Why Automation Matters

How Automation Can Help Nonprofits

Many nonprofits spend years relying on manual data entry, spreadsheets, and basic financial tools like QuickBooks. Why? Because those processes work…at least at first.

 

As your organization grows, you might find that the time you’re spending on repetitive manual tasks is growing too, with month-end closes growing longer and longer, until they seem to take up most of the month. All those tedious, time-consuming activities can lead to a dash to the finish line that causes oversights and errors.

 

To address these challenges, many nonprofits are moving to Sage Intacct and other cloud ERP solutions that automate key processes, including close management, saving time and improving accuracy.

accounting professional using a computer to automate financial functions

Spend More Time on What Matters

The primary benefit of automation is that it saves time—often hours and hours of time every month. When you fully automate your month-end close, for instance, you basically move into a perpetual state of close, so there’s no months-end rush where you’re digging through data and struggling to reconcile budgets.

 

Organizations that automate can take the hours employees formerly spent on mind-numbing manual tasks and instead devote them to bigger-picture, more intellectually demanding activities. That means more time developing and executing new strategies, cultivating donors, improving marketing, and performing other mission-focused work.

 

The Right Numbers Every Time

Another challenge with manual processes is that they are inherently error-prone. Even the most diligent of employees will make the occasional mistake, which can lead to hours or days of confusion. Worst of all, if data entry or other errors aren’t caught right away, they might be seen by donors and board members, which can do real damage to your nonprofit’s reputation.

 

By streamlining and automating data flow and reconciliation steps, you can reduce the risk of human error and gain more confidence in the integrity of your processes. And you can still maintain control over your automated processes—updating and fine-tuning as needed to address changing requirements.

 

Time to Automate?

Insero & Co. can help you decide whether it’s time to automate your processes and, if so, how to make the shift as seamlessly as possible using best-in-class software. Our team has decades of experience helping hundreds of nonprofits through these and other challenges. Contact us to talk about the relationship-based services we provide and how they might help save you time every month.

Key Benefits of Nonprofit Dashboards

Introducing a Better Nonprofit Dashboard

Quick: Do you know your funding mix, balance sheet performance, and the composition of your key revenue sources? If it’s going to take you a while to patch together responses to those questions, it might be time to consider upgrading to a better nonprofit dashboard.

 

One such solution comes from Sage Intacct, the cloud financial solution, which has teamed up with GuideStar, the largest source of nonprofit data, to offer pre-built dashboards that provide real-time insights, automation, and visibility.

nonprofit laptop computer with financial dashboard charts and graphs

Connect Directly to GuideStar

The general public, foundations, other nonprofits, and many others rely on the detailed nonprofit information compiled in GuideStar. And now, with the Sage Intacct Nonprofit Financial Board Book powered by GuideStar, you can connect directly to GuideStar’s benchmarking tool, ensuring that your organization is fully aligned with GuideStar’s recommended metrics and best practices.

 

The Sage Intacct Nonprofit Financial Board Book powered by GuideStar calculates metrics automatically using balance sheet, revenue, and expense data that’s pulled from Sage Intacct, as well as your internal donor management, payroll, and other systems.

 

The pre-built dashboards then display the most important metrics—the same metrics GuideStar uses to demonstrate nonprofits’ financial health and ensure they’re on track to accomplish their missions. At a glance, you can view key metrics such as revenue composition, sources of liquidity, and unrestricted cash, which makes it possible to quickly identify revenue trends, track sustainability metrics, and monitor expenses against program results.

 

Focus More Time on What Matters

Because the Nonprofit Financial Board Book calculates metrics automatically using data from Sage Intacct and your internal software, you don’t have to waste hours on data entry. Instead, staff hours can be devoted to viewing the dashboards, analyzing the results, and making more informed decisions to guide the future of the organization.

 

The dashboards make it easy to view critical revenue, funding, and expense data, and use it to guide planning and strategy. Plus, the convenient visuals of key balance sheet metrics that align with GuideStar recommendations make it possible to manage more proactively. The real-time data can also help you prepare for the future, as you track trends, monitor the stability of your reserves, and communicate revenue opportunities to the board.

