OUTSOURCED ACCOUNTING SERVICES

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.

The Ideal Candidate for Outsourced Accounting

Most nonprofit organizations will benefit from outsourcing their accounting processes at some stage in their journey. There are a few distinguishing characteristics that make an organization an ideal candidate for our services:

• The organization is between startup and middle-age, and is expecting fairly rapid and steady growth over a 3 – 5 year period.
• 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/or fundraising, leaving little time to focus on financial management.
• The CEO and Board want to minimize administrative overhead, but at the same time, understand their fiscal responsibilities, want to utilize value best practices, and set a high standard for financial reporting relevancy, accuracy and timeliness.

Benefits

Outsourcing can result in a significant cost savings or cost-avoidance, but the results will vary from organization to organization. It may not have an immediate dollar impact, but over time, it builds organizational capacity through better planning and decision making. 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 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 internal accounting staff needed to handle data entry and information retrieval tasks, which allows for greater productivity across functions and deferring the need for a full-time financial professional.
• Reduce internal staff diversion and external fees for audit preparation.
• 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.
• Receive knowledgeable advice, mentoring, and challenging from a trusted financial professional.
• Enjoy certainty and peace of mind that financial management is working.

Our Approach and How It Differs

Our outsourcing approach 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:

• Our engagement with clients is collaborative in that we encourage clients to conduct day-to-day accounting operations, while we provide training, oversight, and review to ensure financial reporting accuracy and timeliness.
• We utilize accounting software, especially designed for nonprofits, which is scalable to future growth, and tailor it to each client’s present and anticipated requirements.
• We have a team approach, with one consultant assigned to a client, while another named professional provides review and quality assurance.
• We are staffed to provide CFO-level and specialized services as needed.
• The software is hosted at a secure data center with transparent client access over the Internet.
• We provide an individualized internal control plan, including written financial policies and procedures.
• We supply tools and documentation for governance compliance and achieving accountability best practices.
• The client owns the software license, and upon conclusion of our services continues on the hosted service, or on his or her own server with no disruption or re-investment.

Service Models

We offer two basic service models depending on the client’s needs and stage of development.

Turnkey Model - We provide 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. This person is ill-fitted for the position, and if he or she is over qualified, the mundane day-to-day work becomes boring and skills are underutilized. If he or she is under qualified, the person struggles to learn the job, while receiving little guidance or training.

The accounting software may be entry-level, and not equipped to handle complex financial tracking and reporting functions. Through the collaborative model, our 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. We will perform period-end review, quality assurance and financial reports generation through our software platform, Sage MIP Fund Accounting, which handles most nonprofit financial reporting requirements with ease and is a permanent solution.

We will provide 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 complete list of basic service under each model, and an additional services listing.

Fee Structure

Fees are established as a 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 software hosting, personal services, and for the collaborative model, software licensing. An additional month’s charged is assessed at the start to partially defray front-end costs incurred. Additional non-recurring services are billed by the hour at current professional staff rates. We require 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 software. Refer to the Example Fee Structure for an illustration of three-year fee arrangement under the turnkey and collaborative models.

Getting Started

For potential clients who express serious interest in engaging our services, we first conduct a discovery consultation to collect sufficient information to determine the organization’s needs and the scope of our services. We then prepare a proposal, and if accepted, proceed with setup, conversion, and training. This initial implementation process can take one to three 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. Refer to the Example Fee Structure

Request More Information

View or download an overview brochure of Outsourced Accounting Services