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Overcoming the Challenges Faced in Nonprofit Finance Departments

Overcoming the Challenges Faced in Nonprofit Finance Departments

Nonprofit Financial and Expense ManagementFor anyone in the for-profit sector reading this, we have a surprise for you: Nonprofit organizations have the exact same challenges as you’d expect for a business of your own. Things like recruiting, finance, marketing, and industry competition are very real and very important to improve upon with a much tighter budget (and more demand for transparency) than for-profit businesses.

For the 1.5 Million registered nonprofit organizations in the United States alone, you already know these everyday challenges.

You also know that competition is increasing. With the amount of nonprofit organizations and public charities increasing by 30% and 60% respectively (source), finding grants and even individual contributions proves increasingly complex each year.

Related: Three Traits of the Non-Profit Employee on the Concur Blog

With this increasing competition comes increasing scrutiny among grant makers regarding your financial reports. You (not to mention the grant makers and regulators) need visibility. This poses challenges which your organization can and will overcome.

Meeting the Challenges of Nonprofits

So, what challenges are at the top of the list for nonprofits? How can and will you overcome them?

Regulatory and Compliance

As mentioned previously, the regulatory and compliance requirements have and will continue to be issues for nonprofits, charities, and not-for-profits.

With anyone able to view your publicly shared balance sheet, expenses, fundraising, and organizational efficiency, you come under as much if not more scrutiny than publically traded companies. Any costly oversight may not only cost you donors and grants, but could result in a loss of good standing, revocation of 501(c)(3) status, fines, penalties, and more.

For more information, please view Wrapping up 2014—A Review of Nonprofit Compliance on Nonprofit Ally.

The cure? Automation, uniformity, and minimal reliance on manual processing. If you’re transferring data by hand between spreadsheets—from expense management to accounting or fundraising to accounting—you could join the 30% of organizations with data errors in spreadsheets.

Related: Why Automation is Pivotal for Nonprofits

The better the uniformity in reporting, the less risk for error. The less risk for error, the better you and your organization looks to regulators.

This is not to mention, of course, the other benefit of automation—efficiency.

Working on Tight Budgets, Tighter Hours

Your accounting department consists of how many people? A few less than the average for profit organization, all while requiring the same commitment to detail as a publically traded organization?

This means that with tight hours, you can’t be chasing around contractors, employees, and volunteers for expense reports for your latest event. Further, you can’t afford to jump across spreadsheets managing donors, inputting them into your CRM and accounting.

The automation and uniformity promoted in the last section is just as important here.

The less time you spend copying and pasting data, the more time you have to help work on the strategic goals of your nonprofit, or working on what so many other financial professionals have to do—other department jobs (for more information, read Confessions of a Nonprofit CFO).

Putting Everything Together

If and when you have to deal with an inconsistent revenue stream, things can get even more hectic. If you’re like many, you just hit the end of your busy season, in which donors tried to get anything they could into a charitable organization in December for tax and holiday giving purposes.

Related: Powering up Your Nonprofit Fundraising

While spikes in revenue are nice, the peak-and-valley nature presents a challenge. Even in inflow changes, costs generally do not. This is why transparency into spending through business intelligence can prepare you for the monthly peaks and valleys you’ve come to expect.

You got into this job because you wanted to take skills to help support your passion. Let us help you.

How to Create Efficiency, Visibility, and Transparency

It’s takes brains, heart, and commitment to run finances a nonprofit organization. We understand that. With many of our employees coming from a background in the sector, we know the challenges. We also know the joys of seeing the faces of those we helped.

This is why we would like to invite you to learn more about how we can help you help others. At Brittenford Systems, we have supported nonprofits since our inception nearly 20 years ago. As a provider of financial management through Intacct, expense and invoice management through Concur, and constituent relationship management through Orange Leap, we would like to help you save time and money this year.

Each nonprofit and charity is different. See below how each has benefitted from enhanced automation and improved technology.

Learn more about Brittenford’s Solutions for Nonprofit Organizations, and contact us to learn more.

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