Posts tagged with "bookkeeping"

Best Practices for Financial Policies and Procedures

It is important that Nonprofit Organizations have a financial policies and procedures manual.

If you have not updated your financial policies in a while or don’t have a financial policies and procedures manual, our firm can help you develop or update your financial policies and procedures. An organization with good financial policies and procedures benefits from operating efficiencies, clear expectations, financial accountability, and training.

A financial policies and procedures manual is important for the following reasons:

  • Improving your operation
  • Document bookkeeping
  • Document control environment
  • Document control procedures
  • Document accounting system.
  • Lay out clear expectations
  • Grant compliance
  • Staff training

The financial policies and procedures manual should improve your operation by documenting policies, processes, and procedures to encourage timely and accurate information. A manual can minimize resource drain and fraud areas by improving and automating systems and processes.  The manual can serve as a checklist for major financial activities that need to occur within the finance function. The manual can serve as communication and training for finance staff and others within the organization. The manual should be updated to reflect your accounting system and software and how it supports the organization.

The manual should document your bookkeeping. The bookkeeping should document what is required source documentation to support the required accounting. The bookkeeping should document how the accounting system and software is to be used and maintained. The bookkeeping needs to discuss and implement an effective filing system.

The manual should document your control environment. Your control environment includes the following:

  • Organization Structure
  • Philosophy and Operating Style-Tone from the Top
  • Personnel Policies and Procedures
  • External Influences
  • Board, Finance, and Audit Committee Oversight
  • Authority Defined
  • Performance Monitoring and Follow Up-Monitoring Controls

The manual should document your accounting system. Your accounting system should do the following:

  • Record Transactions
  • Record Timely and Accurate Information
  • Proper Period Reporting
  • Disclose Accounting Events
  • Involve Program Staff
  • Maintain Audit Trail

The manual should lay out clear expectations, ensure grant compliance, and provide staff and program training. The policies need to document board and staff responsibility and accountability, segregation of duties, safeguarding assets, personnel integrity and competence, and inherent limitations.

We need to ask the following key questions for control procedures: what errors or irregularities could occur? What procedures would prevent or detect such errors or irregularities? Are controls procedures in place and effective? We would suggest you review each of the major finance areas to include cash receipts, cash disbursements, and payroll.

We would like to suggest the following areas are essential policies.

  • Cash Receipts and Revenues
  • Billing, Accounts Receivable, and Grants Management
  • Cash Disbursements and Expenditures
  • Purchasing, Accounts Payable, Travel, Credit Cards, and Debit Cards
  • Payroll and Human Resources
  • Audit
  • Budget
  • Financial Reports
  • Record Retention and Destruction

We would suggest the following areas as optional policies

  • Board, Finance, and Audit Committees
  • Governance Policies including Conflicts of Interest, Whistleblower, Gift Acceptance, and Code of Conduct.
  • Other policies would include a chart of accounts, general ledger, and technology

It is important that you take the time to document your financial policies and procedures. The purpose of this knowledge article is to develop or improve your current manual with these best practices for financial policies and procedures.

You can download a FREE Sample Nonprofit Organization Financial Policies and Procedures Manual from our resource documents page.

 

 

FTM Nonprofit Forum for July 25, 2018 – Overlooked Benefits of Outsourcing Nonprofit Accounting

Overlooked Benefits of Outsourcing Nonprofit Accounting                                                                                                              Register Here

Has your organization ever looked at outsourcing all or a portion of its accounting?  If not, it is because you’re not sure how the organization would benefit from this decision.  Since it is not a common practice for nonprofits to outsource its accounting, we will discuss the process and discuss the overlooked benefits of outsourcing your Nonprofit Accounting.

In the nonprofit community, outsourcing typically means long-term delegation of key operation to outside experts.  The accompanying expectation is improvement of the quality, strengthening effectiveness, and lowering or controlling costs.

A key difference in the nonprofit sector is not only controlling costs, but becoming a more effective organization.

Outsourcing accounting provides nonprofit organizations with a team of experts who have multiple client experiences which benefits its clients and the nonprofit organization’s it serves.

We will review six overlooked, and sometimes unknown, benefits of outsourcing nonprofit accounting.

This webinar will help Executive Directors, Finance Directors, and finance staff to develop and use a financial policies and procedures manual.  Savvy nonprofit leaders know that effective financial policies and procedures that lead to effective processes can be the difference between good and great performance.

We will answer this and more.  We will review and provide you with a candid conversation of the benefits and disadvantages of outsourcing nonprofit accounting.

Immediately following the presentation on benefits of outsourcing nonprofit accounting, we will host a discussion on how to have the best possible accounting system.                                                                                                                                                                                                            Register Here