A new study conducted by Abilia - a leading provider of software and services to nonprofit organizations and associations across North America - delves deep into the biggest fears, concerns, and annoyances of nonprofit finance professionals. In a series of online surveys conducted in June and July 2016, 414 respondents in finance or accounting roles spoke out about the things that keep them up at night. You can download the full 25-page study here (it’s well worth the read), but here are a few key takeaways:
31% of nonprofit finance professionals say their biggest challenge is managing the complexity of multiple revenue sources.
One in four nonprofits spend more than 10 hours a month on financial compliance. And the bigger the organization gets, the harder it is to keep up.
Audit prep is a pain. More than 50% of nonprofits need more than two weeks to prepare for an audit (20% need more than a month!). When an organization fails an audit, the major complaints include bad documentation, ignorance of requirements, and general confusion about the audit process.
55% percent of nonprofits say they nearly always separate duties that need to be separated to prevent fraud - a majority, but not nearly enough. Only 38% say their management and board members are very educated on how to avoid fraud.
Nearly 80% are concerned that new financial rules and regulations (such as FASB 117 and the new Department of Labor overtime rules) might lead to increased costs for their organization.
Almost half (46%) of nonprofit organizations say they would not be prepared if a key finance person was to depart. Only 12% say they would be completely prepared.
Only 27% of respondents in nonprofit finance roles are CPAs. 21% have received no formal financial training, and 13% were not originally hired for finance roles at all.
So what can we learn from this study? What can you do to protect your organization - and sleep a little better at night?
Some of the biggest fears and annoyances surrounding nonprofit finance stem from a lack of preparation. Change is constant, and if you’re not ready for it, you’re putting your organization at risk. Think about it - if your bookkeeper, accounting manager, or entire finance team suddenly took an extended vacation to Tahiti, who would step in? If you had to locate documentation for an invoice you paid last year, where would you find it? If you need help, who can you call? (Probably not the Ghostbusters - ectoplasm and QuickBooks really don’t mix.) Put a plan into place so you’re ready when the time comes.
Stay Informed and Ask Questions
Regulations and compliance are more complicated than ever. Fortunately, there are a number of free resources for nonprofit finance professionals. Education is key. If you don’t understand the implications of a new rule, or you’re concerned that your compliance measures aren’t up to snuff, or you feel like your accountant is speaking a foreign language - don’t hesitate to ask questions. From free webinars to CPA consultations, do whatever it takes to get the answers you need.
Play To Your Strengths
Nonprofit finance is a struggle - that’s clear. Tight budgets, staff turnover, lack of formal training, and heavy workloads all contribute to a precarious financial position for many organizations. But instead of trying to do it all, think about what you do best instead. Your time is your most valuable resource. If outsourced accounting or professional consultations can help you get back to doing what you do best, you might find that it’s well worth the investment for your organization.