 

From the main dashboard, you can also link directly to GuideStar and connect with peer organizations to discuss best practices and how to overcome common challenges.

 

Ready for a Better Dashboard?

There are big benefits to having a better nonprofit dashboard that will give you a comprehensive picture of your financial health. Insero & Co. can help you explore all the benefits of the Sage Intacct Nonprofit Financial Board Book and determine if it’s the right choice for your organization.

 

Contact us to talk about the accounting and financial management services we provide and how we might be able to give you more tools to help you trim costs, improve visibility, and achieve your mission.

When Does Outsourcing Make Sense?

When Should Nonprofits Outsource their Accounting?

In the TV show “The Office,” three desk-bound accountants handle the financial responsibilities for the fictional paper company Dunder Mifflin. Minus the outrageous humor, the show’s portrayal of an in-house team of accountants reflects most people’s vision of how businesses and nonprofits operate. The reality, however, is changing.

 

Nonprofits in particular are increasingly moving away from the in-house model and are outsourcing some or all of their accounting and financial management responsibilities. For many nonprofits, the benefits—particularly the ability to focus employees’ time and energy on mission-critical activities—are too big to ignore.

nonprofit bookkeeper paying invoices and using a calculator considering outsourcing

When and How Much to Outsource

One of the advantages of outsourcing is its flexibility. You can outsource whichever tasks you want for however long you want, as in these common nonprofit scenarios:

 

  • You need help preparing for an audit.
  • An employee has left the office, is out sick, or is on maternity leave, so you need temporary assistance with monthly tasks.
  • Your organization is growing, so you need support while you hire and train new employees.
  • Your in-house team doesn’t have the legal or technical know-how to handle particular challenges, such as reviewing bank reconciliations.

 

Other nonprofits find that it’s more efficient to outsource their entire accounting and financial management operations. It’s often a cost-efficient move, and after the initial transition period, many hours formerly devoted to training and supervision can instead be spent working on essential tasks, such as donor cultivation, that directly affect the top line.

 

Outsourcing Benefits

To decide whether outsourcing is for you, be sure to consider the key benefits of each approach. With the in-house model, you can hire a person who understands your particular needs, establish their daily tasks, and walk into their office anytime a question comes up.

 

Outsourcing offers a variety of other benefits. In addition to the time and cost savings mentioned earlier, you can:

  • Access a team of experienced experts
  • Take advantage of the outsourcing firm’s extensive resources
  • Pay only for the help you need, scaling up and down as needed
  • Get high-level analysis and advice without hiring a C-suite employee

 

Although virtual accounting firms aren’t literally down the hall, it’s worth talking with them about how they will communicate with you and how available they’ll be to answer your questions. Expert advice from the best firms should be only a phone call away.

 

Ready to Outsource?

Insero & Co. has been serving nonprofits—including foundations, arts organizations, environmental groups, and more—for over 20 years. We provide a range of services, including outsourced accounting support (budgeting, grant assistance, month-end close, and more), audit services, assessments and strategic guidance, and employee benefit plan audits.

 

Contact us to learn more about our relationship-based service and how we can free your team to spend less time on finance-related tasks and more time focused on your mission.

 

Nonprofit Update: April 2019

IRS answers questions on tax-exempt executive compensation
The IRS released Notice 2019-09 providing guidance to assist taxpayers in implementing new executive compensation rules under section 4960. The Notice provides a number of definitions and clarifies a number of items. An IRS notice is not enforceable guidance, but this Notice can be relied upon until further guidance is issued.

What is a Virtual Accountant?
Nonprofits are increasingly choosing to outsource to virtual accounting firms that provide extensive expertise and allow organizations to focus on their core competencies.

