When Is The Best Time to Outsource Bookkeeping for Nonprofits?
One of the biggest pain points of 5015(c)3 nonprofits is to maintain timely and accurate financial records within their tight budget. They have to find methods that are more cost-effective but often also means that these methods used might not be as efficient.
Hiring an internal accountant is one thing, but outsourcing the accounting department as a whole is an entirely different ballgame. Outsourcing is a rather cost-effective solution – that much is no secret. However, not every nonprofit might be inclined to do it, especially ones who have found a volunteer accountant along the way.
Here are some indicators that you should keep an eye out for in terms of your nonprofit’s accounting department. When you start seeing these, it might be time to outsource your nonprofit’s bookkeeping functions.
Your Accountant Has Started to Google Accounting Entries
Your limited budget might mean that you either have a trainee bookkeeper managing your books or a volunteer worker. When you see that they are now starting to have trouble understanding some adjustments or entries, it might be time to outsource the department to professionals.
Feel free to ask the volunteer worker to stick around and learn, though.
No Competent Staff Member Is Overseeing the Department
A one-man department, especially the accounting department, is a recipe for disaster. One issue that is likely to arise is the fact that they will be overworked and constantly ask for more resources. Another problem you will face is when the accountant gets ill, quits, or needs to leave for a wedding.
You Are Starting to Scale
A scaling nonprofit means there are a lot of moving parts behind the veil driving the nonprofit. Remember, it’s not just about income and expenses with nonprofits. At one point, your accounting department is going to be hit with compliance and administrative notices as well. In this situation, you will have no option but to create a robust internal department (quite expensive) or outsource it all.
If you see either of the above signs or all of them, consider finding a reliable and experienced nonprofit accounting and bookkeeping service. Good Steward Financial Company invites you for a free consultation session where we can discuss prospects and find a cost-effective bookkeeping solution for you. So, get in touch today!