Running a nonprofit is going to be a very stressful and potentially personally rewarding venture. You might run your own small business or are a company of just you and freelancers. Management of business finances is of utmost importance when it comes to keeping the business running efficiently. You don’t want to deal with an audit due to mistakes that you made while doing your taxes. No one wants a huge fine to be imposed by the IRS. You want to have this organized as soon as your nonprofit launches. The following are things that you need to consider when managing nonprofit finances.
Are You Organized Enough?
Managing finances means that you have to be detail-oriented and organized. There are pieces of technology that can help you stay organized. There are apps that help categorize your expenses automatically. All you have to do is take a photo of the receipt. You won’t have to keep receipts for the entire year like in the past and risk losing them. Being honest with yourself is important as you might not be the best fit to manage the organization’s finances.
Do You Have Enough Time To Do This Alone
Entrepreneurs need to understand their skillset rather than trying to do everything on their own. Working hard and working smart are not always the same thing. Getting a professional to handle this could actually save you more money than your taxes cost. You want to make sure that cash flow projections are accurate. Seeing how much money is coming in and on what dates is also essential. Planning for holidays and other random expenses should also be done.
Your current staff could be full of versatile employees/volunteers that might have skills you did not realize. A person could have managed finances at another job and thrived although it wasn’t their main job role. You should always ask your current staff before outsourcing a job as someone might enjoy doing it more than their current job role.
Is There Technology That Can Help?
The type of business you are running is going to impact which accounting platform you should utilize. A nonprofit organization might require Financial Edge training as this technology is perfect for nonprofits. Looking for various tools for organization and accounting is imperative. Make sure you do training if it is available as you want to be able to use the technology to its full potential. You can even track which clients have paid and which need a bit of a nudge to do so. Automated follow-up emails can be used so a client does not take exception to being contacted to pay on time as this does happen with some.
Managing company finances can be a full-time job depending on the size of your nonprofit. Even if you don’t want an accountant in-house, there are even accounting professionals that freelance to earn additional income. You should consider all of your options before deciding to take this on alone.