In my first post of this blog series, I covered basic best practices that nonprofits should keep in mind when assessing the effectiveness of their accounting departments. For the second part I will discuss a few simple ways to get your accounting department’s reporting on track. Nonprofits have the distinct responsibility of diligently answering their donor’s questions and needs. They must ensure that all donation dollars received are going towards the programs as promised to the donor. In order to meet and exceed donor expectations, the reporting capabilities of your accounting team must be up-to-date and recorded properly. Here are six easy steps that your accounting team should follow:
- Enter all transactions and financial data as soon as possible. While the transaction is current everyone remembers the intent of donor, the reason for the transaction, and the program intended to support.
- Reconcile your bank account monthly. No excuses.
- Reconcile your accounting donor schedules with development schedules monthly. Follow-up with all differences and adjust accordingly.
- Generate reports monthly for operations, departments, and programs.
- Review the reports to check for accuracy. Errors, omissions, reclassifications should be adjusted immediately.
- Back up your files and store in secure, safe place at least every other day if not daily.
- File your required tax reports and tax deposits on time.
In addition to these steps, make sure your board treasurer and other financial professionals have line of sight to your reporting and accounting functions. Their input is helpful and having an extra set of eyes to catch potential mistakes is never a bad thing. Having the right team of professionals around you is key to ensuring the organization is moving forward and serving its mission to the best of its ability.
Have any questions or concerns regarding your nonprofit’s reporting structure? Contact us here or sign up for this webinar that will explore how the finance field is continuously reshaped, and how top nonprofit organizations manage their accounting teams in an ever-changing environment.