When it comes to protecting your nonprofit assets and meeting your nonprofit compliance requirements, bank reconciliation is a key tool in ensuring the protection of your nonprofit’s assets. For nonprofits and organizations, automating monthly and yearly bank reconciling is a huge timesaver as opposed to manual reconciliations.
As this article from Jitasa Group notes, “Bank reconciliations can be done manually or using automation, consisting of flagging transactions that don’t match up. Automating is helpful because it allows you, the human, to spend your time only investigating the parts that don’t match up. This is especially helpful if you have multiple bank accounts. By automating part of this process, you’ll give your accounting staff more time to dive into the tricky stuff.”
Nonprofits depending on size can have several different accounts that need reconciling. These might include payroll, investments, checking accounts, revolving credit and loans, grant funds, and annual fund accounts. Reconciling bank statements on a regular basis allows for mistakes to be more quickly found and corrected, so your data for reporting is the most accurate.
MIP’s bank reconciliation module, part of our core bundle, makes it easier for reporting and real-time tracking of costs, revenues, and assets. Reconciling different accounts manually with spreadsheets can create an environment prone to data errors or mistakes. Using automation for reconciling helps ensure data integrity and gives users a real-time view of any account during reconciliation for cross-reviewing accounts.
Using MIP’s reconciling capabilities allows organizations to quickly and easily designate which cash transactions recorded in their General Ledger have cleared the bank and verify that their book balance net of uncleared items matches their statement balance.
By reconciling your accounts payable and accounts receivable data each month you can clearly see in every account your real-time financial position. This helps you plan for what-if scenarios as well as see where funds can be shifted to a different account if needed. Reconciling all your accounts on a monthly basis also helps reduce opportunities for fraud. And, if you have a large staff managing different accounts or budgets, then setting up firm dates for invoices due and payables due as part of your reconciliation efforts can also save valuable time by ensuring all needed financial data information is in on a timely basis.
With MIP’s bank reconciliation, users can manage an unlimited number of accounts., and record un-reconciled differences as Suspense items until they can be researched. Additionally, there are multiple comprehensive reporting options. Bank reconciliation data is automatically updated in the system as part of the posting process, enabling immediate reconciliation of cash items originating from any core MIP module.
Reporting through automation is expedient and more transparent. Using fund accounting software users can see a significant reduction in manual work hours creating reports through automating customized reporting for grant funders, donors, and your governing boards as needed.
For an additional resource on bank reconciliation, you can also go to our post Understanding Nonprofit Bank Reconciliation.
If you’re interested in how MIP can automate many of your manual accounting processes, please register for a demo.