IRS releases guidance on qualified transportation benefit deductions
The IRS provides guidance to assist in determining expenses for parking fringe benefits for purposes of section 274(a)(4) and 512(a)(7). The qualified transit pass expenses, qualified van or transit bus expenses and qualified parking expenses are generally still excluded from employee income under section 132(f), but to the extent the employer provides these benefits as defined in section 132(f), the section 274(a)(4) rules apply to limit the employer’s tax deductions.

Wearable tech: Good for employee health care and good for business
Wearable tech’s transformative power promotes healthy lifestyles, lowers insurance coverage spending and increases employee engagement. Fitbit recently announced that their newest device, Inspire, will be available only to “corporate, wellness, health plan and health systems partners and customers of their organizations, participants and members.” This announcement comes on the heels of tech giant Apple’s publicized relationship with health insurer Aetna to offer Attain, an app that rewards users with prizes if they achieve certain health care goals.

Tax issues arise when employers pay employee business travel expenses
Business travel arrangements require employers to carefully analyze and determine proper tax treatment for employees. Most employers pay or reimburse their employees’ expenses when traveling for business. Generally, expenses for transportation, meals, lodging and incidental expenses can be paid or reimbursed by the employer tax-free if the employee is on a short-term trip.

 

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP. So, in addition to articles from our own staff, we include regular updates from RSM on the latest insights for nonprofit organizations.
Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/muse.html

What is a Virtual Accountant?

Rest assured that despite the “virtual” term, virtual accountants are very real people that provide tangible benefits to businesses and nonprofits. In fact, outsourcing to virtual accounting firms is an increasingly popular option for organizations across the country that want all the expertise of in-house accounting without the costs and hassles of managing employees.

 

How Virtual Accounting Works

Traditionally, businesses and nonprofits have employed in-house professionals to manage all their financial management responsibilities. But increasingly these organizations are outsourcing some or all of these tasks to firms that specialize in providing an array of services, including:

  • Bookkeeping
  • Budgeting
  • Forecasting
  • Cash flow management
  • Financial statements
  • Tax preparation
  • Risk management

 

Virtual accounting firms work closely with each client to identify and deliver the desired services, communicating as needed to discuss particular approaches. Typically, the firm will devote a team of experienced professionals to ensure that each client’s needs are continually met.

 

Why Outsource

Virtual accounting addresses several of the drawbacks of traditional in-house employment:

  • Scalability: When business grows, virtual firms are ready to grow with you—with no need to hire and train new employees.
  • Stability: Employees inevitably leave or retire, often taking proprietary knowledge with them. Virtual accounting firms always have a team of professionals available to meet your needs.
  • Cost: Employing in-house experts is expensive. Virtual accounting firms offer a variety of services that can be less expensive, especially when you factor in the cost of hiring and training new employees.
  • Expertise: Instead of relying on one person or a few to keep pace with all the latest processes, requirements, and tools, you get a team with experience across tax, accounting, audit, and other fields.
  • Focus: Financial management is a necessity for businesses and nonprofits, but it’s not the mission. Outsourcing to virtual accounting firms allows organizations to spend less time on employee management and more time on their mission-critical initiatives.

 

The Insero Difference

Insero & Co. is a premier virtual accounting firm with more than two decades of experience and accountants, consultants, and support staff available to meet the needs of businesses and nonprofits. The firm is large enough to provide the resources clients need, yet small enough to provide relationship-based service built on a foundation of regular communication and personal attention.

Contact us to talk about your current finance and accounting challenges, and how we might be able to help you reduce costs—and headaches—as your organization continues to grow.

Tax Update: April 2019

Trending in Tax

Wayfair, sales tax, and economic presence laws
Economic sales and use tax nexus laws are gaining momentum as states make a direct challenge to traditional physical presence standards.

District Court decision uploads imposition of willful FBAR penalty
Court imposes substantial “willful” penalty for failure to file FBAR where taxpayer fails to consult tax advisor regarding foreign account.

Structuring deals in the era of TCJA and BEPS
Legislation relating to the Base Erosion and Profit Shifting (BEPS) Action Items has resulted in expanded tax due diligence engagements.

