It's the season for giving! Your organization may have a few requests on your nonprofit letter to Santa, but don't forget that your bookkeepers, CPAs, and financial advisors have a wish list too. Bring your nonprofit accountant a little joy this holiday season, and watch their face light up like a kid unwrapping their very first calculator under the Christmas tree. (Wait, was that just us?)
W-9s From Every Vendor
The W-9 is a simple form, but it's an important one. When you ask your vendors to fill out a W-9, they are providing you with their legal name, type of business (LLC, sole proprietor, C Corporation, etc.), and their IRS tax ID number. This gives your accountant all the information they need to file Form 1099s at the end of the year. Any organization paying a vendor more than $600 annually in labor or services is required to file a 1099 with the IRS. There are exceptions and additional complications to this rule - for example, payments to corporations are generally not required to be reported. But it can be difficult to know how a vendor's business is structured unless you obtain a W-9 from them. Likewise, it can be hard to guess if you're going to exceed that $600 threshold over the course of a year. The last thing your accountant wants during a busy holiday season is to realize they're missing crucial tax information from a vendor you paid nine months ago. And since 1099s are due to the IRS by January 31st, there's only a limited window to track down the vendor and get the correct information. Give your accountant the gift of stress-free 1099 preparations by obtaining a W-9 from all your service vendors up front.
Strong Financial Controls
Nothing can cause greater damage to your nonprofit than fraud. Aside from the financial consequences, fraud can also cause serious harm to your organization's reputation. If your financial advisors tell you that your internal controls need strengthening, listen to them. No nonprofit accountant wants to see an organization fall victim to fraud. Even in very small nonprofits, there are many things you can do to lessen the risk of fraud. By segregating duties, frequently reconciling your accounts, and enforcing standardized policies and procedures, you'll be sure to keep a smile on your accountant's face.
Leadership That's Ready to Learn
Nonprofit finance is complicated - no one understands that better than our accountants. But if your board isn't investing the effort in understanding your financial statements, or if your management is unwilling to use the tools at their disposal, your nonprofit will suffer for it. You can't make informed decisions without making an effort to learn. And while you may not want to "bother" your accountant with questions, we would rather address your concerns right away than deal with a mess down the line. Don't be afraid to ask questions - that's a gift both your organization and your accountant will benefit from.