How to Implement a Board Assessment

Successful nonprofits tend to have healthy, energized boards of directors. Board members don’t just show up—they actively participate in meetings, fundraise, provide thoughtful oversight, and much more.

The challenge for many nonprofits is to build and then maintain a strong and engaged board. One way to do this is by performing a periodic board assessment, which can accomplish a number of important goals:

  • Illustrate (and reiterate) the board’s importance to the organization
  • Define roles and prevent duplication of effort among board members
  • Provide opportunities for self-reflection regarding strengths, weaknesses, etc.
  • Create a baseline for future efforts
  • Help begin essential conversations (about term limits, recruitment, etc.)
  • Provide a format for expressing concerns and raising or revisiting concerns

energized boards of directors meeting discussing a board assessment

How to build a board assessment

If you think your nonprofit would benefit from a board assessment, begin by asking these two fundamental questions, which will drive the framework for your assessment:

  • Why does this nonprofit exist?
  • How can our board help advance our mission?

There is no single template for board assessments. Depending on your needs, you can tailor the format, questions, grading scales, and more. For example, you might want to ask each board member to rate the board on a scale from 1-5 on topics such as performance on core responsibilities, understanding the mission, and succession planning.

Typically, you’ll want to describe each item you ask about, such as what exactly the board’s core responsibilities are. That ensures that every board member is responding based on the same understanding, and it helps to educate board members who may not have a full understanding of every topic.

Another best practice is to leave room for comments, which can add depth and insight to the results. Remember that your goal is not only to gather information from board members but also to encourage them to reflect on their individual and collective performance, which can lead to new ideas and insights, as well as a greater feeling of belonging.

When you collect and compare all of the board assessments, you can identify challenges, strengths, and opportunities, which can be relayed to board members. Using that information, you can then start to outline the topics of conversation in your timeline for governance agendas.

Learn More

Insero & Co. has worked with nonprofits for more than 40 years. Our experienced experts are available to help you with outsource accounting services, audit services, employee benefit plan audits, and other services designed to free you to focus on mission-critical work.

7 Common Small Business Accounting Mistakes

7 Common Small Business Accounting Mistakes

Keeping your company books in order can be tough. It’s hard to find the time to give it the proper attention. When you finally do, understanding the complicated, ever-changing accounting rules can be a challenge. Consider these common accounting mistakes to ensure they do not happen to your business:

  1. Mixing in personal expenses. Having non-business costs included in your financials will harm your business in three ways. First, your financial statements will not accurately portray your business performance. Second, personal expenses are a drag on your available cash. Third, the IRS is quick to deny legitimate business expenses as tax deductions if it perceives that personal expenses are comingled. Common sources of non-business expenses to watch for are credit card charges and expense reimbursements.
  2. Not keeping your books current. Think bookkeeping is frustrating? Try waiting a month or two to enter your transactions. Falling behind has a compounding effect on the time needed to get back on track. Complex entries get even more complicated as your ability to quickly recall transaction details diminishes over time. All the while, your business continues to run and set you back even more. Set a goal to have all transactions entered by the end of every week.
  3. Entering capital assets as expenses. Because capital assets provide long-term value, they are entered on the balance sheet and depreciated over multiple years. Mis­classifying a capital asset as an expense will torpedo your net income for that period. To avoid this, review large purchases and comb expense accounts likely to be hiding capital assets during your month-end review. Remember, while you depreciate these capital assets over many years on your books, special tax treatment allows certain capital assets to be fully deducted on your taxes.
  4. Not performing monthly bank reconciliations. When you receive your monthly bank statements, ensure they are reconciled to your books within a week or two. Bank reconciliations almost always identify errors. Delaying bank reconciliations will add unneeded complexity and decrease your chances of correcting an error.
  5. Mishandling of sales tax. Many businesses book sales tax they receive as revenue. This is not the proper treatment. Sales tax you receive should be entered as a liability until you remit it to the proper tax authority, ultimately avoiding your income statement altogether. Conversely, sales tax you pay on purchases should be booked as an expense.
  6. Lacking proper documentation. Most business owners know that you need to save invoices and receipts for sales and purchases, but what about documentation for adjustments and journal entries? Proving these are just as important. Contracts, time sheets and shipping documents are some examples of substantiation required to support your entries.
  7. Devoting too much of your time. Most entrepreneurs start their business for reasons other than spending hours working on the books. Don’t get bogged down worrying about the inner-workings of accounting rules and tax laws. Partnering with an expert to handle your bookkeeping needs can free you up to use your expertise where it’s needed the most — running and growing your business.

Contact us today to discuss your business bookkeeping needs or to schedule an appointment.

calculator to keep company books in order

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.

Line of credit: what you should know

Line of credit: what you should know

A bank line of credit is similar in function to a credit card. It provides a reliable source of cash for potential short-term business needs. If you’re considering a bank line of credit, here’s what you should know:

How it works

With a line of credit, you make draws against your credit line from time to time as you need cash. You pay interest only on the amount of the outstanding loan balance. You are expected to make payments and occasionally bring your outstanding balance to zero.

