We’re not just an accounting service, we’re your dedicated partner in your journey to make a difference. When outsourcing accounting services, it’s essential to partner with a firm that understands and aligns with the nonprofit’s core principles and goals. Good stewardship is not just a legal requirement for nonprofits, but a development, credibility, and longevity tool. Outsourcing of accounting by nonprofit organizations is a strategic move towards efficiency in financial management and core mandate.

Building a better CPA firm: Getting governance right

These organizations often have job boards and can recommend qualified candidates. Speaking with other non-profits that have worked with the accountant can provide valuable insights into their reliability and effectiveness. Ask for references and follow up with them to get a sense of the accountant’s performance and client satisfaction.

Be Transparent About Your Finances

Cost is a significant factor for non-profits, which often operate on tight budgets. Outsourcing can be more cost-effective for smaller non-profits, while larger organizations may find that a full-time internal accountant provides more value in the long run. If interested in hiring an outsourced accountant, understanding the accountant’s fee structure is crucial for budget planning.

Peer organizations can provide valuable insights and referrals based on their experiences. Ensure that the candidate is proficient in accounting software commonly used by non-profits, such as QuickBooks, Blackbaud, Fund-EZ, or other best practice to hire or outsource for nonprofit accounting fund accounting systems. Familiarity with these tools can streamline financial reporting and enhance accuracy. Clearly outline the roles and responsibilities of both the nonprofit and the outsourced provider, specifying tasks, deliverables, and timelines. Additionally, you can save on salary expenses by outsourcing to areas with relatively low living costs. For instance, salaries in LatAm are generally lower than in the US or Europe, making it a more affordable option for nonprofits with tight budgets.

This assessment led to a broker bidding process that resulted in BBYO’s selection of a new broker that we have been extremely satisfied with. Let’s discuss how CSH’s not-for-profit experts can support your mission-driven work. Even after outsourcing begins, nonprofits need to manage the working relationship proactively. Regular communications, preferably monthly meetings, help exchange feedback and resolve issues.

Navigating Common Challenges in Nonprofit Accounting

• There are few scarier words than “audit” in the English language (and this comes from a team of former auditors!).
• An experienced accountant will help you navigate nonprofit payroll challenges.
• Providers handle payroll processing, tax calculations, and compliance with employment regulations, freeing nonprofits from the complexities of payroll management.
• For example, offshore employees doing tax work gather and organize data from clients’ documents, begin the initial preparation, and perform a self-review.

Lastly, the provider you chose should demonstrate a desire to partner with your organization over the long term and continuously seek opportunities for process improvements and improved efficiencies. Let our Ultimate Guide to Outsourced Nonprofit Accounting show your organization how to solve the accounting challenges you face and set your financial management up for success while you spread your mission. Popular choices for nonprofits include Sage Intacct, Blackbaud Financial Edge NXT, and Aplos Software. The software must support the entire accounting process, provide flexibility, and meet compliance needs. The nonprofit and the firm must be comfortable using the selected software to avoid future challenges. This provides annual savings while receiving specialist assistance to complete mandatory financial tasks.

CBIZ offers several services that nonprofits can use to solve specific financial issues. Their single audit option complies with Uniform Grant Guidance, which is a government-wide framework for grants management, so your nonprofit can rest assured that your data is secure. The nonprofit accounting challenges detailed here are the biggest and most common.

Guide: Is Outsourcing Right for Your Nonprofit?

• A significant majority of businesses (over 68%) leverage outsourcing to enhance efficiency, cut expenses, and boost profitability.
• You’ll list revenue and expenses accrued over the year and create alignment with any restricted funds.
• Reviewing the Statement of Activities monthly, quarterly, and annually is standard practice.

In addition, outsourced accounting for nonprofits includes setting up controls to track restricted and unrestricted funds to meet donor accountability. Outsourcing accounting operations for nonprofit organizations is a practical approach as it allows organizations to focus on their core business while accounting is well taken care of. This blog discusses outsourcing and its relevance to nonprofit financial management. Nonprofit organizations at every stage, and every size, experience accounting challenges.

Budgeting and grant reporting

Use industry-specific job boards that cater to the non-profit sector, such as Idealist, NonprofitJobs, or The Chronicle of Philanthropy. These platforms attract candidates with relevant experience and a passion for non-profit work. Donor retention is all about showing donors gratitude, reaching out regularly with updates, and helping them see the impact they’re making. Financial audits can have a bad reputation as something an organization only has to face when something goes wrong.

Documenting your long-term strategy will help you see how each year’s finances move you closer or farther from your big goals. The outcome is a clear view of how donations are being used to share with an accountant, board members, or other stakeholders. Reviewing the Statement of Activities monthly, quarterly, and annually is standard practice. The name Jitasa means, “the spirit of serving others” and the accountants who work there do what they can to hold true to that name. A lot goes into deciding to hire off-shore talent, but once the decision is made, research and planning are paramount. There are few scarier words than “audit” in the English language (and this comes from a team of former auditors!).

Challenges Faced by Nonprofits

It allows nonprofits to focus on serving their mission while meeting all statutory compliances expertly. A well-managed outsourcing relationship aids nonprofit sustainability, growth, and public trust over time. The agreement should also mention compliance requirements to be met, data access and security protocols, dispute resolution process, and terms of termination if required. Nonprofits must understand this contract fully before signing it to ensure a protected and smooth long-term working relationship with the outsourced accounting firm.