More Nonprofit Accounting Best Practices

3 More Accounting Best Practices for Nonprofits

In a previous article, we discussed three accounting best practices designed to help nonprofits reduce risks and stay focused on their mission. Here, we build on those tips to show how organizations can improve in three critical areas: regulations, budgeting, and fundraising.

 

Best practice #1: Keep track of the latest nonprofit regulations

As we mentioned in our earlier article, nonprofits face different accounting challenges than for-profit enterprises. That includes different tax and accounting regulations, including GAAP and IRS requirements.

 

As you know, GAAP, or Generally Accepted Accounting Principles, are guidelines every accounting professional has to follow. GAAP rules change in sometimes complex ways, so you have to stay abreast of how those changes affect your organization. IRS requirements for nonprofits likewise change and require constant monitoring.

 

Whatever regulatory changes come next, it’s essential to have flexible ERP software in place. For example, Sage Intacct, the best-in-class cloud-based accounting software solution, provides reporting flexibility and configurability to let you adapt to new requirements in minutes instead of days or weeks. You can update your reporting format simply by editing your existing reports and pointing and clicking to insert the new columns, rows, and subtotals.

 

Best practice #2: Create realistic budgets with better forecasting 

If you’re still creating spreadsheet-based budget forecasts, there is a better way. Imagine being able to model calculations such as projected cash flow, revenue recognition options, or headcount expenses without the errors common to spreadsheets. Plus, no more hidden formulas, broken links, or version-control issues!

 

With more advanced software solutions like Sage Intacct, you can create multiple what-if scenarios and easily discuss them across teams—all within one secure solution. More accurate forecasts lead to more refined budgets that identify both challenges and opportunities.

 

Best practice #3: Set realistic fundraising plans

Set overly ambitious fundraising goals, and your development team will inevitably fall short. But if your goals are too low, your team won’t be pushed. Again, the key is to have the right accounting software in place, which will give you quick access to detailed grant, fund, project, and donor data.

 

Look for integrated software solutions that automatically sync your financial and donor information. Then use that data to create realistic fundraising goals, and a plan to reach them. If circumstances change during the year, you can update the fundraising plan accordingly—the right software will make it easy.

 

Learn more

Insero & Co. is a public accounting firm with decades of experience working with nonprofit organizations. Our experts are available to help you identify the best practices that can help your organization achieve your mission.

 

3 More Accounting Best Practices for Nonprofits

Nonprofit Accounting Best Practices

Reduce Risk with 3 Accounting Best Practices for Nonprofits

Nonprofits want to focus on their mission, but that can be difficult to do when you’re constantly battling issues related to security, privacy, fraud, compliance, ethics, and more. These three accounting best practices can help you rein in risks and spend more time devoted to tasks that can help you achieve your goals and move the organization forward.

 

Best practice #1: Use accounting software designed for nonprofits

Nonprofits face different accounting challenges than for-profit enterprises, so it only makes sense to use accounting software designed to address those challenges. Look for software that’s used by nonprofits nationwide and that includes features like custom dashboards that allow you to track volunteer hours, grants, and other nonprofit-specific concerns.

 

Sage Intacct, the best-in-class cloud-based accounting software solution, is one such solution that can help you make everyday processes—budgeting, forecasting, grant management, fundraising, and HR management—more efficient. The software’s multidimensional database lets you aggregate transactions and activities across multiple grants, donors, locations, and more, so you can close faster and use real-time analytics to support better decision-making.

 

As an example of a nonprofit-specific solution, Sage Intacct and GuideStar have created a GuideStar nonprofit financial board book that delivers real-time visibility into several key facets of nonprofit operations. With real-time balance sheets, expense data, and revenue pulled directly from Sage Intacct, you can easily view financial health, mission impact, and sustainability.

 

Best practice #2: Implement internal policies and a code of ethics

Preventing fraud is absolutely essential, but doing so can be challenging. First, make sure you create internal policies and controls that are thorough and updated on a regular basis. Then implement a code of ethics to show your donors, employees, and board of directors the values of your organization.

 

Of course, creating policies and codes is only effective if they’re followed. Look for ways to involve employees, the board, and others in the creation of policies so they feel connected to them. Provide follow-up training to ensure the rules are followed and to answer any questions as they come up. And make sure that leadership sets the example and shows not only adherence to policies but an ongoing commitment to making them central to your organization.

