Last month I asked, Why QuickBooks?" This month, let's discuss why a nonprofit organization should outsource some or all of its accounting and finance functions.
Just to clarify, we are not suggesting two opposing approaches. An ideal scenario might consist of implementing QuickBooks in-house, while enlisting professional support in the following areas: developing the chart of accounts, creating a framework of internal control, facilitating training for the staff accountant, and supervising monthly reconciliation and financial reporting.
Unfortunately, since financial management is not a high priority to many executive directors, nor is it sufficiently enforced by Boards of Directors, nonprofits in the startup- to-mid-growth phase seldom achieve this ideal scenario. While managers don't purposely ignore financial management, the financial stewardship role often pushes them out of their comfort zone, or they are focused on their organization's programs and fundraising activities. NFP Partners' business is based on the belief that nonprofit decision makers understand and accept their responsibilities for financial management and the attendant risks.
As it is challenging to find a qualified accountant who possesses the accounting and broader skills necessary to fulfill both higher-level reporting and analysis tasks and day-to-day operations, most small- to mid-size organizations (with operating budgets under $2 million) should seriously consider outsourcing most or some of their finance and accounting functions. It is not a good internal control practice to have one person is responsible for all financial tasks, including bank deposits, entering transactions, reconciling accounts, and preparing financial reports.
NFP Partners offers an outsourcing arrangement that is tailored to its clients' needs. For more mature organizations that already have an accountant on staff, our team provides month-end review, reconciliation, and reporting, as well as controller or CFO special services. This collaborative arrangement can also work well when an internal staff person is not trained as an accountant, but he or she is able to perform administrative tasks, including day-to-day accounting operations. For organizations in early growth stage, we provide a turnkey solution.
The cost factor often comes up in our discussions with future clients. We are able to demonstrate that the cost of outsourcing will not exceed the true cost of maintaining an in-house function, and that our efforts will result in enhanced quality of financial information and internal control.
Read More About the Benefits of Outsourcing
To determine if outsourcing could work for your organization, please visit our website, or feel free to contact me directly at 303-357-1058, or via e-mail at Lee@NFPpartners.com.
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