Bookkeeping, when talked about by ministry leaders, is not something that engenders excitement and vision. Although crucial to the efficient operation of ministries and churches, it is not a skill set that ministry leaders take the time to fully understand. Managing donations, ensuring that money is allocated correctly and managing the day-to-day operations can quickly lead to an untenable position for any leader, even if that leader has a basic understanding of the broad strokes of bookkeeping. Churches and ministry nonprofits, alike, simply are not able to hire another staff person to handle the bookkeeping. But, like any smaller enterprise, ministries have a worthwhile solution: outsourcing their accounting to an experienced accountant. Here are six reasons why every nonprofit organization should consider outsourcing their books.
Often, non-profits employ a part-time accountant or roll it into other responsibilities of a full-time employee. It is a method used across the country in organizations of all sizes. But is it really your best bet to get accuracy in your financial reporting? Outsourcing your books means far fewer mistakes in general. You will know your financials are maintained by someone following generally accepted accounting principles (GAAP)
Additionally, with a professional accountant, accuracy means you will not miss important deadlines, donations will be correctly categorized and up to date. Most ministries have multiple programs running simultaneously, so keeping donations and designated funds organized can be a hassle. A trained, experienced accountant will make sure that when you access your financials, you have balanced and clear reports.
Advice & Experience
A key advantage of outsourcing your accounting is the experience and advice you will obtain. By hiring an experienced accountant, you know your books are being handled by someone who has managed financials for like-minded organizations. Choosing an accountant who specializes in nonprofits will also provide more specific financial information for your business. They can provide a non-biased opinion on critical financial issues. An experienced accountant will not just be able to organize your books but will be an objective partner in helping your ministry succeed.
SAVE TIME AND MONEY
Every leader wishes they had more time in the day. Do not spend valuable hours worrying about tracking finances. An outsourced bookkeeper means you can focus on what you are called for, the day-to-day work of ministry!
Outsourcing your financials ministries significant time and resources. As the leader of your organization, time spent working on the books is time that could be better spent growing your donor base and reaching more people. Your accountant will save you hours weekly. Meetings with your accountant will highlight key trends and issues that will allow you to make better decisions moving forward.
Having a dedicated accountant working with your nonprofit means you will not have to worry if your employees come and go. Make sure your ministry has stability so you won’t have gaps in knowing where you are financially. If that person moves on from the organization, you will now have to train someone from scratch who has no knowledge of the financials. An experienced accountant will not only be able to get up to speed quickly when they begin working with you, but can be a partnership that lasts for years, saving you training and hiring costs.
Improve Financial Processes & INTERNAL CONTROLS
Hiring an accountant also allows you to improve your financial processes. All organizations need regular financial statements, but accountants can generate a variety of reports, tracking purchases, sales, payroll, assets, liabilities, and any other transactions you have in your church. A professional will also bring their online tools to your ministry, allowing you to be included in the process and be able to check financials 24/7.
Remember, stewardship is the name of the game, and internal controls to help with transparency and acumen goes along way. How do you collect, organize, and categorize credit card receipts? Are there processes and policies in place to monitor and control spending by staff? These areas are often overlooked because of the high trust relationships involved, but left unchecked, can also damage the reputation and trust of donors.
Fraud & Risk Prevention
Lastly, an experienced accountant can help prevent fraud and lower other financial risks from affecting your nonprofit. The news is filled with stories of misused funds from charities and other 501c3 groups. With a high degree of trust, many nonprofits are targets for scammers. Your accountant will not just track income and expenses and look out for irregularities, but they can also identify when donations have been misallocated. This ensures that rent or mortgage (as well as other expenses) are covered, as well funds set aside for growth. A professional accountant will also show that you are protecting your donors’ contributions and help protect staff from false allegations.
Your nonprofit can save valuable resources when you outsource. Most nonprofits cannot afford to hire a full-time in-house accountant. Meanwhile, hiring someone part-time or having another employee juggle multiple roles wastes time and can lead to mistakes. By outsourcing, you are avoiding both issues while maintaining peace of mind that your books are being handled correctly.
Alliance Bookkeeping is a professional service offered by the Christian Ministry Alliance and is overseen by a licensed CPA. Contact us for more information or visit our professional services page to learn more.
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