Working at or managing a nonprofit is distinctly unlike the world of business, but you still have many of the same needs. You have to balance your budget and monitor your spending, while covering any travel expenses, or materials that you may need. While hoarding receipts may technically be an option, it isn’t exactly foolproof or a great way to manage your time. Nonprofit accounting practices have to be meticulous, especially since you’re accountable to a board of directors, your local community, clients, and government agencies. Partnering with an experienced accounting firm is perhaps your best bet.
You may have already considered simply hiring personnel to meet your accounting needs. Unfortunately, you could run into a number of problems. First and foremost, you’ll need someone that already has the background. In-house accountants with a background in nonprofit work are highly sought after and difficult to find. While you could hire someone fresh out of university, they’ll lack hands-on experience. That’s a potential risk, since a single mistake could cost you dearly. Smaller nonprofits or grassroots agencies simply may not have the budget for bookkeeping and accounting staff.
This really can’t be overstated. Depending on the number of programs, projects, staff, and volunteers you have, your accounting needs can quickly become more complex than you anticipate. Combine all of that with travel, training, and materials, and you could be looking at a serious workload. That’s not even mentioning grant funding, donations, or endowments. While all of this may seem common knowledge to you on the programmatic side of things, the fiscal role looks quite different.
Having an accounting partner that specializes in working with nonprofits and understands your needs makes a massive difference. This is true both in terms of outcomes and also with your peace of mind. Having someone who understands the work you do, the role that you play in your local community, and the needs that demand your attention, really does affect your confidence in their success.
Everyone knows that things don’t always go according to schedule, especially if you deal with disaster response or other time-sensitive areas. It’s essential that you have access to your partner, so you can ask questions, receive updates, and generally stay on top of your finances. Nonprofit accounting isn’t easy to manage, but it’s integral to what you do. Having a firm that appreciates the demands, occasional chaos, and importance of your mission can make a real impact.