Example: Assume you have a $100,000 line of credit. You are not obligated to draw any of it at any given time, and you will pay no interest until you actually make a draw (much like a credit card).

Now assume that you must build up your inventory for the holiday shopping season and need $30,000 to do so. After your inventory purchase, you still have $70,000 of your credit line available; you are only paying interest on the $30,000 you used. You may have several occasions during the year to borrow on your line of credit. Since your line of credit is intended for short-term cash needs, your banker expects your balance to be paid down as your cash flow improves.

business chart for line of credit

Use your credit wisely

Do not use a line of credit for capital purchases. If you need to expand your building or buy new equipment, arrange a term loan for that specific acquisition. This allows your creditor to use the new equipment to secure the loan and it keeps your line of credit free for short-term needs.

While a line of credit may have a low interest rate, most don’t have a fixed rate. The rate can change depending on the market at the time that you borrow, plus how much you borrow. You may end up paying a much higher interest rate if you already used your line of credit and need to borrow more money to cover another shortage.

Qualifying for a line of credit

If your business has at least two years of making a profit, you may qualify for a line of credit. Start by checking with your current bank. Your banker would like to keep your business, and if your financial statements support it, you will most likely be offered the line of credit. Depending on the size of the line of credit, be prepared to put up your business and personal assets as collateral. The bank may even request a co-signer on the note.

Most banks are willing to make loans to businesses that have uneven income cycles, but you may want to shop around for the best loan terms. Some banks may already have several customers in your industry and do not want more (a potential bank examiner’s concern). Accordingly, their terms may be less favorable than some other bank or credit union.

Contact us today if you would like assistance in preparing a request for a line of credit.

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.


Is It Time to Automate Your Accounts Payable?

Is It Time to Automate Your Accounts Payable?

Doing the work is only step one. Step two is getting paid and paying others—the vendors, contractors, and others your organization depends upon. And it’s step two, the accounts payable process, that presents both challenges and opportunities for businesses and nonprofits.


You probably experience the challenges every month. Bills stack up. Invoices are in various stages of the approval process. Checks are … Where are the checks again? Being printed, waiting to be signed, in the mail? These details and many more need to be recorded, without a single error, over and over again.


And therein lies the opportunity. If you can find a faster, more accurate way to handle accounts payable, you can devote more staff time to more valuable projects. Plus, you can build your organization’s reputation and keep vendors and contractors happy. That’s the opportunity available when you switch to an automated accounts payable solution.

Automate Your Accounts Payable

Is Automation for You?

Small businesses might not need to switch to an automated accounts payable solution—at least not yet. But if your business is growing, or you expect it to soon, automation is likely to be a smart investment, so you can stay ahead of increased workloads.


Other signs to look for that will indicate you should seriously consider an automated solution include:

  • Missing payment deadlines
  • Making data entry errors
  • Struggling to get payment approvals
  • Losing track of bills or constantly swimming under a stack of them
  • Hiring new accountants who prefer or are accustomed to automated solutions


The Advantages of Automation

A variety of automated solutions are available, the best known of which is probably With these automated systems, you no longer have to manually perform every step of the accounts payable process, from processing and routing bills to getting approval and recording transactions.


Instead, you simply create bills, enter them into the system—often a cloud-based payment platform—and move on to other tasks since the payments are sent automatically. If bills require approval, you enter approvers into your account, and they’re automatically notified when they need to review a payment, which they can do in seconds.


You’ll want to make sure that whichever automated accounts payable solution you choose, from QuickBooks to Sage Intacct, will sync with your accounting software. That way, you can ensure that your accounting books are always fully up to date.


Need Advice or Support?

Whether you want advice on switching to an automated accounts payable solution or are considering outsourcing some or all of your accounting functions, Insero & Co. can help. Our financial professionals have decades of experience working with nonprofits and businesses and are available to help you find smart, efficient solutions to your accounting challenges.

Make Meetings Worth Everyone’s Time

Make meetings worth everyone’s time

For most companies, business meetings are a fact of life. Although meetings are generally meant to be useful and necessary, too many of them simply waste time. Some may even harm morale. Luckily, you can change that.


Here are a few ideas for making business meetings truly worth the time:
  • Use other forms of communication whenever possible. Most meetings are held to disseminate information. The participants are informed or reminded about policies, given progress reports about ongoing activities, or told of upcoming events. However, unless you’re soliciting input or anticipating confusion about the subject matter, consider substituting emails or other memoranda to communicate routine information. That way, you’ll be providing written guidelines while saving everyone’s time.
  • Skip unneeded meetings. Don’t hold a meeting solely because it’s part of the usual schedule (e.g., the weekly staff meeting). Once again, if the topic of the week can be conveyed in a memo, or there’s nothing important to discuss, simply cancel. If you do hold a meeting but exhaust your topic early, adjourn rather than trying to fill the allotted time.
  • Prepare your meeting participants. If your meeting objective is to generate ideas or consensus, you can kickstart the creative process by distributing an agenda with guidelines a few days beforehand. Letting the participants mull over the topics in advance can maximize productivity and minimize orientation time. Encourage a diversity of opinions and positions, but be prepared to tactfully deflect digression or showboating.
  • Summarize the meeting results. At the end of any meeting, briefly sum up the proceedings, clarify actions to be taken, and identify who is responsible for assigned tasks. An important goal is to make your participants feel they are a vital part of company processes.

