By Jennifer Arbore.
From perfecting the art of virtual fundraising and volunteering to implementing fresh social media strategies, creating innovative donor retention programs and driving their missions forward despite a myriad of ongoing global challenges, today’s nonprofits are dealing with a complicated and quickly evolving landscape.
That’s why operations need to be as simple as possible.
Nonprofit leaders can no longer afford to spend their time on day-to-day operating tasks. Instead, they must prioritize the type of strategic thinking that will drive their organizations forward. In addition, to be a true visionary leader, nonprofit executives need access to real-time financial data that will enable them to make informed, strategic decisions. As a result, nonprofits should seek a partner who can provide the people, process and software needed to handle the organization’s finances – allowing leadership to focus on strategy.
The following represent three ways outsourced accounting services can help nonprofit leaders gain a competitive edge in today’s challenging operating landscape:
More Time for Strategic Leadership
According to a recent study conducted by BI-Survey, “best-in-class” organizations base their decisions on data, while “laggard” organizations base as many as 70% of their decisions on gut feel.
Now, more than ever, nonprofit leaders should strive to back up their decisions with real-time financial information. However, for this to happen, they first need the time to think strategically. Unfortunately, many face shortages in staffing and therefore wear many hats, one of which is often financial. Without the help of a third-party partner handling their finances, it is easy for nonprofit executives to get swept up in day-to-day operations instead.
Access to Real-Time Data
Another study conducted by PwC and The Economist revealed that nearly half of executives surveyed make a big, strategic decision at least once a month. However, nearly one-third of respondents reported making these decisions based on gut instinct alone because they couldn’t access the data they needed to make timely, thoughtful decisions.
Nonprofit leaders need to quickly access and understand large amounts of data so they can evaluate all possible scenarios and choose the option that will accelerate their organization’s success. Outdated software and other manual processes can leave organizations drowning in a sea of disconnected spreadsheets, inhibiting their decision-making process.
Not only do spreadsheets slow down processes and decision making, but they also rely on too many manual keystrokes, raising the risk for inaccurate reporting. They also don’t provide the kind of transparency nonprofit leaders need to plan the programs and fundraising initiatives that will resonate most with key constituents.
Consistent Financial Expertise
Having accurate financial data isn’t a nice-to-have in the nonprofit sector. It’s a necessity. It takes just one error or omission to put an organization’s tax-exempt status in peril. In addition, any noncompliance issues can jeopardize an organization’s potential grant eligibility.
This is where it gets hard for leaders. Many nonprofits do not have the budget for a CFO, let alone a large, in-house financial staff. Even if they do, their budget likely pales in comparison to their for-profit counterparts. Furthermore, when staff turnover inevitably happens, in-house financial professionals take their expertise out the door with them – leaving leadership struggling to quickly find a replacement in today’s challenging job market.
Partnering with an outsourced accounting firm can not only help leadership recapture lost time, but also increase financial efficiency and improve data accuracy – providing real-time insights and expertise that will embolden organizations’ missions and allow them to maximize their impact with limited resources.
Jennifer Arbore joined The Bonadio Group in 2017 as a partner with the firm’s Healthcare/Tax-Exempt Audit Practice. In 2019, she transitioned to the Outsourced Accounting & Finance division where she leads a team focused on providing outsourced accounting services to nonprofit organizations. Jennifer has over 25 years of experience in public accounting working closely with nonprofit organizations.