Get The Run Down On Outsourcing Your Nonprofit Bookkeeping
If you are new to the nonprofit world, understanding the similarities and differences of this environment compared to the for-profit world is crucial to the success of your business. We can help your organization effectively handle its nonprofit bookkeeping and let you focus on your nonprofit’s mission.
Nonprofit organizations have a unique set of financial requirements and their own accounting language to abide by that you must understand. Donors replace customers and instead of vendors, you have volunteer hours. The business focus is always on the financial records rather than the focus on sales as you may be used to in an e-commerce world. Nonprofits must demonstrate their charitable purpose through the appropriate use of its resources and assets. Everything must be accounted for at all times.
In the nonprofit arena, the organizational leaders dedicate their time generating revenues and serving their mission. Let us focus on the nonprofit accounting and bookkeeping. Let’s go over three big reasons why businesses are leaning towards outsourcing their bookkeeping needs.
1. Eliminate The Burden On Your In-House Staff:
First and foremost, a typical nonprofit organization operates under incredibly tight budgets, has fewer employees then a for-profit organization and often tasks that should take precedence are added to the workload to someone that just does not have the time for that quality dedication.
Bookkeeping cannot be one of those tasks that is overlooked. It can be a time-consuming process which makes it the ideal role to outsource to better divide and conquer and keep the focus on the mission-focused details, like obtaining more donors and improving program development and delivery. All these things work harmoniously when the financial position is better in the organization.
2. Save Money With Less Labor Costs:
As your Nonprofit organization grows, likely your bookkeeping responsibilities grow. The cost of hiring a part-time or full-time bookkeeper becomes inevitable when this happens, often incurring a cost that is not in line with your nonprofit budget.
Avoid increases to administration payroll, hardware/software and training budgets. In addition to hourly wage or salary, you could be looking at other costs in hiring, training, managing, and retaining the employee, not to mention employee benefits to add into your budget for this additional staff you will need.
Outsourcing a nonprofit bookkeeping service removes the guesswork involved with determining this new hire’s annual expenses. As you more than likely know, nonprofit organizations work with very limited and sometimes unpredictable budgets. Getting a plan and keeping consistent spending is very important to a nonprofit’s survival and success.
Nonprofits that outsource their bookkeeping typically experience an overall reduction in costs rather than in-house employees which can result in cost savings across the board. This will allow your organization to hire more staff to keep the focus towards the mission of the nonprofit.
Although likely your nonprofit is tax-exempt, the need to file tax returns each year for the IRS is still required. And, ironically, filing a tax return for nonprofits is one of the most complicated returns due to the rules around reporting revenue and expenses for these 501C3 organizations.
Revenue can come from many different areas within your nonprofit depending on the type of nonprofit you have. The money entering the organization needs to be reflected appropriately on the organization’s tax forms. Outsourced bookkeeping can provide the resources, knowledge, and experience required to handle all varying circumstances while keeping up with the continually changing tax requirements and codes.
In closing, outsourcing your bookkeeping is optimal to the success of your nonprofit. Focus on what you do best and let us focus on what we do best!
Make well-informed Nonprofit decisions.
We work to understand your end objective and align our solutions accordingly, creating strategies that help you make the best decisions.
Make sure your financial information is reliable.
We have created a robust financial system that ensures your information is reliable and accurate.
Proactively navigate your Nonprofit’s growth.
Get ahead of poorly managed cash flow and a lackluster professional financial plan with expert financial strategies and management.
Focus on the future of your Nonprofit.
Whether it’s investor funding or an exit strategy, our outsourced CFO consultants will use their industry expertise for your nonprofit.
Powerful Insights. Personalized Strategies.
We believe every nonprofit needs a financial partner.
We work with you to grow your nonprofit and leverage every strategic opportunity to reach your highest potential. Working with financials isn’t just a business role, it’s a strategic move.
Our CFOs work with nonprofits to fill in the gap between cost-effectiveness and quality support for financial growth.
Join hundreds of Nonprofits who trust District Advisory as their financial partner.
See what running a business is like with District Advisory on your side. Schedule a 15 minute discovery call with one of our experts to see how we can help you reach the full potential of your Nonprofit.