As your organization attempts to make the most of its resources, you may want to consider outsourcing the tasks that come under your accounting and financial umbrella. But hold for a second: you’ll need to assess the potential benefits and drawbacks first. With PABS Live Nonprofit Webinar, you can discover all your worries about outsourcing your accounting requisites to a nonprofit specialist.
An Overview of Nonprofit Accounting Services
Each organization is unique. To get their accounting system up and operating, most organizations will need to undertake the followings:
Look for a bookkeeping service that is sympathetic to nonprofits.
Look for an accounting program that can handle fund accounting.
Create a second bank account and begin reconciling your accounts.
Find out how to track in-kind donations.
Learn how to prepare financial statements and analyze them.
What’s the difference between accounting for nonprofit organizations and profit organizations?
Both non-profit and profit organizations need to submit regular financial reports as they follow many of the same accounting rules. The two sorts of organization’s goals, however, result in considerable disparities in these reports.
In addition to it, a profit company’s balance sheet details net equity for owners and shareholders, whereas a nonprofit company’s statement of financial status does not. A nonprofit, on the other hand, does not have shareholders or owners. Instead, it generates a statement of financial status, which lists the company’s assets and liabilities.
There are two types of net assets; Restricted and Unrestricted Net Assets. In profit accounting, stakeholders’ equity is equal to the company’s assets minus liabilities, which is referred to as net assets.
Statement of activities vs. Income statement: When a corporation tries to make a profit, it creates an income statement that shows its revenues, expenses, losses, and profits. This is driven by goals instead of filling the need to generate profit.
The Need for Accounting Solutions in Nonprofit Organizations
If bookkeeping and accounting are not correctly managed, nonprofits incur the risk of fraudulent activities. Because of a lack of oversight or experience, this is frequently unintended. Volunteers, who generally make up a major portion of a nonprofit’s employees, may leave unexpectedly, which results in documentation gaps.
Hiring a nonprofit accounting specialist means that someone with the necessary expertise and experience is constantly monitoring the accounts. They will thoroughly research & discover anything that an inexperienced person might overlook in between the activities to deliver the best of the nonprofit accounting solutions.
Should You Outsource to a Nonprofit Accounting Firm?
Some firms offer outsourced CFO services while others work closely with small firms that provide general accounting services. Interestingly, there are also cloud-based services that can handle some of the more time-consuming operations including order input, vendor invoice processing, and bill payment.
During periods of considerable employee transition or increased workload, many NGOs look out for outsourcing accounting functions. Certain financial supervision responsibilities, such as account reconciliation reviews and financial outcomes reporting to donors and the board, might be outsourced to improve your internal management system.
Is It Even Cost-Effective?
Depending on the size and complexity of your company, the cost of outsourcing accounting operations could be the same as, or even more than, what you’d pay a professional accountant on staff — or it could be less. When you hire a third-party company, you only pay for the services you need. You can unlock your queries with PABS Live Nonprofit Webinar.
On a concluding note, when outsourcing any accounting function, strive to deal with a senior-level nonprofit accounting specialist who knows your business well! This will benefit your senior management and board of directors by providing continuity of service and a resource. If you are still curious to know more information, delay no more & check out the live webinar by PABS. Leave us your comments and we will get back to you as soon as possible!