, and for many organizations the best way to connect a multitude of departments is to set up an enterprise social network that cuts down on email strings and puts data in front of the necessary users when and where they need it.
- Spreadsheet Gluttony: Did you know that 88% of Spreadsheets have errors? With 89% of companies using spreadsheets for planning budgeting and accounting, a pretty hefty amount of organizations could have a fatal mistake somewhere in their books. Learnmore in our recent article, “Don’t Rely on Spreadsheets and Luck—There’s a Better Way.”
- Slothful Tracking: Another deadly sin is one that affects more than just finance. When an organization uses laborious manual processes for expense management, they are only managing and measuring, not optimizing. By moving expense management to the cloud, you could see cost savings of over 20% or more.
- Stale Financial Data: With so many manual processes in place, data not only takes forever to gather, it is inaccurate and has a short shelf life. Companies looking to overcome this should take a proactive stance, seeking a forward-looking system that can calculate information when you need it, where you need it, and based on the drivers you want.
- Lack of Compliance: With new ASC Revenue Recognition standards on the horizon, as well as increasing scrutiny into the numbers from customers and investors, compliance is a necessity moving forward—and spreadsheets can’t cut it.
- Antiquated Technology: Many of the solutions available to growing businesses were designed before the dawn of the internet, not for the modern needs of the modern business. Without forward-thinking technology, your organization is stuck in the past and unable to focus on technology.
See the Entire Infographic
The following infographic shares more about how you can gain absolution for these sins, so that you don’t end up in accounting hell (or worse—jail).
Gain Absolution with Modern Accounting
If you want to fight off expense tracking sloth, spreadsheet gluttony, and more, you need to swallow your pride and understand that it’s not you, it could be your processes or systems. Learn more about taking control of your organizations financial future by downloading the whitepaper, Eliminating the Risks of Spreadsheets in Finance, as well as by perusing the 2017 Buyer’s Guide to Accounting Software.
Ready to learn more? rinehimerbaker has released a new whitepaper for companies outgrowing QuickBooks.
Outgrowing QuickBooks—How to Know It’s Time to Change shares some of the biggest challenges that businesses face when growing, and the opportunities they have to ease growth.
Learn more by reading the first 3 pages of the whitepaper below: