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 have covered 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. Unfortunately, this 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.
Reach GAAP compliance with outsourced nonprofit accounting
The outsourced accounting firm provides assurance that federal, state and local laws and regulations are observed in dealing with taxes. Similarly, the outsourced accounting firm provides financial reports that comply with General Accepted Accounting Principles for nonprofit organizations.
Add accounts payable automation to the benefits list
The outsourcing provider has access to third-party applications that possess capabilities beyond normal accounting department functions. Accounts payable automation can accomplish the AP tasks, in all or in part, that would normally be done in-house.
For example, purchase and invoice approval, payment, reporting with integration with the general ledger, and more. This capability becomes economically feasible for organizations that process up to 150 invoices monthly and can make outsourcing even more cost-effective.
Outsourced nonprofit accounting brings peace of mind
Full attention to reliable financial information can be a helpful piece needed in moving the organization forward, fulfilling its mission, and being able to sleep at night. That is priceless.
For more information on how NFP Partners outsourced nonprofit accounting services can help your nonprofit organization, contact us today. To learn more about outsourced nonprofit accounting, visit our Ultimate Guide to Outsourced Nonprofit Accounting