NFP Partners offers a full range of outsourced accounting services to nonprofit organizations, ranging from total operation and management of the finance function to higher-level CFO support. Organizations in every growth phrase – from startup to maturity – can benefit from our expert outsourced accounting assistance. Since the CEO or Executive Director is generally focused on the organization’s mission, programs, or fundraising initiatives, managing in-house accounting, especially during the early and middle growth phases, often leads to mediocre results. Our flexible outsourcing arrangement generally costs less than maintaining a full in-house accounting function, and it provides the peace of mind that it is being done correctly.
Outsourcing nonprofit accounting services can result in a significant cost savings. Results will vary from organization to organization, but through our nonprofit solutions, we can demonstrate that the cost of outsourcing will not exceed the true cost of maintaining the function in-house and will result in a major lift in the quality of financial information and internal control. The main benefits are listed below. For further information, please review the Outsourcing Benefit Impact Table and a Sample Cost-benefit Analysis.
- Allow the CEO to focus on the organization’s mission and programs with minimal distractions.
- Provide relevant, accurate, and timely financial information to various stakeholders (internal management, Board, donors, funders), resulting in better decisions.
- Operate within a system of internal control that reduces risk of fraud and inadvertent misallocation of assets, while satisfying audit requirements.
- Reduce the number of internal accounting staff members needed to handle routine data entry and information retrieval tasks, allowing for greater productivity across functions. This defers the need for a full-time financial professional.
- Minimize internal staff diversion and external fees for audit preparation tasks.
- Facilitate transition to a professional in-house staff when growth requires that step.
- Assure continuity of the financial function upon personnel turnover.
- Eliminate the need for separate server-installed software and related IT maintenance costs.
- CEO and Board have access to Board governance documents and implementation assistance.
- Board and CEO receive knowledgeable advice, mentoring, and challenging from a trusted financial professional.
- Enjoy certainty and peace of mind that financial management is working.
The Ideal Candidate for Outsourced Non Profit Accounting
The Ideal Candidate for Outsourced Accounting
Most small- to mid-size nonprofit organizations will benefit from outsourcing their accounting processes at some stage in their journey. Here are a few distinguishing characteristics that make an organization an ideal candidate for our nonprofit accounting services:
- The CEO and Board want to minimize administrative overhead, but at the same time, understand their fiscal responsibilities and risks, want to follow best practices, and set a high standard for financial reporting relevancy, accuracy and timeliness.
- The organization is between startup and middle-age with an operating budget from $250,000 to $3,000,000.
- The financial tracking and reporting requirements are moderately complex and require some specialized nonprofit accounting expertise and software tools that otherwise may not be readily available or affordable.
- The organization requires an audit, or expects to reach this point fairly soon.
- Management is focused on the mission, programs and fundraising, leaving little time to focus on financial management.
Our Approach and How It Differs
Our outsourcing approach to providing nonprofit solutions goes beyond traditional bookkeeping and differs from other accounting service providers in that we provide a level of service that is tailored to the client’s particular growth stage. Our goal is to ensure a smooth continuum of services that support the client’s progression to long-term sustainability and to an eventual transition to professional internal management of the finance function. Some of the key characteristics of our service approach are listed below:
- Engagement with clients is collaborative in that the consultants encourage clients to conduct day-to-day accounting operations, while providing training, oversight, and review to ensure financial reporting accuracy and timeliness.
- Utilize accounting software that fits the client’s needs and tailor it to each client’s present and anticipated requirements.
- Employ a team approach, with one consultant assigned to a client, while another named professional provides review and quality assurance.
- Provide CFO-level and specialized services as needed.
- The software is hosted at a secure data center with transparent client access over the Internet.
- Provide an individualized internal control plan, including written financial policies and procedures.
- Supply tools and documentation for governance compliance and achieving accountability best practices.
NFP Partners offers two basic service models and a blending of the two depending on the client’s needs and stage of development.
- Turnkey Model – Provides full turnkey accounting, including accounting operations and reporting for organizations – from startup through early growth and beyond. The client has round-the-clock access to the financial system for inquiry and report printing.
- Collaborative Model – The collaborative accounting services model is designed for organizations that have achieved early growth, and because of transaction volume increases and other growth factors, perceive the need to conduct most administrative and accounting functions in-house. Typically, this is when a bookkeeper or accountant would be hired with the expectation that all aspects of financial management can be delegated — often relegated — to that one person. Sometimes this person is ill-fitted for the position. If the person is over qualified, the mundane day-to-day work becomes boring and skills are underutilized. If under qualified, the person struggles to learn the job, while receiving little guidance or training. Further, the accounting software utilized may be entry-level, and not equipped to handle complex financial tracking and reporting functions. Through the collaborative model, NFP’s services fill this void by providing the training and supervision of an internal administrative staff member, who does not necessarily require an accounting background, to perform day-to-day accounting operations. NFP perform period-end review, quality assurance and financial reports generation through the appropriate software platform.
NFP Partners offers other specialized, non-recurring financial services that may be required from time to time as an organization grows.
Please refer to the Outsourced Accounting Services table for a list of basic service under each model, along with an additional services listing.
Fees are established as a relatively fixed charge per month for the base services provided. The fee is determined after an initial discovery consultation and proposal. The recurring monthly fee covers recurring professional services and software hosting. Additional non-recurring services are billed by the hour at current professional staff rates. NFP Partners requires a service agreement for a minimum of one year for the turnkey model and two years for the collaborative model with provisions for early termination.
Monthly fees for base services can range from $500 to $2,000 for the turnkey model, but could be more should the client decide to defer bringing accounting operations in-house. Under the collaborative model, fees can range from $2,000 – $8,000 or more, depending on the functions supported by the non profit accounting software. Refer to the Example Fee Structure for an illustration of three-year fee arrangement under the turnkey and collaborative models.
For potential clients who express serious interest in engaging NFP Partners’ services, the first step is to schedule a discovery consultation to collect sufficient information to determine the organization’s needs and the scope of services. NFP Partners prepares a proposal, and if accepted, proceeds with setup, conversion, and training. An Accounting Services Agreement is prepared and executed. The initial implementation process can take one to two months or more, defined as ending when the first set of financial reports are produced. The client has the option to continue operating its current system in parallel during this period, or the client can choose to terminate the arrangement if dissatisfied for any reason with no further financial obligation.