Audits & Fiscal Management: Ughhh or Yay?!
In our experience, most professionals start working for a nonprofit because of the frontline work of working with people and policy. (*Even if you don’t work for a nonprofit, trust us - keep reading. This post applies to all types of organizations.) When we began our journey of working for and with communities, this drove us too. But, as we gained experience, the administrative and strategic elements of the job became more of a priority. And, as time goes on and one gains experience in a nonprofit career as a nonprofit leader, most discover there is one single end point: funding.
Fundraising is essential for nonprofits and the bottom line is most seasoned nonprofit leaders are focused squarely on this reality. But, what happens when you get your first injection of sustainable funding? Or, what is the core element in the maintenance of those vital dollars you’ve worked so hard to raise? For all types of organizations, financial management goes hand in hand with raising capital, but is often the forgotten element. Let’s face it, it’s the boring part of running an organization! But, not only is fiscal management imperative especially in making sure you don’t go over budget, but it can also help you build on your financial goals.
So much of financial management boils down to the often-dreaded audit. These are official inspections of an individual's or organization's accounts, typically by an independent body. For an organization it comes at a substantial cost – at the lowest, in the range of $3000-$5000/year.
Audits can be tedious, nerve racking and expensive. However, as you gain success, they are an inevitable aspect of the advancement of your fundraising goals. They provide an objective perspective on the financial health and potential for future success of your organization. But, the secret to audits and even fundraising to some extent, is the organizing and maintenance of your funds. The central component to accomplishing these elements of fiscal management is the sound maintenance of your books. And in this day in age, the old fashioned dusty book in the back of an office no longer exists. There is really only one solution to maintaining the books, especially once your organization grows to a certain size - the utilization of a digital service.
Currently there is no better product for this than Quickbooks. It is designed to be easy to use for organizations of all sizes. And if you also have aspirations to scale, Quickbooks will grow with you. Most importantly, it has the power to generate reports and diagnostics that allow you to manage your finances and communicate this to vital members of your team and, of course, the all-important Board of Directors. Also, as mentioned, it is imperative that you have well maintained books in order to be audited, for your audit findings to produce positive results and to ultimately utilize it as a tool to fund raise. In some cases, especially with government contracts, a positive audit is needed to even submit a proposal.
So, although audits can be daunting, you should be proud that your organization is healthy enough to benefit from one. And, you should take advantage of this fact. Just like anything, the first step is always the hardest. So, get your books in order now! Also, make sure to check up on our posts as later on we will be exploring in more detail the different packages that Quickbooks offers, as well as some alternative products. And, to get notified directly about our posts or to directly ask us any questions on our experiences with audits or fiscal management, become a member for free by signing up for our email list!