By Jim Simpson, CPA and director, Financial Technologies & Management
In 2013, over 1.5 million tax-exempt organizations in the
U.S. reported $1.74
trillion in total revenues and $1.63 trillion in total expenses, according
to the National Center for Charitable Statistics. That means nonprofits are
responsible for reporting and tracking all that financial information.
In September, Abila, a nonprofit software company, set out
to understand this current financial landscape and interviewed 350 nonprofit finance
professionals. Specifically, they wanted to:
o
learn about the day-to-day challenges
facing nonprofit finance professionals
o
define emerging trends in fund
accounting and technology
o
apply how trends and challenges
differ based on the organization
Nonprofit boards and leaders should pay careful attention to
the Nonprofit Finance study. The study reveals that the trends are for smaller,
leaner finance teams and the importance for leaders to improve the finance department
by implementing more efficient software products and processes.
Finance teams staff feels too many of their limited
resources are spent on day-to-day activities, and not on more important
strategic and planning activities. A typical
finance team says they spend significantly more time than they would like in the
following areas: helping other departments, month-end-closing, financial reporting,
grant reporting, bookkeeping, accounts payable, accounts receivable and payroll
processing. Their preference would be to spend more time with strategic and
planning activities including strategic accounting, financial analysis, budget
planning, and board engagement and development department activities.
Here are some key findings and study recommendations for how
you, as a nonprofit finance professional, can overcome similar challenges.
·
Interruptions
are common: It would help if
other departments would schedule collaboration times and learn to self-manage their
finance role to minimize interruptions to the finance department.
·
Nobody
is above the basics: Nearly all financial/accounting
professionals continue to be involved in the day-to-day activities of the
organization. This is reflective of a trend towards smaller, leaner finance
teams.
·
Funding
is (obviously) key: Organizationally,
finance/accounting professionals identify long-term sustainability and finding
new funding sources as the biggest challenges.
·
Embracing
the cloud: Larger
organizations are moving to the cloud quicker, and see greater value and
benefit to cloud-based software. Overall, most of the respondents see the cloud
as beneficial, with security being the biggest area of concern.
·
Finance/accounting
professionals want to focus more on strategy: By and large, respondents spent much of their time focused
on either running reports or preparing for monthly presentations, and would
like to spend more time on strategic and budget planning.
forensic accountant to nonprofit organizations since 1999, serving over 350 nonprofit clients. He has worked as a CFO, controller and software advisor for over 25 years.
Contact Financial Technologies & Management to learn how our
firm can improve your organization’s financial management operations and
capacity.
You can schedule
an appointment directly from
the website at WWW.FTMLLC.COM, or email info@ftmllc.com; or phone at 317-819-0780.