Top tax considerations for manufacturers in 2019
Tax planning in an evolving marketplace can be challenging. What are the top tax issues and new rules that manufacturers should focus on?

man point to a printed chart with computer and calendar out

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/tax-digest.html

Disclaimer

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit; and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest federal, state, and international tax news as well as updates pertaining to the Tax Cuts and Jobs Act. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Audit & Accounting Update: April 2019

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest financial reporting insights. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Changes to revenue recognition for federal government contractors
We recently published a white paper to assist federal government contractors in understanding the guidance in ASC 606.

Proposed changes to disclosure requirements for income taxes
If finalized, a recent proposed Accounting Standards Update would modify the current disclosure requirements for income taxes.

ASC 842: Lessee transition
We have published a white paper to assist lessees in identifying and understanding the applicable transition guidance in ASC 842.

Treatment of cumulative dividends on preferred stock
Our article addresses questions often raised regarding how and when cumulative dividends should be recognized on preferred stock.

FASB updates the definition of “collections”
Collection-holding entities should be aware of a change to the definition of “collections” and new required disclosures.

Critical audit matters: PCAOB guidance
The PCAOB recently issued guidance related to the requirement for auditors to communicate critical audit matters.

Amendments to modernize and simplify Regulation S-K
The SEC recently issued amendments to modernize and simplify some of the disclosure requirements in Regulation S-K.

 

patrons at an art gallery as the FASB updates the definition of collections for nonprofits, museums

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/financial-reporting-insights.html

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our service offerings, please contact us directly.

Employee Benefits Update April/May 2019

This issue’s topics include:

Proposed IRS regs liberalize rules for hardship withdrawals

How hard should a hardship be to justify a hardship withdrawal from a 401(k) plan? Proposed IRS regulations could, according to the agency itself, enable eligible plan participants “to access their money more quickly with a minimum of red tape.” This article provides a short summary of several key provisions of the detailed proposed regulations. A sidebar looks at different ways employers might respond to the changes.

Read More

Fiduciary liability
First Circuit shifts burden of defending a fiduciary breach claim

A recent ruling could set the stage for a definitive U.S. Supreme Court opinion regarding retirement plan fiduciaries’ liability on the subject of monitoring plan expenses. The U.S. Court of Appeals for the First Circuit’s ruling in Brotherston v. Putnam Investments shifts a key aspect of the burden of proof of a fiduciary breach from the plaintiff employees to the plan sponsor defendant. This article reviews the case and the court’s decision.

Brotherston v. Putnam Investments, No. 17-1711, October 15, 2018 (First Cir.)

Read More

Have you outgrown the need for matching 401(k) contributions?

Administrating a retirement plan is an evolving process. For example, many plan sponsors provide matching contributions on participant 401(k) plan deferrals without realizing there’s an alternative: making substantial nonelective contributions instead of matching contributions. It’s not a strategy that will work for all employers, but there is nothing to lose — and perhaps much to gain — by at least considering it.

Read More

Take a close look at your plan expense categories

Keeping a sharp eye on your 401(k) plan’s expenses — a fundamental duty of fiduciaries — can require the use of a magnifying glass, at least metaphorically speaking. Take the case of what’s paid out of retirement plan investment funds, as opposed to paid directly by the plan or the company as the plan sponsor. Individual pieces can be measured in basis points (hundredths of one percent), but they add up. This article briefly explains some common contributors to a plan’s gross expense ratio and how even small distinctions can substantially affect participant investment returns over time.

Read More

Compliance alert

This feature lists a few key tax reporting deadlines for April and May.

Read More

 

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our Employee Benefit Plan Services, please feel free to contact me directly.

Want to learn more?

Join our Employee Benefit Plan Resources group on LinkedIn for more frequent updates on recent developments and best practices and discuss related topics with your peers.

