Compliance, Fund Accounting Solution, MIP Cloud
It’s Always Compliance Season: Crafting Compliance in the Cloud
It’s Duck Season. Rabbit Season. Duck Season. Rabbit Season. No, it’s Compliance Season, and we’re here to show you how cloud-based software simplifies nonprofit compliance.
When nonprofit organizations want to increase compliance, look no further than the cloud. The cloud makes nonprofit compliance simple and has several other benefits as well.
How Your Nonprofit Can Stay Compliant
While audits occur seasonally, your organization needs to stay compliant year-round to make the audit process go smoothly. There are several things your organization can do to ensure it remains compliant.
Relying on and utilizing internal controls and software that features a complete audit trail demonstrates that you take compliance seriously and your organization is a good steward of funds.
Your organization must consider how cybersecurity affects compliance as well.
Cybersecurity Policies and Compliance
Now is an excellent time to analyze your organization’s cybersecurity policies. As you’re evaluating your policy, consider the role your accounting software plays. MIP® Cloud accounting software is built with cybersecurity considerations in mind. Here are a few considerations MIP Cloud offers as you are evaluating your cybersecurity policies:
Multi-factor Authentication (MFA)
- MFA increases the safety of a system’s data by requiring the software user to enter a unique code after logging into the system. MFA only grants users access to the system after they enter a code sent to them via text or authenticator app.
- MFA gives your organization the peace of mind of adding another step to deter unauthorized users from accessing your information.
- MFA helps prevent hackers from getting into your organization’s system and stealing sensitive data. MFA also represents a critical step toward data privacy and security regulations compliance.
Overlapping, Offsite Servers
- 24/7 Cloud Access. With MIP Cloud, your organization no longer needs on-premise servers to house its data. That means in the event of a natural disaster, you can access your fund accounting system wherever you have internet.
- Zero downtime for updates. Being in the cloud means you no longer need to worry about updating or backing up your software. With MIP Cloud, you’ll receive regular notifications regarding updates and come tax season, you’ll find it particularly beneficial because MIP is regularly updated to reflect the latest national and state tax guidance so you can stay up-to-date.
- Executive Use Licenses. Your team, and auditors, can have access to MIP anytime, anywhere with MIP Cloud.
Your organization also can realize cost savings when it moves to the cloud. By no longer needing to maintain physical servers or update and back up your data, your organization could scale down your IT team or have them work on other pressing matters.
What are SOC Reports and Why Do They Matter?
When moving to the cloud, you’ll want to ensure your organization is picking a provider that follows industry standards for IT compliance. Your provider should provide a SOC report. This report explicitly evaluates the effect of internal controls at the service organization on the user entities’ financial statements.
There are four main types: SOC 1, SOC 2, SOC 3, and SOC for Cybersecurity, with subsets of each. The focus of the examination is the most significant difference between a SOC 1 vs. SOC 2 report. A SOC 1 report focuses on outsourced services performed by service organizations that are relevant to an organization’s financial reporting.
Also, when picking a provider, reach out to your insurer to get other needed compliance documents. You may even get a discount for meeting specific security criteria.
Organizational Compliance and Internal Controls
Internal controls are a crucial part of compliance. They allow your organization to control who can access and edit your organization’s financial data. Internal controls provide peace of mind and offer other benefits, including:
- Identifying and flagging anomalies
- Allowing you to easily check balances which acts as a fraud deterrent
- Easily accessing information in case of audit
- Segregating duties using user control restrictions that gives granular control over how your personnel access financial systems
- Having a fully auditable general ledger
- Automating business rules to reduce the likelihood of errors and fraud
- Clearly classifying restricted and unrestricted net assets (this is set by your segmented structure set up during implementation)
- Quickly generating profit and loss statements and other reports for individual grants
- Ability to monitor operations
When it comes to fraud, although internal controls can help effectively reduce the likelihood of fraud, it’s also essential your organization develops and actively communicates an internal policy for employees to be able to report fraud. All nonprofits are required to have such a policy in place. Having a traceable audit trail, lets you see every change to your organization’s financial information. It would document where fraud occurred.
If your organization is looking for more help with using MIP for audits, How to Maximize MIP for Audits features several helpful tips, and offers links to the MIP Knowledgebase that provides useful information on using MIP 24/7. MIP also supports Executive Use Licenses that allow your organization to give access to its financials to an auditor to in a view only mode. It keeps your data safe, while letting the auditor see the information they need.
Don’t just take our word for it. The Community Action Partnership of Central Illinois (CAPCIL) serves low-income families and senior citizens of Central Illinois. CAPCIL’s leaders knew that having their fund accounting software on the organization’s server made them vulnerable to loss in the event of a catastrophe, so they turned to MIP Fund Accounting in the cloud.
With MIP Cloud, CAPCIL’s data is hosted in a professionally managed, SSAE16-compliant data center for superior server performance, scalability, and security. Additionally, the cloud solution eliminates the burden of deploying, maintaining, backing up, and upgrading hardware and software. Learn how CAPCIL is using MIP Cloud today.
Over 11,000 users on MIP Cloud, accounting for more than 30% of our nonprofit organizations. MIP Cloud makes it easy for organizations to monitor fraudulent activity and to ensure they are staying compliant all year round and prepared for anything whether in case of a disaster or audit. Ready to move to the cloud? Schedule a demo.