Once you begin integrating these ideas into your business’s meeting culture, you’ll likely find that meetings will become more efficient and effective — and employees will be thankful.

two women meeting, communicating with business work

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.

4 Ways to Control Seasonality Problems

4 ways to control seasonality problems

The No. 1 cause of business failure is poor cash flow management. Cash Flow Corner gives you tips to help you master this business fundamental.

Large swings in revenue throughout the year brought on by holiday shopping, weather and other annual events can make it exceptionally difficult for seasonal businesses to plan and sustain a positive cash flow.

business data in charts to effectively manage seasonality cash flow changes

The following tips can help seasonal businesses cope with downturns and effectively manage cash flow throughout the year:

  • When times are good, get a line of credit. The best time to set up a line of credit is when you don’t need it. Not only will you have the extra time it may take to secure a loan from a bank, you’ll also gain peace of mind knowing that it’ll be there when you need it.
  • Leverage your supplier relationships. The goodwill you build up with your suppliers will likely make them more inclined to help you out with alternative terms that keep cash in your pocket during low sales periods. For instance, your suppliers may agree to hold a portion of your inventory and accept payments upon release, instead of requiring upfront payment for the entire lot. Long-term suppliers will help as they know your business and that you will not be ordering from a competitor. You benefit by aligning your supplier payments closer to when you will be selling the product.
  • Create a labor strategy that optimizes your cash flow. Consider giving your employees time off during low seasons and incentivizing them by offering higher pay during peak seasons. You may also minimize your need to hire extra staff or pay overtime during peak season if you’re able to shift some of that work into the downtime months when your employees are light on tasks.
  • Partner with your customers. Your customers can help you maintain a steady cash flow throughout the year if you give them the right opportunities to do so. Incentivize them to make purchases during your low season by offering worthwhile discounts that expire before the peak season.

Contact us for a review of your company’s cash flow management plan.

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.


Do You Have the Right People on Your Financial Team?

The Costs of Building an Internal Financial Team

If you have a financial team in place that possesses all the expertise and experience your business or nonprofit requires, count yourself lucky. Many organizations find it increasingly difficult to find, train, and retain employees who can provide all the needed services at a high level of excellence for years on end.


The eternal search for that perfect fit can be costly, as demonstrated by the following three challenges of building an internal team.

Man pointing

Do They Know Your Industry?

Every organization has specific financial requirements that vary in sometimes obvious and other times more nuanced ways. Finding financial team members who understand the ins and outs of your industry can be difficult—and if they lack that knowledge, they could make mistakes or overlook new options or changing requirements, which could cost your organization in lost hours or fines.


Do They Have the Right Skills and Experience?

Accounting and financial management require a variety of technical skills, including expertise on the specific types of software you use. Employees also need to have both deep and broad experience in their specific field—years or preferably decades of experience.


If your employees lack adequate skills and experience, that means a lot of training and management time for you, which increases your operational costs. On the other hand, hiring—and keeping—top-end accounting staff typically requires paying them high salaries.


Will They Stay?

Every time an employee takes substantial time off or moves on to another job, you have to go back to the beginning—back to hiring and training another newcomer, which is a costly and time-consuming process. In addition, employees sometimes take critical knowledge with them, leaving you in a scramble to figure out how to plug the gaps they’ve left behind.


Time to Outsource?

If you have encountered these and other challenges in building your internal financial team, it might be time to consider outsourcing some or all of your accounting and financial management needs.


Insero & Co. has decades of experience working with hundreds of nonprofits and businesses, providing each with a dedicated team of experts who offer the service you’d expect of an internal team, combined with the cost-efficiency you can only get with an outsourced provider. Contact us today to talk about our outsource accounting and financial services and how they might be able to help you redeploy your internal staff to focus on more mission-critical work.

What Board Members Need to Know About Financials

What Nonprofit Board Members Need to Know About Financials

As a board member, you’re expected to use your skills and experience to help the organization achieve its goals. For nonprofits, that usually involves raising money. For any organization, it likely means providing management and oversight, assisting in specific areas of operation, and helping the organization through transition periods.


A key piece of all these endeavors is understanding the organization’s financial position. Without timely financial information, it’s simply not possible to monitor progress or make informed decisions about the future of the organization, not to mention the fiduciary responsibility of every board member.

women at computer working on charts

The Numbers Board Members Need

Each year, every nonprofit board member should receive IRS Form 990, which provides broad information about the organization’s mission, programs, revenue sources, and more. Form 990 is only the beginning, however, as board members also need monthly or quarterly updates on the organization’s financial information, typically provided in the