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Nonprofit Financial Health Check: Are You Prepared to Weather Uncertainty? 

MIP_Blog_Nonprofit Financial Health Check

Your nonprofit may provide services for thousands of people a year, but when was the last time you examined how you manage your organization’s finances?  

Your nonprofit must consider financial reporting processes and internal controls in financial reporting (ICFR), compliance with legal and regulatory requirements, risk management, protecting assets and providing proper financial oversight, and many other elements.    

Adding to that are the demands on your nonprofit to serve your beneficiaries. In an uncertain economic environment, meeting your mission can be difficult, but by examining your finances and accounting processes, you can ensure you’re doing everything you can to serve your community.  

Use the Right Software to Make Informed Decisions   

With an accounting system that’s equipped to handle the intricacies of nonprofit accounting, your organization’s decision-makers have the necessary analytics to influence the next move.   

This preparation checklist can determine whether your accounting software is right for your organization.  If you answer “no” to any of these questions,  request a demo to learn how to address these concerns so you can accelerate your organization’s sustainability and growth, and if you want to further assess your organization’s fiscal health, take our Fiscal Health quiz

When it comes to accounting capabilities:  

  1. Can I easily measure the performance of a program or activity?  
  2. Can I create reports for multiple fiscal years?  
  3. Can I track and report on encumbered funds?  
  4. Can I perform allocations of indirect costs by grantors?  

When it comes to reporting capabilities:  

  1. Is my organization prepared for an audit? Does our accounting software have internal controls and an audit trail in place?  
  2. Can I easily tailor reports for each funding source?  
  3. Does our current solution incorporate nonprofit-specific accounting rules?  
    • For example: How and when to handle encumbrances, how to report for donor-restricted and unrestricted funds, etc.  
  4. Can I easily manage and report on multiple budgets?  
    • For example, Original vs. Revised, board budget, operating budget, grantor budget, forecast budget, etc.  
  5. Can I easily see how money is tracked and budgeted?  
  6. Does our current solution integrate with the other software/tools we use?  
  7. Is our accounting software designed for our organization’s needs?  

As economic uncertainty looms, your organization needs an accounting system that drives actionable insights and influences staffing hours and supply spending. While revenues are increasing, so are operating costs. Do you know if your organization is maximizing its available resources?   

Your nonprofit needs an accounting system that features robust accounting and reporting capabilities and can present fiscal insights in an understandable and digestible insight for external stakeholders and your board. Your organization needs fund accounting software. Fund accounting software is designed for the nonprofit and education sector and accounts for intricacies that regular accounting software doesn’t account for.    

Fund accounting software built for the needs of nonprofit organizations:   

  • Allows for tracking of an unlimited number of accounts  
  • Accommodates infinite segments   
  • Grows with your organization through modular add-ons   
  • Creates FASB- and GASB-compliant reports   
  • Makes managing and reporting on multiple grant funds simple  

Growing Sustainably with Fund Accounting Software   

With fund accounting software, organizations can save time and work efficiently by creating unlimited budgets with built-in audit records and define the reports that show how your organization achieves its mission.  

Your nonprofit can stay competitive in this changing landscape by ensuring its finances are accurately reflecting the current state of operations. When it comes to meeting your mission and communities, minimize the resources needed to handle finance and accounting and ensure you’re doing everything you can to support the communities you serve.  

Learn how your nonprofit can operate more effectively through better reporting with fund accounting. Learn more today.  

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Eric Oliver

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