As your organization grows, avoiding every single mistake — especially when it comes to accounting — is an unreasonable goal. However, if you know what to look out for, a smooth and relatively problem-free nonprofit accounting process is achievable.
Here are a few mistakes that nonprofits tend to make when it comes to accounting and how to navigate through them.
Inconsistently Checking Balance Sheets and Bank Statements
If you don’t stay on top of your accounting records, you’re almost definitely going to run into mistakes. Fix this by consistently checking your nonprofit’s balance sheets and bank statements. Checking these statements regularly will keep you informed of transaction recipients and amounts, and any discrepancies can be fixed as they pop up instead of taking everyone by surprise during an audit or at the end of your fiscal year.
Not Having Professional IT Support
Hiring professional IT support will save your nonprofit money in the long run. You won’t have to worry that temporary mistakes will turn into permanent problems and cost you time and money when they can’t be quickly solved by regular staff.
IT support will help you move forward in your accounting duties with confidence, knowing that your nonprofit’s data, accounting software, and other confidential information is protected and securely hosted. Outsourcing to a respected and professional IT company, such as CMIT Solutions, to take on technical details and issues so you can focus on payroll, tax consulting, and client acquisition can be advantageous to your nonprofit.
[Related: Why Work in Nonprofit Accounting?]
Hiring General Accounting Volunteers Instead of Specialists
Despite the volunteer-led structure of a majority of nonprofits, managing the finances of a nonprofit organization is something that should be done by someone with experience in the field. A professional accounting group that specializes in nonprofits will understand the differences between managing working capital for a for-profit business and for an exempt organization. These particularities include specific audit processes, different annual fiscal calendars, overseeing contributions and membership revenue, and of course, tax exemption.
Handing your nonprofit accounting needs to a volunteer or a general accountant rather than a nonprofit specialist can be detrimental to your finances. Rest easy knowing that your organization’s finances are in reliable, experienced hands and hire a nonprofit accounting specialist to handle the nuts and bolts.