Join the Group

LinkedIn button to join Insero's Employee Benefit Plan Resources Group on LinkedIn

Insero Named a Winner of the Rochester Top Workplaces 2019 Award

Insero & Co. CPAs has been named one of Rochester’s 2019 Top Workplaces by The Democrat and Chronicle. The list is based solely on employee feedback gathered through a third-party survey administered by research partner Energage, LLC, a leading provider of technology-based employee engagement tools. The anonymous survey measures several aspects of workplace culture, including alignment, execution and connection, just to name a few.

“Top Workplaces is more than just recognition,” said Doug Claffey, CEO of Energage. “Our research shows organizations that earn the award attract better talent, experience lower turnover, and are better equipped to deliver bottom-line results. Their leaders prioritize and carefully craft a healthy workplace culture that supports employee engagement.”

“We are proud to be a founding winner and look forward to celebrating this honor for the sixth year in a row,” said Nancy Catarisano, Managing Partner.

Our people are our most important asset,” said Kristi Tarantelli, Recruiting and Employee Relations Specialist. “We have chosen to focus on innovation and collaboration to foster the type of environment where people are fulfilled and excited to come to work each day. We owe many thanks to our entire team for upholding this focus and making Insero such a great place to work.”

Insero currently employs 150 professionals in five locations including Rochester, Ithaca, Corning, Cortland and Watkins Glen. The firm has repeatedly been recognized nationally as one of the Best Accounting Firms to Work for by Accounting Today and Best Companies Group and was also named to the inaugural list of Best Places to Work for Millennials.

“Becoming a Top Workplace isn’t something organizations can buy,” Claffey said. “It’s an achievement organizations have worked for and a distinction that gives them a competitive advantage. It’s a big deal.”

Insero's team of accountants at the 2019 Top Workplaces celebration in Rochester, NY

ABOUT INSERO & CO. CPAS

Rochester-based Insero & Co. CPAs is an accounting and business advisory practice with five locations serving New York state. A full-service public accounting firm, Insero provides attest, tax and consulting services to government agencies, colleges and universities, nonprofit organizations and companies ranging from privately held family businesses to multi-national corporations. These clients represent many industries, including service, manufacturing, distribution, high-tech, telecommunications, education, social services and real estate. For more information, visit www.inserocpa.com.

ABOUT ENERGAGE, LLC

Headquartered in Exton, Pa., Energage is a leading provider of technology-based employee engagement tools that help leaders to unlock potential, inspire performance, and achieve amazing results within their organizations. The research partner behind the Top Workplaces program, Energage has surveyed more than 57,000 organizations representing well over 19 million employees in the United States.

Tax Update: March 2019

Trending in Tax

U.S. Supreme Court to hear Kaestner trust tax nexus case
High court to decide whether in-state beneficiary of nonresident trust is sufficient for the Due Process Clause. The U.S. Supreme Court will revisit state tax nexus for the second year in a row after granting North Carolina’s petition for certiorari in North Carolina Department of Revenue v. The Kimberley Rice Kaestner 1992 Family Trust.

Opportunity zone investors can’t forget about local tax incentives
To make opportunity zone projects financially viable, developers need to consider state and local tax credits beyond QOZ incentives. Numerous programs offer developers tax abatements, deferrals and incentives in the same economically distressed areas as QOZs. These extra incentives will make opportunity zone projects more attractive to investors and may bring new capital deeper into the areas that need it most.

New election may provide enhanced interest deduction to multinationals
Special election in new interest regulation may benefit CFCs. The Tax Cuts and Jobs Act (TCJA) enacted a limit on the deductibility of business interest expense (the section 163(j) limitation).

What US companies need to know about Making Tax Digital
US companies with VAT obligations in the United Kingdom should understand and prepare to comply with Making Tax Digital. The transition to Making Tax Digital represents one of the most fundamental changes to the United Kingdom (UK) tax system in a generation.

Supreme Court of the United States to hear Kaestner tax nexus case

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/tax-digest.html

Disclaimer

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit; and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest federal, state, and international tax news as well as updates pertaining to the Tax Cuts and Jobs Act. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.