 

Best practice #3: Spread financial practices across personnel

Another way to reduce the risk of fraud is to assign financial tasks to different employees across the organization. Results should remain the same. If they do not—if there are discrepancies, errors, or delays—then you can troubleshoot and determine what type of error is taking place and how to address it.

 

Spreading financial tasks to multiple employees also ensures that more than one employee knows how to complete each task. That’s a big help if employee turnover takes place. In the worst-case scenario where fraud is taking place, it also gives you a better chance of identifying it early so you can take corrective action.

 

Learn more

Insero & Co. is a public accounting firm with decades of experience working with nonprofit organizations. Our experts are available to help you identify the best practices that can help your organization reduce risk, streamline operations, and achieve your mission.

Nonprofit Accounting Best Practices

Big Data for Small Businesses

Think big data is only for big businesses? Think again. With the right financial management tools, small businesses can take advantage of big data to streamline operations, forecast more accurately, and increase revenue.

 

What you can do with big data

“Big data” has been a popular term for a while now. It describes the growing volume of data that’s available to organizations every day. The challenge every business—large and small—faces is that it can be difficult to identify all the different types of information located in different systems and then quickly sort through the data, analyze it, and visualize it.

 

The reason big data, and particularly financial data, is so valuable to businesses is that you can use it to optimize nearly every aspect of your business. For instance, big data can help you:

  • Track progress toward both near-term and long-term performance goals
  • Make fast, accurate revenue projections
  • View invoicing, payroll, and other accounting tasks in an instant for every department
  • Quickly identify and act on project overruns, net profit margins, and other growth KPIs
  • Share clear and detailed budgets, reports, and key financials with executives

 

Big data advantages of Sage Intacct

With Sage Intacct, the best-in-class cloud-based accounting software solution, small businesses can access the same big data advantages that large corporations currently enjoy. Sage Intacct enables you to view all your core financials, from general ledger to order management to cash flow, in an easy-to-read, fully customizable dashboard that’s accessible anytime, anywhere from desktop or mobile devices.

 

Sage Intacct is easy to integrate with your key accounting and back-office functions, so you can automatically pull data from multiple systems across your business. That reduces the workload for your internal personnel and ensures that executives and managers can view all the real-time performance metrics and projections they need to make the right strategic decisions for the business.

 

Because it’s a subscription-based service, Sage Intacct will also help your business reduce CapEx costs, and it can lead to lower IT infrastructure management costs. At the same time, you’re reducing expenditures, you gain access to all the latest tools to take full advantage of big data, now and into the future.

 

Find out how you can use big data

Insero & Co. is a public accounting firm with decades of experience working with small and large businesses. Our experts are available to help you identify the best ways to use big data to streamline your operations, compete more effectively, and grow your business.

 

Big Data for Small Businesses

Audit & Accounting Update: January 2020

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.

Accounting

Business combinations: Allocation of amounts to foreign subsidiaries
Our article discusses the allocation of goodwill and related intangible assets to foreign subsidiaries in a business combination.

Updated whitepaper: Revenue recognition in the technology industry
We have issued an updated version of our white paper to further assist entities in the technology industry in applying ASC 606, Revenue from Contracts with Customers.

Evaluation of the realizability of a Section 163(j) carryforward
Recent AICPA guidance addresses evaluation of the realizability of deferred tax assets related to disallowed interest deductions.

FASB issues standard to simplify the accounting for income taxes
A recent FASB Accounting Standards Update simplifies certain aspects of the accounting for income taxes under ASC 740.

 

person on computer with notes

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.

Use Data to Boost Donor Retention

Boost Donor Retention with Better Data

Improving donor retention is at or near the top of every nonprofit CEO’s to-do list. The eternal question is how to build better relationships with donors so they feel more connected to the organization and keep coming back to donate and support your cause for years and years.

 

One often-overlooked way to boost your donor retention rates is with data. Specifically, there are many ways to collect more data and use it more effectively to understand your donors’ needs and desires and to communicate more effectively with them.

 

Organize your data

If your employees are juggling a dozen spreadsheets and struggling to organize and streamline their fundraising and communication efforts, you’re going to have difficulties with donor retention.

 

A cloud-based accounting software solutions like Sage Intacct can help you streamline not only your donor accounting but also your grant, funding, and project accounting. Sage Intacct also integrates easily with third-party fundraising software, so you can automatically sync financial and donor information. The result is a more unified, organized system that can then support a more organized approach to donor retention.

