NFP Partners offers the benefits of experienced accounting professionals at a fraction of the in-house cost. Our outsourced accounting services range from total operation and management of the finance function to higher-level CFO support.
Managing your accounting department does not have to be a struggle that keeps your organization’s leadership awake at night and distracts from the main mission. Consider outsourcing some, or all, of your accounting functions to achieve strong financial management and enjoy peace of mind.
Find out how our outsourced accounting services can help your nonprofit organization and get your questions answered by exploring the topics below:
Are You a Good Candidate For Outsourced Accounting Services?
The fact that you are on this page probably pre-qualifies you as a candidate for outsourced accounting services. You may have overt evidence that your organization’s financial management is deficient, such as a critical audit report, the recent termination of your primary financial manager, or lost funding. On the contrary, you may be absent any immediate crisis and instead just have this intuitive sense that things are amiss and are not sure what to do about it.
Some of the general characteristics of nonprofit organizations are conducive to using outsourced accounting services as the primary strategy are:
- Some organizations, which are constrained by choice or circumstances, do not grow beyond a level where a full-time finance staff is required.
- The CEO and the Board want to control administrative overhead costs, but at the same time, understanding their fiscal responsibilities and risks, want to follow best practices and set a high standard for financial reporting.
- An organization is in the early growing stage with an operating budget of $500,000 to $4,000,000.
- The financial tracking and reporting requirements are at least moderately complex and require specialized nonprofit accounting expertise and software tools that otherwise may not be readily available or affordable.
- The organization requires an
audit orexpects to fairly soon.
- Management is focused on the mission, programs, and fundraising, leaving little time for attention to finance and accounting functions.
- Management is attuned to modern workplace practices that are facilitated by technology.
Why You Should Be Interested In Outsourced Nonprofit Accounting Services?
Nonprofit organizations in every growth phase – from startup to maturity – can benefit from expert outsourced accounting assistance. A CEO or executive director is generally focused on the organization’s mission, programs, and fundraising. Thus, managing in-house accounting, especially during the early and middle growth phases, often leads to weak financial management. This condition, unfortunately, characterizes too many nonprofit organizations. In spite of your efforts, here are a few of the reasons why your nonprofit’s financial management is dysfunctional:
- Your organization needs, at various times, multiple financial skills but can’t afford to hire a financial staff on a full-time basis.
- The organization may experience high turnover in finance and accounting positions resulting in an ongoing, on-the-job training program.
- You need stronger basic internal controls, such as having someone who handles your money separate from someone who accounts for it.
- There are problems in accounting and reporting on grants and restricted funds.
- Your organization is growing and you need to hire people who can raise money or deliver services, not finance.
- The nonprofit and its keyboard members may lack basic financial knowledge and are not getting support from your primary financial staff person.
- You simply don’t have reliable financial information, allowing you and your Board to make good decisions.
What Benefits Might You Experience Through Outsourced Accounting Services?
Outsourcing your accounting can result in significant cost savings. While results vary from organization to organization, the cost of outsourcing generally does not exceed the true cost of maintaining the function in-house. Likewise, outsourcing will result in a major lift in the quality of financial information and internal control. Some benefits you may expect are:
- Allow the CEO to focus on the mission and program delivery with minimal distractions.
- Provide relevant, accurate and timely financial information to the various stakeholders (internal managers, Board, donors, funders), resulting in better decisions.
- Operate within a system of internal control that reduces the risk of fraud and misallocation of assets, while satisfying audit requirements.
- Reduce the number of internal accounting staff through process standardization and training, allowing for greater productivity.
Additional benefits to expect are listed below:
- Defer the need for a full-time financial professional.
- Minimize internal staff distraction and external fees for audit preparation and support.
- Facilitate transition to a professional in-house staff when growth requires that step.
- Assure continuity of the finance function upon personnel turnover.
- Board and CEO receive knowledgeable advice and mentoring from a trusted financial professional.
- Eliminate the need for separate in-house installed accounting software and IT maintenance costs.
- Enjoy certainty and peace of mind that financial management is working.
Take this self-quiz. If you can answer yes to some of these you may be a perfect fit for our services.
Are You Ready To Explore Outsourced Accounting Services?
Do You Want to Take a Deeper Dive Into the Accounting Services Offered?
articles on outsourced nonprofit accounting servies
A nonprofit organization’s decision to outsource its accounting can provide cost savings over that of maintaining an in-house staff. We’ve covered some of these cost savings in a previous article, Which is More Expensive? Outsourced Nonprofit Accounting vs. In-House Staff, but the benefits of outsourced nonprofit accounting reach beyond that of financial savings. For this purpose, we’ve written another article to take a deeper look at the benefits of outsourced nonprofit accounting beyond the money.
Better nonprofit accounting with less turnover
Employee turnover in the accounting department is a real and constant issue. It disrupts operations and consumes valuable personnel time to recruit and train a new finance employee. An outsourced accounting provider eliminates this problem by assuring there is a trained team of consultants assigned to the client that are cross-trained and can fill-in, without a hitch, when someone on the team leaves. NFP Partners covers the cost of employee turnover in this article.
Outsourced nonprofit accounting helps with internal control
At the beginning of an outsourced accounting engagement, the outsourcing provider helps the client set up a system of internal control with its own protocols and processes, such as month-end closing and reports review. This relieves the client from having to establish a system of internal control on its own, which unfortunately tends to be something that doesn’t get done or maintained and opens exposure to fraud and loss.
A reputable outsourcing provider must also be insured for general and professional liability including potential theft. If your nonprofit is struggling with internal control processes and isn’t quite ready for outsourced nonprofit accounting services, then we suggest diving into the articles Internal Controls Made Easy for Nonprofit CEOs and Internal Controls for Nonprofits- Top 10 Best Practices.
The Denver-based, American Cheese Society (ACS) is the leader in promoting and supporting American cheeses. With nearly 1,500 members in the United States, Canada and beyond, ACS provides the cheese community with educational resources and networking opportunities, while encouraging the highest standards of cheesemaking focused on safety and sustainability.
The nonprofit’s accounting challenge:
In 2010, the American Cheese Society transitioned from an association management company to a self-managed association. The nonprofit’s previous management company grew the chart of accounts to 20 pages.
In order to obtain meaningful financial information, ACS needed to simplify the chart of accounts. In addition, the newly self-managed association needed to set up all business functions. Namely, the nonprofit needed to hire staff, set up an accounting system and accounting policies and procedures. Furthermore, the nonprofit needed to jumpstart banking, payroll and tax filings, insurance, and association membership systems. (more…)