Running a non profit organization is challenging. Executive Directors usually prioritize core operations over tedious accounting tasks. Plus, the accounting rules can be overwhelming.
However, access to timely, accurate financial data is critical to your organization’s success. Could outsourcing accounting tasks to a third-party provider be a smart decision? Here are five reasons why the answer might be a resounding “Yes!”
1. Lower costs and scalability
Your organization could hire a full-time accountant, but the expenses of hiring an employee go beyond just his or her salary. You also need to factor in benefits, payroll taxes, office space and equipment. It’s one more employee for you to manage — and accounting talent may be hard to find these days, especially for smaller organizations. Plus, your access to financial data may be interrupted if your in-house accountant takes sick or vacation time — or leaves your company.
With outsourcing, you pay for only the services you need. Outsourcing firms offer scalable services that you can dial up (or down) based on the complexity of your organization at any given time. Outsourcing also involves a team of accounting professionals, so you have continuous access to accounting services without worrying about staff absences or departures.
2. Enhanced accuracy
Do-it-yourself accounting can be perilous. Mistakes in recording transactions can have serious consequences, including tax assessments, cash flow problems and loan defaults.
Professional accountants are trained to pay close attention to detail and follow best practices, minimizing the risk of errors. Outsourcing firms work with many organizations and are aware of common pitfalls — and how to steer clear of them. They’re also familiar with the latest fraud schemes and can help your nonprofit detect anomalies and implement accounting procedures to minimize fraud risks.
3. Expanded access to expertise
The accounting rules and regulations continually change. It may be difficult for you or an in-house accountant to stay updated.
With outsourcing, you have experienced professionals at your disposal who specialize in accounting. This helps ensure you comply with the latest rules and accurately report financial results. In addition, as you encounter special circumstances, you can quickly call on other professionals at the same firm who can help manage the situation. If your provider lacks the necessary in-house expertise, the firm can refer you to another reputable professional to meet your special needs.
4. Improved timeliness
Timely financial data helps you identify problems before they spiral out of control. Outsourcing professionals typically use cloud-based platforms and set up automated processes for routine tasks, like invoicing and expense management. This improves efficiency and gives you access to real-time financial data to make better-informed decisions.
5. Reliable security protocols
Cyberattacks are a serious threat to any business. Stolen data can lead to monetary losses, operational downtime and reputational damage.
Many organizations are understandably cautious about sharing financial data with third parties. Reputable outsourced accountants use advanced security measures, encryption and secure software to protect your financial data and client records from hackers. However, not all providers have the same level of security. So, it’s essential to carefully vet outsourcing firms to ensure that your company’s data is adequately protected.
Work smarter, not harder
At any given moment, nonprofit leaders and their stafff are being pulled in multiple directions. Outsourcing your accounting helps alleviate some of that stress by ensuring your financial records are up-to-date, accurate and secure. Contact us for more information.