 

Survey your donors

If you’re not sure how best to serve your donors’ needs, it’s a good idea to gather more data. Donor surveys are the fastest, most direct way to learn what donors want—and online donor survey platforms now make it easier than ever to reach donors online. Consider options like these:

  • Perform a yearly survey of all donors
  • Add a survey page to your donor confirmation emails
  • Create multiple versions of surveys for different donor subsections

 

Improve your data hygiene

Take a close look at your donor database software. Is it integrated with the rest of your software? How often are duplicate and outdated entries updated? How sure are you that you’re reaching all of your current donors?

 

Look for efficient ways to keep donor information updated in your database. For instance, if you send out surveys, ask respondents for their current contact information and household information, so you can update any outdated entries.

 

Put data to work for you

Insero & Co. is a public accounting firm with decades of experience working with both nonprofits and businesses. Our experts provide CFO consulting, software implementation, and other services that can help you improve your donor retention rates.

 

Boost Donor Retention with Better Data

Write a Great Press Release

Getting the word out in a way that works!

Something exciting is happening at your company – a grand opening, a new location, the introduction of a new product – and you want to tell the world about it. But you’re a small company with a limited budget. You don’t have the luxury of a PR department, so you sit down to compose the press release yourself.

One thing’s for sure: your target audience will be busy. They may glance at the headline; they may even read the first paragraph. If the press release is especially compelling and they’re in the market for your particular products or services, they may continue to read. But don’t count on it.

How do you write a press release that grabs and keeps a reader’s attention? Here are four tips:

  1. Use a strong headline. Limit your headline to twenty words or less and put the most important information up front. Scan well-written publications like The New York Times or Wall Street Journal and you’ll find headlines with active words that boldly proclaim the gist of the story: “Record Rains Cause Major Flooding” or “Police Chief Gets New Term.” Follow their example. Keep it short.
  2. Keep it brief. Try to keep your press release to one page, two at the most. Anything longer runs the risk of reader fatigue. Busy reporters, editors, and readers aren’t interested in a dissertation. As Detective Joe Friday used to say, “Just the facts, ma’am.” The first paragraph should follow the journalist’s guideline of answering five basic questions: who, what, when, where, and why.
  3. Keep it focused. If you want to discuss both a new product and a new location, consider sending two press releases. Don’t dilute your message. The article should be centered on a single newsworthy topic. Include key words and phrases, and repeat them throughout the article. Assume that your press release will be published over the Internet, so make it easy for search engines – and your readers – to find and share your story. To add interest, consider including brief and relevant quotations from industry leaders, company executives, employees, and customers.
  4. Proof. Proof. Proof. Pay attention to detail. Check for grammatical errors. Give the article to others who can review it for typos and misspellings. There are plenty of free online tools that will grade your writing. Use them. Follow standard formatting – no fancy fonts or pretty colors. Does the press release read like a story with a beginning, middle and end? If not, break up content into easy-to-digest sections. And make sure your company’s contact information is clearly displayed.

Remember, a great press release focuses on telling the reader something interesting. Often less is more.

As always, should you have any questions or concerns regarding your tax situation please feel free to contact us.

 

woman writing

 

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

Cyber Security Starts with Your Employees

Action items to help protect your business

When identity thieves trick employees, businesses pay a steep price. Consider the case of the Oregon Department of Human Resources. In January 2019, the personal information of over 645,000 applicants was exposed to hackers. Why? Nine employees were conned into clicking on phishing emails.

The results can be catastrophic. Workers spend months cleaning up the mess. Companies face penalties, fines, and lawsuits. Customers and business partners lose confidence in your company’s ability to manage data. A company’s brand and reputation take a hit, creating a perfect storm for competitors to take full advantage of your problem.

Don’t become a statistic. Train your employees to be vigilant about the following identity theft schemes.

Phishing Emails

Here’s the scenario. An employee receives an email or text message purporting to come from company management or a trusted vendor. He or she is duped into opening the message and clicking on a malicious link. When the victim lands on a bogus page requesting both new and existing passwords, the attacker hijacks the original password to gain access to the network.

Action items. Beat this problem by training employees to recognize phishing schemes. Look for subtle mistakes such as spelling errors and domain name anomalies. Teach employees to hover their mouse over links to ensure they are legitimate. Above all, staff should routinely ask, “Why am I receiving this email?” A simple verification may be all that’s needed to stop a phishing attempt.

