Race Around the Clock, No More! How to Use MIP for Fiscal Year-End Planning


Tick, tock, tick, tock, time is running out to close your financial books for the fiscal year, but what used to be a panicked race to the finish line is no more. With MIP Fund Accounting®, your organization’s end-of-year planning is simple.  

What Does Year-end Planning Look Like?  

When it’s time to close the books, nonprofits have a variety of factors to consider. Nonprofit growth can be incredibly complex. Your organization can’t just set a higher, new fundraising goal and figure out what you’re going to do with the money if you receive it, and you can’t plan on expanding programming without knowing where the funding will come from.  

Your organization needs to develop a long-term strategic plan and manage it on an ongoing basis. When considering the goals for your organization in the coming year, be sure to list the key activities that will take place to support your planned growth.   
Your year-end plan should:  

  • Align your budget with goals and milestones and use it as a roadmap for planned growth  
  • Diversify your growth strategy 
  • Evaluate strategies through a risk management framework    
  • Prepare your staff for growth and identify areas where you may need to add headcount or build out new skills for existing employees 
  • Strive for more transparency and properly communicate any coming changes 
  • Leverage technology to help scale and manage growth 
  • Get your board’s full buy-in on the goals, milestones, budgets, and tactics you plan to implement.  

Your nonprofit also needs to plan for contingencies. Come up with backup plans and options that address the risk of a significant discrepancy between incoming and outgoing funds. Your budget is a living document. Be sure you’re consistently adjusting to those discrepancies throughout the year. 

As an MIP customer, you can leverage your software to check your budget in real-time and create customized reports to find variances and make accurate forecasts for any segment of your organization—like a specific grant or department—over any period.  

Your year-end plan doesn’t only encompass your finance team. Your organization also needs to incorporate HR and other administrative tasks. Luckily, MIP makes that collaboration easy as well. 

The HR EOY Checklist   

Your organization’s employees are its most important assets. Because of that, your HR team has distinct EOY responsibilities it must address. These include:  

  • Creating a payroll schedule for the new year. With MIP’s payroll module, you can set up your payroll schedule ahead of time and implement it easily  
  • Conduct salary reviews   
  • Use the MIP HR portal to allow employees to update any of their withholding or benefits information. Read about the benefit enrollment process in our Knowledgebase
  • Plan for tax time. Are you e-filing? Do you have a service printing those forms out for you, or do you need to order those forms? MIP offers the forms through mipchecks.com, and if you are producing the tax forms with MIP, we guarantee those forms to fit in the software.  
  • Review the Knowledgebase for tax filing guides. MIP has guides for 1099, 1095, and W2 forms for your organization to follow.  

After your preparations, it’s time to close the books and see where MIP shines brightest.  

Closing the Books   

Closing the books determines your organization’s financial performance and influences how you communicate to external stakeholders. What used to be a hectic process is made simpler with MIP.  

Before you begin your year-end process, be sure to make backups of any critical aspects of your accounting, including a main backup of your database. This ensures that any mistakes can be corrected later.  

Follow this list to ensure you’re accurately closing the books:  

1. Start by reconciling cash and balance sheet accounts using the MIP Bank Reconciliation Module, balance sheet, and trial balance 

Ensure you have adequate documentation for accounts, proper schedules for depreciation and accruals, and any other information you need to uncover accounting errors that may be hidden on the balance sheet. Review key funding agreements and contracts to reconcile expenses reported and outstanding contract or agreement balances. Ensure that you calculate and transfer depreciation for your organization’s fixed assets.  If your organization processes multicurrency transactions, ensure that revaluations are processed for the closing year. Learn how to perform bank reconciliation

2. Perform a break-even analysis by combining statements of revenues and expenditures 

Break-even reporting provides a transparent view showing how the organization uses its resources as intended. Look at each funding source, program, and even department to uncover how it’s performing financially, so stakeholders can clearly understand where resources are being applied. Some areas, such as development, should deliver income far above costs; it will usually be the other way around for program areas. Learn how to combine statements of revenue and expenditures.   

3. Reconcile actuals to budget for grants and federal awards in the summary budget report 

To remain on good terms with grantors and regulatory parties, you must show how you’re spending grant money and spending all the money you should spend each year. Accurate schedules will demonstrate you’re spending money at the proper cadence (including for the years to come). At the same time, a look-back analysis will show precisely how grant dollars connect directly to their designated or undesignated program activities.   

4. Prepare a schedule for auditors in the expanded general ledger, posted general ledger, and transaction logs   

This ensures all your numbers equal what you reported to stakeholders and grantors. As with other types of reporting, you need to be able to show what the balances are and how they’re being spent—using figures that can be easily verified.    

5. Prepare year-end reports for stakeholders in the report binder  

Collate all figures necessary for year-end reporting for the board and your published annual report. It helps to have a checklist of reports delivered in previous years so you don’t inadvertently miss anything. If you discover any data is missing or incomplete, it’s vital to resolve those issues before presenting to the board.    

After you close the books, congratulations! Your organization has successfully completed another year. We know it was a good one, and with MIP we want to make sure you are always supported as you operate throughout the year and prepare for a new one. Visit the Knowledgebase for an array of resources for current MIP customers.  

Learn more about how MIP can help simplify your end-year planning. If you are interested in adding additional modules to MIP request a demo here.  

Share this post

Eric Oliver

Stay on top of the latest and greatest. Sign up now.

Email Signup