I really want you to reconsider today’s area of nonprofit staffing. Don’t worry about what you’ve always done in the past, what other nonprofits are doing, or what is comfortable for you. It doesn’t help to have a huge vision if you don’t create a sustainable organization. Every episode I produce is to help you take one more step toward sustainability.
Are you ready to deep dive into a core area of your ministry?
Do any of your bookkeepers or accountants interface with members of your community? I mean, on a high level or with strong leadership. If you didn’t answer that question with a resounding yes, it’s time to explore outsourcing accounting. I NEVER advocate removing someone from your team just to save a buck, but if you find yourself in a position of restructuring or growth, it’s perfect timing.
I’ve heard dozens of stories of church embezzlement and while we’d all like to assume people would never do that to a church, it continues to happen. There are many safety measures and checks and balances you can implement, especially spreading out duties related to mone.
Consider This Scenario
You’re a small organization with an even smaller staff budget. The person who answers your phone, uploads your latest sermon podcast and schedules Kids Ministry volunteers knew how to balance their own checkbook so you decided to have them oversee your church’s Quickbooks account.
You just know this person is so honest and trustworthy, so they oversee counting checks and cash that comes in, handling the deposit, plus they are the primary check signer because you are focused on daily ministry demands.
Unfortunately, this is a recipe for disaster in many situations.
Nonprofit Risk Management
At the very least you need multiple people with visibility into each step of your accounting processes. Bringing in someone from the outside will give you the expertise and proficiency to navigate nuances of being a 501c3 organization. The IRS is not an entity you want to mess with.
An expert will be knowledgeable AND responsible for adhering to all legal guidelines. And they can do it much faster than the sweet person who has to google or youtube every transaction in quickbooks. That factor alone typically saves you money and allows your team members to stay focused on areas that are more their sweet spot.
Accountants can analyze data in ways that uncover trends or patterns in your ministry. It can be income, expenses, or forecasting. They can compile and prepare intricate reports to help you answer questions of all types about season giving or fluctuations that you can tie to various events within the organization.
You owe your donors an accurate reporting of the funds THEY gave you. You are also on the hook to be a great steward of money for which they worked hard and chose to give you. Creating nonprofit systems of accountability and stewardship will go a long way in building trust with people who are generous with your mission and believe in what you are doing.
Numbers don’t lie and you might believe your nonprofit business is doing well (or maybe not so well), but good reporting will bring clarity and help you strategize for the future. Outsourcing your nonprofit accounting, like most freelance positions, is a la carte. You have the choice to let an outside accountant do 100% or you may even have them perform a monthly check and simply prepare quarterly board reports or something similar.
Scaling is one of my favorite benefits of using contractors. You can ramp up services or pull back in times of economic challenge.
There can also be disagreements in use of funds if you have an internal accountant. They are typically very conservative and although they support your church they might not be on board with ministry expenses, creating friction for the leadership. Every ministry needs people who will question stewardship of funds, but that can easily come from people who are on the frontlines of ministry.
If you don’t have periodic financial audits performed, a good accountant can examine the health of your processes, security and position. It’s like going to the doctor for a wellness check. You may discover that everything is fine, but it’s better to be safe than sorry. Nonprofit management includes accountability to all affected parties and regular audits are one way to navigate this.
As with all freelancers, you still need someone to oversee a contract accountant. They may not be completely proficient in finance and accounting, but they should understand running a business, be able to be the bridge between internal stakeholders and the accountant, and be quick to learn an overview of the accounting system and language you need to understand your ministry.
Please consider the exposure of your nonprofit organization if you do not currently have a well-thought through structure for your accounting. Reach out to me or to one of many nonprofit-focused companies who provide services like this to help you analyze and meet your needs.
I would love to help you assess your current processes and ensure that you are protecting yourself and your assets. CONTACT ME here and let's set up a time to talk.