Ransomware

Ransomware is malicious software that infects a computer, locks it and then demands a ransom. In effect, the system’s critical data is held hostage until fees are paid. Like phishing, ransomware relies on victims to download pernicious software.

Action items. Train employees to confirm that senders are, in fact, trusted contacts. Teach them to avoid clicking on links from questionable sources. They should be particularly skeptical if an attachment asks them to enable macros, which is a common way ransomware is spread. Your best defense to ransomware is active, secure backups of all systems.

Social Media

Cyber-crooks use social media to gather enough information to appear legitimate to company employees. After all, if a worker receives an email from a well-known vendor who asks about his recent trip to Florida, the message must be legitimate. Right? Not necessarily.

Action items. Train employees to protect both themselves (and your business) when sharing on social media. Create a policy that limits the sharing of sensitive information on social media.

Internet Access

With the increase of telecommuting, data security risks continue to grow. Workers who access company networks from coffee shops, airports, or other unsecured access points may allow identity thieves to exploit vulnerabilities. In addition, with the expense of cellphone data, employees will be tempted to use your company wi-fi for personal use.

Action items. Limit personal access to your company wi-fi. Explore creating separate access for employee use during the day. Develop VPN protocols for remote workers, this limits access to your network. Require strong password, encryption, time-out locking and theft protocols within written policies. Prohibit access to your network using public wi-fi. Hire or create an accountable person to constantly monitor company security.

Company security is now a complex but critical success factor for all small businesses. Take it seriously by hiring experts and constantly training your employees to be vigilant.

 

security

 

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

Modernize Your Month-End Close

Why and How to Modernize Your Month-End Close

The month-end close is the accounting version of deep-cleaning the kitchen—necessary, yes, but also dreaded because it’s tedious and takes time that we’d much rather spend somewhere (anywhere) else.

 

The thing is, it doesn’t have to be that way. Month-end closes can take less time and be less fraught with concern over errors and oversights if you modernize with industry-leading financial management software.

 

Invest in the right software

Month-end closes can take up nearly the whole month if organizations use disparate accounting systems and rely on in-person handoffs. Investing in a fully integrated, cloud-based accounting software solution like Sage Intacct can streamline the process and save you hours of time every month.

 

Sage Intacct eliminates the need for manual data entry, external spreadsheets, time-wasting handoffs, and other steps that can slow down financial reporting. With integrated financial software delivering data in real time to online dashboards, it’s easy to monitor and react to issues as they come up, relieving some of the pressure on those month-end financial reports. Talk to one of our experts to help find the best solution for your organization.

 

See the results

Let’s look at what a difference Sage Intacct made to one nonprofit organization: MHA, an Association of Montana Health Care Providers. MHA used to rely on Microsoft Dynamics SL as its ERP system, but as the organization grew, the finance director found that they “wasted a week every month just managing inter-company transactions and balances.”

 

Since implementing Sage Intacct, MHA has been able to streamline accounts payable, accounts receivable, and general ledger entries. In addition, by automating consolidations and eliminating the need to manually enter hundreds of inter-company transactions every month, Sage Intacct has shaved days off MHA’s monthly close process.

 

MHA has found that a further advantage of Sage Intacct is its easy integration with other software solutions for payroll, budgeting, asset management, and more. Those integrations help MHA’s finance team save even more hours that they used to spend on manually re-entering data every month.

 

Modernize your close

Insero & Co. is a public accounting firm with decades of experience working with both nonprofits and businesses. From audit assistance to business consulting, our experts can help you find smart ways to modernize your accounting processes to be more efficient and productive.

 

How to Modernize Your Month-End Close

Increase Cash Flow in Partnership with Suppliers

Suppliers can be a better source of cash than a bank!

Employee salaries, utility bills, taxes, payments to suppliers—these and myriad other transactions cause cash to flow out of your company. If your company isn’t keeping pace with these bills as they come due, you’re headed for trouble. Too often, suppliers help manage your cash only when you cannot pay them. Why not use them to help manage it? Here are some ideas to help slow down cash outflow with your suppliers.

