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 service can benefit your nonprofit organization and get your questions answered by exploring the topics below:
The Ideal Candidate for Outsourced Nonprofit Accounting
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 or expects 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
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.
Benefits of Outsourcing
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.
- Does your organization require an audit that may involve heavy preparation by the accounting department?
- As management, are you focused on the mission with little or no time for attention to finance and accounting functions?
- Are your financial tracking and reporting requirements somewhat complex and require specialized nonprofit accounting expertise?
- Is your organization attuned to a modern flexible work environment that is facilitated by technology?
- Do you want to control administrative overhead costs, while at the same time receive high-quality financial reporting?
- Is your organization unhappy with your present arrangement?
- Are you comfortable with not having your finance and accounting resource on site every day as a staff member?
At NFP Partners, we recognize that each organization is different and one size does not fit all. Accordingly, we adapt our services to what works best for the client organization. Because of such, our involvement can be short-term or extend to a long-term commitment as an integral part of the back-office infrastructure. Furthermore, we have designed our services to meet your needs with respect to the dynamics and culture of your organization.
The process is simple. Either email or call us at 303-586-5011. You can also complete and submit the contact form on this page.
Before you engage our services, we put some time and effort into learning about your organization, personnel, mission, and programs. Additionally, we look at your expectations and financial infrastructure. While doing so, we have a short conversation with your decision-maker to determine whether there’s a compatibility of interest. From there, we usually ask that you complete a questionnaire providing basic information about your organization and finance function. In most cases, the questionnaire is followed up with a more in-depth discovery session that provides the information we need to prepare a proposal leading to a signed Accounting Service Agreement.
It is our objective, and we believe to your benefit as a client, that the fee arrangement is set up at a fixed rate per month. On the other hand, because our services are tailored to each client’s needs, there can be some uncertainties that need to be settled before going to a fixed fee. Because of such, for the first few months, we would bill you on a time and materials basis with the intent being transitioning to a fixed-fee arrangement when mutually agreeable.
Depending on the level of services you require, NFP Partners can fulfill many roles. Namely, our experienced nonprofit accounting consultants can serve as bookkeepers (or accounting operations specialists), accountants, controllers or Chief Financial Officer.
Our service approach is collaborative and tailored to your growth-stage and needs.
- When working with small organizations, we can take turnkey responsibility for accomplishing all accounting and reporting tasks.
- While working with mid-size organizations, we usually take a more collaborative approach and rely on one or more administrative people on your staff for day-to-day accounting operations under our supervision and training. For instance, your staff member takes on transaction entry, filing, bank deposits, check writing, etc. In these arrangements, our primary role is to handle tasks that require specialized accounting knowledge and serve as your controller. In doing so, we have a focus on internal controls and best practices. Likewise, we are generating reliable and timely financial statements that comply with generally accepted accounting principles (GAAP) for nonprofit organizations.
Following is an example of a list of typical accounting functions you can expect from us in an ongoing outsourced accounting engagement:
- Design, document and implement internal controls, financial policies, and procedures.
- Setup and maintain accounting software for best efficiency and results.
- Interact with the Board of Directors (BOD) Finance and Audit Committees.
- Develop operating and capital budgets and integrate with financial reporting.
- Prepare for and support the annual audit.
- Interpret and communicate financial information to the executive and BOD.
- Track and report on grants and programs with special regard to restricted funds in the formats required by funders.
- Develop cash management tools and forecasts.
- Setup automated billing and bill-payment utilizing electronic funds transfer protocol.
- Provide or coordinate payroll services and labor distribution.
- Prepare and file tax reports to government agencies.
- Support financial forecast component to long-range strategic planning.
- Setup and maintain a fixed-asset sub-ledger for accountability and calculating depreciation.
What are some of the services that are available but might be outside of the normal scope of the outsourced accounting engagement?
- Provide fill-in accounting and controller service on a temporary basis.
- Conduct special financial analyses.
- Prepare documentation regarding federal tax exemption and the Form 990.
- Support applications for grants with relevant and accurate financial information.
- Provide structured training for the executive team and BOD on financial literacy and understanding financial statements.