From the Archives: 4 Ways to Make Your Nonprofit Audit Less Painful

From time to time, we share previous content that has enduring significance for nonprofit organizations. The following blog post was originally published on 1/14/16 and has been lightly refreshed.


Whether your organization is just beginning to search for an accounting firm, or you’re already rifling through drawers of last year’s documents, there are a few things you can do to make your annual audit run more smoothly. Fewer bumps in the road means a quicker, more effective, and less frustrating audit for everyone involved.

But before you schedule an audit, you should consider whether you really need one in the first place. Not all nonprofit organizations are required to conduct an independent audit. In fact, if your organization has gross revenues under $500,000, we recommend a financial statement review rather than a full audit, especially in the first year of an engagement. Reviews are much less expensive than audits and can still give you a limited level of assurance on your financials.

However, if you can’t avoid an audit, there are many things you can do to help make the process less painful - for yourself, your organization, and your accountants.

Communication Is Key

Excellent communication is the hallmark of a successful audit. Wasted time is wasted money, and nothing wastes time faster than miscommunications, long delays in responses, or confusion on what is required by your auditors. If you have questions, don’t hesitate to ask! We also recommend appointing a single individual in your organization to serve as the primary contact for the audit firm. There’s nothing more annoying than playing phone tag between different departments, or having your emails gather dust in the inbox of a staff member who’s on vacation. Designating one person to serve as the go-between can pave the way for a quicker audit.

Stick To A Timeline

Work with your audit firm to set a clear timeline early on in the process. Mark deadlines in advance, and follow them! An audit involves so many moving parts from many different groups - your board, your audit committee, your financial staff, service providers from outside your organization - so having a clear timeline is necessary to keep things on track

Digitize Your Docs

Sure, you can spend all day (or all week) pulling hard copies of your auditor’s requested documents, with your fingers crossed that nothing was misfiled eight months ago…or you can have everything you need right at your fingertips, easily found with a keyword search at your computer. With cloud-based document storage and an online bill pay system (we’re partial to, all your financial records will be securely stored, organized, and easily located, with a clear audit trail and a solid record of appropriate financial controls.

Give Honest Feedback

One of the most important steps in simplifying the audit process comes after the audit is completed. Once your auditors have departed (and you finally have your conference room back), take some time to review your experiences and make a plan for next year. Were you happy with the firm’s work and the overall audit experience? What could you improve on your part? If there’s one component of the audit that’s always a major pain, think about new systems you could institute NOW, in order to eliminate that pain next year. And if there’s anything you feel the audit firm could do to make life easier for you - tell them! Feedback is crucial to creating change, and unless you’re honest in your opinions of the firm, odds are likely that nothing will improve next year.

Although some nonprofits tremble at the thought of an audit, it doesn’t have to be a painful process. A few changes could save you time, money, and many sleepless nights - and make your auditors a lot happier too! With clear communication, a solid timeline, digitized records, and plenty of thoughtful evaluation, your next audit could be a breeze.