  • Treat them as partners. It’s crucial to maintain positive relationships with companies that supply your raw materials, provide ancillary services, and otherwise keep revenues flowing. First identify your key suppliers. Then meet with them periodically to know how they are doing and create a relationship based on trust. If you are forecasting tight cash periods, let them know. If you need to pay late, proactively call them BEFORE the bill is due and let them know when you will be sending payment. Whatever you do, deliver on your promise.
  • Extend terms. Some invoices are due on receipt; others, a few days later. Negotiate the longest payback terms possible and ask for early-payment discounts. A two percent discount might not seem significant, but on bulk orders savings can accumulate. Depending on your industry, you might set up a vendor payment schedule that better reflects your accounts receivable history. For example, if you print catalogs, get a price quote with 120 day terms from your printer. The extended terms allow you to mail the catalog and receive orders to help pay the bill. The supplier can quote their price with the cost of the extended term built into their bill.
  • Simplify. Set up automatic payments from your company bank account. You won’t have to remember when a bill is due and the money will stay in your account as long as possible. Electronic fund transfers doesn’t eliminate the need to monitor cash flow or scrutinize payment terms, but they can reduce some of the headaches associated with paying bills on time. You might also consider moving from invoice payments to monthly statements. This allows you to reduce the processing work and make one payment per month.
  • Prioritize. Develop a priority payment list. Although everyone needs to be paid eventually, some vendors are more crucial to your success. They’re the ones you rely on to keep shelves stocked and customers coming back. Pay them first.
  • Release management. The principal here is to pay for inventory when you have a sale and not before. This helps match the cash outflow of the supplier payment with selling the product. One way to do this is to implement just in time (JIT) delivery, where you place the order with the supplier and they then deliver or ship it. Another way to do this is to provide a blanket purchase order to lock in lower pricing, but take delivery of the product over time. Then you pay for inventory when it is delivered versus when it is produced.

If managed correctly, your key suppliers can be an essential key to your business’ success.

 

Shaking hands

 

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

Accounting Trends for 2020 and Beyond

3 Accounting Trends for 2020 and Beyond

One thing you can be sure of: Accounting in the next decade will look a lot different than it does right now.

 

Emerging trends based on digital technologies, tools, and solutions will change how you do business in 2020 and beyond. It’s critical to keep an eye on what’s new, so you know which trends are worth adopting, which ones aren’t right for your business, and when to make updates that could make your business more efficient, productive, and competitive in the new decade.

 

Trend #1: More automation of more accounting processes

No doubt you’ve already automated some of your accounting practices, but expect to see more tools and technologies coming on the market to help you automate even more processes, and to do so with less difficulty than in years past.

 

At the cutting edge of accounting automation is robotic process automation (RPA), a system that manages all the transactional data flowing from IT systems and applications. We’ll be hearing more about RPA in the years to come, but in the more immediate term, take a look at cloud-based accounting software solutions like Sage Intacct that make it easy to automate basic functions like invoicing, accounts payable, and reporting.

 

Trend #2: Deeper insights with artificial intelligence

The rise of artificial intelligence (AI), which allows computers to make predictions and “learn” over time how to adapt to changing situations, is another trend worth following. You’re not going to go out and buy “AI,” but you will find more and more opportunities to implement software solutions that incorporate AI to perform certain functions.

 

For most firms, the advantages of implementing AI-based solutions are similar to the advantages of automation: greater productivity and efficiency. Look for AI-based financial solutions in 2020 and beyond that can help you streamline data entry and data analysis projects—that’s low-hanging fruit. Also, keep an eye out for AI-based software that can scan financial data and report anomalies far faster than can be done by people or traditional software.

 

Trend #3: Breakthroughs in blockchain

We’re still at the “What the heck is blockchain?” stage right now, but expect to see blockchain emerging in the years ahead as a significant force in accounting and financial management.

 

Basically, blockchain creates a single ledger that allows users to access identical information in real time; when changes are made, everyone sees them. It thus has the potential to reduce the cost of maintaining and reconciling ledgers, and it could provide certainty as to the ownership and history of assets.

 

By eliminating reconciliations and providing certainty about transaction history, blockchain could also streamline audits, and free up employees to focus on planning and valuation instead of recordkeeping.

 

Prepare for your future

Insero & Co. is a public accounting firm with decades of experience providing outsourced and co-sourced accounting services to businesses throughout New York State. From software implementation to business consulting, our experts are available to help you understand the latest trends that could help your organization be more efficient and productive.

 

 

Accounting Trends for 2020 and Beyond