Happy Halloween! In the spirit of the season, we’re sharing the top ten scariest things that our CPAs have encountered in our work with nonprofit organizations. Many of these spooky situations are all too common with understaffed, overworked nonprofits; fortunately, there are some easy fixes you can implement to keep your accountant from running away screaming.
The Lone Specter - If one person is responsible for everything in your finance department (depositing checks, reconciling bank accounts, approving bills), your organization is at a high risk for fraud. Always separate accounting functions between multiple people.
Account Graveyards – Has it been ages since you’ve reconciled your bank and credit card accounts? Accounts should be reconciled monthly to catch mistakes and ensure your financial records are up to date.
Ghosts of Expenses Past – Do you really want to give your accountant a fright? Just drop a pile of crumpled, coffee-stained receipts on their desk! If you’re struggling to keep track of credit card receipts, consider a digital solution like Expensify.
A Mysterious Phenomenon – The only thing worse than a messy pile of receipts is no receipts at all. Expenses should always be documented with receipts, invoices, purchase orders, and/or copies of cancelled checks.
The Paper Monster – Paper files can quickly grow into an unwieldy beast. They can also be easily lost, destroyed, mis-filed, or difficult to locate when your accountant needs them. Try digitizing your files so your important documentation is at your fingertips at all times.
Phantom Approvals – What is your organization’s approval process for purchases? If you’re not sure, it’s time to set up a clear chain of approval to avoid any unauthorized expenses. A digital bill payment system like Bill.com can make it easy to obtain approval before payment is released.
Zombie Workers – Is your finance manager always at their desk, day in and day out, never taking a sick day or a vacation? They might be a zombie, a workaholic…or a potential risk for fraud. Accounting personnel should always be required to cross-train other staff and take time off from work. If any fraud is occurring, this will provide an opportunity for it to be exposed.
Trick or Treat – Cash transactions can sometimes involve more tricks than treats. Always designate at least two people to count cash at fundraising events, and make sure that cash is always deposited at your bank as soon as possible.
Haunted By Emails – Email is a very useful method of communication, but it’s not the best way to share documents with your accountant. Plus, we all know that one person who never remembers to “Reply All!” Uploading your files to a digital document portal is much more secure and helps to prevent confusion and miscommunications about important documents.
The Unseen Menace – Closing your eyes during scary scenes might work for horror movies, but it doesn’t help anything when it comes to finance. Your accounting department should regularly undergo review from an outside party, whether that’s an audit, a financial statement review, or oversight from a finance committee.