NonProfit Accounting and Record Keeping is Now Effortless!
Running a nonprofit organization means dealing with tons and tons of paperwork that you are required to submit to grantors, board members, federal government, state and local government throughout the year.
All of that paperwork has to be organized and packed into boxes to be transferred to different locations when an entity or an individual performs a review, an audit or a compilation of all these documents.
Can you imagine all the work, the challenge that implies to keep the accuracy and organization of “ALL” these documents? And let’s not even imagine the transfer of all these documents from one place to another losing or misplacing any of those important documents while transferring is almost inevitable. These important documents could be signed checks, board members personal information, volunteers applications with personal information, contracts, bank accounts information, etc..
Misplaced or lost data inside a nonprofit organization accounting system can be easily resumed in one word: CHAOS
ABC Not for Profit is set up and has revenue, but not enough revenue to hire a full-time accounting staff with a CPA on board. They may have a treasurer that volunteers to help out, but this treasurer encounters so many problems keeping up with all the overwhelming paperwork.
The traditional way of doing things were that ABC Not for Profit received bills in the mail and had a board member pick them up (maybe from a PO Box). Upon opening the bills, they would forward the approved bills to the Treasurer. The Treasurer would have to wait to receive them in the mail, manually write checks and sign them and then mail this check to another board member to co-sign and sign off on the attached bills. This old way could cost a lot of money in postage, possibly late fees if the process got delayed in between getting the bills and checks.
Also, another consideration is what happens to all those physical documents? Who keeps all these documents for this organization? If the treasurer is rotated every three years, how much paperwork is that to keep? With each new board member you bring on to your nonprofit organization, documents and bills get lost, and, therefore, the bookkeeping falls through the cracks.
Failure to provide accurate and complete financial reporting can result in reducing and even losing credibility among stakeholders, contributors, and governmental entities. If worse, you can jeopardize the operational status of your nonprofit organization.
A recent study revealed that nonprofit organizations have a 6.1 accounting error rate—which translates into a 60% higher error rate than a publicly traded corporation. These errors are caused by a poor accounting system and the impossibility of keeping track of every single document.
Most nonprofit organizations overuse and overwork their volunteers, which usually leads to poor performance. Ultimately, these volunteers fail to fulfill the purpose of the organization and its goals.
In today’s accounting world and with the help of today’s technology, all of the issues mentioned above can be easily eliminated by simply using a Cloud Integrated accounting system.
What is a Cloud Integrated accounting system? What are the benefits of using this innovative accounting system? The answer to this interrogation is indeed the best news any nonprofit organization CEO and board members could ever hear; let me tell you why…
Let’s start with the possibility of sharing a real-time snapshot of all of your organization financial information with anyone who would like to have access to review/audit/keep records of your nonprofit organization. Wouldn’t that be great? How is this possible?
Here is how a Cloud Integrated System helps to keep easily track of all of your nonprofit organization accounting documentation and also provide a cost-effective and responsible solution for your organization transparency and credibility to stay active and prospering.
- Xero – Beautiful accounting software with all the time-saving tools you need to grow your nonprofit organization. This accounting software provides you with online accounting that can be easily viewed and managed by all of your board members even from their phones.
- Customized Solution – At Covington+ Associates, CPAs Inc., we can provide your nonprofit organization a customized solution using Xero along with incredible tools like Bill.com for receiving and paying bills. Bill.com saves you postage fees and time, the bills are uploaded to your organization’s account and each board member can log in via the internet and approve and ultimately pay the bills due. This information is automatically linked your accounting system (Xero).
- Hubdoc.com – In regards to retaining historical information, your non-profit organization would use a tool like Hubdoc.com to keep track of all bank and credit card statements. The images of checks and deposits would be available as easy as just logging into your organization’s account. This information is also automatically linked to your Xero accounting system.
- Expensify – In the instance of reimbursing board members for travel, lodging, and meals, your organization would use Expensify to receive electronically all the expense reports with backup documentation to pay them accordingly. An expense report can be created from board members cell phone by simply taking a picture of the expenses receipt. This wonderful tool will automatically upload your receipt and match it with your expenses in your accounting system (Xero).
The solution in this document provides a cost-effective and efficient way to operate your organization. Your volunteers will be less fatigued and worn out. Instead, you can use your volunteers for the expert advice and connections you need to grow your organization.
At Covington+ Associates, CPAs Inc., we specialize in Cloud Integrated accounting system that fits all nonprofit organization needs.
Contact us now to help your nonprofit organization get to the next level.
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