Three years ago I had this idea that the traditional nonprofit accounting model of doing all accounting in-house vs. outsourcing the function were not mutually exclusive. We put this idea into practice by offering a more flexible collaborative model where the client handles much of the day-to-day work under our functional supervision, and we serve in a controller role, doing the month-end review, reconciliations, adjusting entries and financial reports. There are variations of this model with the client doing more or less depending on ability and objectives of the Executive Director and Board of Directors.
Now having put this concept into practice, providing accounting services to more than 15 small- to mid-size nonprofit organizations over the past three years, I can attest to its success. The client enjoys the benefit of of receiving financial reports that are prepared per GAAP standards for nonprofit organizations and are timely, relevant and accurate. The cost of the service is usually less, but never more than having all the accounting done in-house. The Executive Director can focus on the mission, programs and fund raising, knowing that the accounting is in the hands of professionals. When the nonprofit organization grows and it becomes advisable and affordable to bring in a full-time finance professional, all factors and conditions are in place for any easy transition to full in-house accounting.
Some of the auxiliary benefits of the collaborative approach which we will explore further in future blog articles are:
- Bringing the right technology tools to the job – Currently, we are experts in using both QuickBooks and Sage Fund Accounting for nonprofit accounting.
- Personnel competence – Our outsourcing consultant have specialized training and many years of experience; and at least 2 people are knowledgeable of a client’s work requirements to ensure uninterrupted service should one become unavailable.
- NFP Partners’ consultants are available to provide interim finance and accounting services when a key in-house individual leaves.