Outsourced Accounting for Non-Profits: Is it a Good Idea?
Many businesses outsource their accounting, but most non-profit organizations have turned down the idea. They are often jaded by the misconceptions that it is too pricey or it's more advantageous to keep managing finances in-house.
However, in-house accounting comes with its downsides, like:
It can be incredibly costly if you have a high-level financial professional in-house.
With a limited budget, one person managing finances might also be the one running your operations or doing fundraising. Financial responsibilities take time and attention away from your team, who could be doing other work that drives your organization.
Should the person managing your finances leave your organization, you have to spend your time training when you could be focusing on running your programs.
If these downsides are affecting your business, outsourcing your accounting may be the best option.
Benefits of Outsourced Accounting for Non-Profits
Outsourced accounting rids the downsides of in-house accounting and offers additional benefits to the way your finances are managed.
Choose the Level of Service You Need
When you outsource your accounting, you only have to pay for the services you need. Unlike an in-house financial professional, an outsourced accountant will let you decide what services you need and let you pay for just those services.
As time goes by, you may realize you need more, or fewer, services than you anticipated. If this is the case, an outsourced accounting service will allow you to scale your services to better meet your needs.
This is a great way to ensure you are not paying for services you don't need or spending money on a full, or even part-time financial professional.
More Time for You and Your Staff to Focus on Operations, Program Work, and Fundraising
As previously mentioned, when you do your finances in-house with a limited budget, it is likely one person managing finances might also be the one running your operations, programs, or doing fundraising. Staying busy with financial responsibilities takes their attention away from other value-adding tasks. Plus, don't forget that one person could not know these very different areas well.
An outsourced accountant manages all sides of finances, so you don't have to.
When you know your finances are being taken care of by a professional, you can be confident they are being done correctly and on time. You won't have to worry about making a mistake or missing a deadline. You can have peace of mind.
Access to High-Level Financial Advisory
Managing non-profit finances isn't common knowledge for most people, which means you may have a tough time when it comes to making important decisions for your organization based on your numbers.
One of the most beneficial aspects of an outsourced accountant is having access to a high-level financial advisor. Their experience, coupled with industry knowledge, will add depth and intentionality to your finances.
Because it's likely your non-profit deals with grants on some level, and their accuracy is essential, you can expect guidance in this area as well. They'll make sure you are on track with:
Designing and maintaining a grant-tracking master list.
Preparing financial reports for federal, state, or foundation grants.
Have you duck in the row for federal and state single audits.
The advice from your accountant won't be as costly as a traditional financial advisory service because they are already familiar with your organization and have a solid idea of what systems and processes will lead you to success.
New Technology to Improve Your Processes
The world has made a massive shift to technology over the last decade. This reigns true for managing your finances as well.
There is an abundance of technology that can automate just about any financial process.
For example, here are a few financial processes and suggested tools to improve them:
Payments - bill.com
Timesheets - QuickBooks Time (formally TSheets)
Receipt capture - Dext
Accounting systems - QuickBooks Desktop/Online
When chosen correctly, these tools can be integrated together to create an accounting system that runs smoothly and efficiently.
An outsourced accountant will work with you to determine which tools would be the most beneficial to your organization and walk you through how to use your new technology. With their help and continuous training, you'll have tools to manage your finances and an expert better to guide you along the way.
Stable Financial Assistance
With an outsourced accountant, you will continuously have a financial-minded partner you can rely on. They'll be focused on keeping your finances in check.
You won't have to worry about an employee leaving and retraining someone to manage your finances. Outsourcing your accounting leaves you with a reliable and consistent financial management partner dedicated to serving your organization.
Considering Outsourcing Your Non-Profit Accounting?
If you're looking for the perfect accountant to outsource your non-profit's finances to, consider Koteff Accounting Group. We are committed to making non-profit organizations stronger together. We know how much the state of your finances means to the success of your mission and are here to support you.
Ready to explore your service options? Fill out this form, and we will contact you to schedule a meeting.