This year has zoomed by! If you’ve followed the recommendations from our Month-by-Month Accounting Checklist, then you should have ease in closing out the financial activities of the year. Remember, the goal of each theme on the checklist is to ensure well-maintained and carefully monitored accounting practices so you can hit your year-end financial goals. It really weighs very heavy on my heart when I see nonprofits struggling with their accounting processes, so I’ve laid out simple recommendations to boost your confidence and take your organization to the next level of accounting.
Now that we’re in the last month of the year, it’s a great time to EVALUATE your accounting practices. This primarily includes a review of what has worked well and what needs improvement. My recommendation is to start by evaluating your financial infrastructure.
Here is a simple way to beef up your accounting practices before the new year begins….
1) Take our Quick 7 - Question Accounting Evaluation and Rate your Success, then highlight areas that need improvement.
2) Review the primary components of your Accounting Policy Handbook and highlight areas that aren’t being maintained and/or need revisions
2.1 Roles/Responsibilities
2.2 Accounts Receivable (donations, sponsorships, grants, earned income, etc.)
2.3 Accounts Payable (invoices, bills, vendor payments, etc.)
2.4 Payroll
2.5 Credit Card Policies
2.6 Month-End and Year-End Close
2.7 Financial Reporting
Once you’ve reviewed your overall accounting practices, then recruit help from staff or board committee members to draft a plan of action. After you’ve created your plan, then let it rest for a bit and prepare a proposed revision to your Accounting Policies to be discussed and voted on at your next Finance Committee or Board of Directors meeting in 2020.
Do you need more inspiration? According to BoardSource.org, “Policies are the operational guidelines for an organization. Nonprofits should continually analyze their policies to identify any that need to be updated or changed.” So, whether you have an all volunteer team or a staff of 50+, you must “living accounting policies.” Don’t just store your policies away and keep it hidden until audit time.
Throughout this month, we’ll continue the conversation about “Evaluating your Accounting Practices.” If you have specific questions, I’m just an email away: star@npaccountingbliss.com
P/S If you don’t currently have clear accounting policies for your organization, check out this link to receive a common Accounting Policy Template.
