Every non-profit has operational processes that must be repeated periodically. Optimizing these processes to maximize efficiency is important for ensuring that your non-profit minimizes costs. Even tightly run organizations can use some improvement — particularly in the accounting area. Here are six ideas to help you improve your non-profit accounting processes. Master Finances: Explore Non-Profit’s Accounting Functions. Insights for efficient financial management, compliance, and organizational prosperity.
- Set and hold to cutoff dates. The more consistent and timely your organization delivers the necessary information to its finance manager, the faster they will be able to deliver financial statements. This can be facilitated by instituting and adhering to monthly cutoff dates for invoicing and expense reports. Too many adjustments — or waiting for different employees or departments to turn in invoices and expense reports — wastes time and can delay the production of financial statements.
- Reconcile accounts monthly. It’s likely that you’ll be able to save time at the end of the year if you reconcile all of your bank accounts immediately after the end of the month. as well as accounts payable and accounts receivable data to your statements of financial position. It’s simply easier to correct errors the earlier they’re discovered. Reconciling monthly ensures that any anomalies are tended to quickly, easing the workload at the end of the year.
- Batch processing items. Don’t enter only one invoice or cut only one check at a time. Minimize costly switching time by setting aside blocks of time when multiple items are ready to process. Some organizations process payments only once or twice a month. If you make your schedule available to everyone, fewer “emergency” checks and deposits will surface.
- Implement records oversight. Make sure that the party responsible for financial oversight (e.g. CFO, treasurer, or finance committee) reviews monthly bank statements, financial statements, and accounting entries for obvious errors or unexpected amounts. This is most effective when reviewing statements right after your monthly submission cutoff date.
- Use all relevant software features. Many organizations underuse the accounting software package they’ve purchased because they haven’t learned its full functionality. Due to the complexity of many software packages, consider hiring a trainer to discuss your software’s complete functionality with your staff and teach pro-tips for efficient use.
- Periodically review processes. Accounting, like any other system, can become inefficient or outdated over time. Set aside time, generally once or twice a year or when team members change to review internal processes, and look for labor-intensive steps that could be automated or steps that don’t add value and could be eliminated.
Ernst Wintter & Associates LLP specializes in California non-profit audits and tax preparation. Contact us today for help with your non-profit audit or tax prep needs.