07/16/2024 | News release | Distributed by Public on 07/16/2024 08:20
As a grantmaker, you expect organizations you support to manage their awards effectively, accurately, and responsibly. Those same expectations should apply to the way your management and board handle your organization's finances. Does your entity have all the essentials? Here are some finance fundamentals that will enable your trustees and management to understand and address their accounting needs.
What's the easiest way to make sure things in the finance department don't fall off the radar? Use a finance calendar to keep everyone in the loop. Just as you expect grantees to meet their reporting deadlines, you want your team to stay on top of upcoming responsibilities.
Every finance calendar should include meeting dates, fiscal events, regulatory responsibilities, and other deadlines that are integral to your entity's financial health.
Meeting dates: Don't just include the ongoing board and finance meeting dates. Set aside dates for the board and management to review the annual budget, financial policies and procedures, the financial statement audit, and the Form 990 or 990-PF.
Fiscal events: Plan out due dates for fiscal activities such as payroll, bank, and credit card reconciliations. Your calendar should note your monthly close and financial reporting deadlines, and completion of the annual operating budget.
Regulatory responsibilities: Incorporate external due dates for regulatory items like payroll tax remittances, W-2s to employees, and 1099s to independent contractors. Be sure to list your Form 990/990-PF and business registration filing deadlines, and completion of your annual audit.
Other deadlines: Don't forget about renewal deadlines for your organization's medical plan and business liability insurance, as well as your worker's compensation audit and state charitable registration.
Tip! Claiming and regularly updating your organization's profile on Candid's GuideStar is a great way to enhance your visibility to potential donors, partners, and grant recipients. Not only will it provide an opportunity to showcase your entity's impact, but it can also connect you with a network of stakeholders in the philanthropic sector. Be sure to include this update on your finance calendar.
Help your board meet its fiduciary and fiscal responsibilities by providing members with the education they need to make strategic decisions and lead effectively. Here are three ways to provide valuable board training opportunities:
Tip! Contingency planning is a must. Make sure your board is aware of your entity's Disaster Recovery Plan and has been briefed on:
To provide board members and management with the information they need to make informed decisions, there are a few basic finance functions that your finance team should provide:
Tip! Even in small organizations, it is possible to successfully implement limited control over finance functions with involvement from an Executive Director, board members, or others outside of the finance department. For example, a board member might review the bank reconciliations or payroll reports.
Outsourced help can provide cost-effective access to specialized expertise and bring a fresh perspective to an entity's processes and procedures. Consider outsourced solutions when your organization needs support for a temporary or short-term project, to fill gaps left by retirements or transitions, or to ease the burden on a small staff. Plus, outsourcing can provide another level of internal control and minimize the loss of institutional knowledge that often occurs during turnover. Use outsourced help to:
Tip! One great use of outsourced help is to provide training on nonprofit financial reports for grant application reviewers. Not only will this help reviewers better assess the financial health of potential grant recipients, but it will also provide staff with a greater appreciation for your own entity's finance functions.
Ready to learn more about how your grantmaking organization can have more control of your finances? Check out our webinar, "Finance Fundamentals for Your Foundation."
Kerri Padgett bio:
Kerri is a CPA with over 20 years of experience working in the nonprofit industry and is the Content Manager for the national training department of Your Part-Time Controller, LLC (YPTC). She is a member of the AICPA's Not-for-Profit Section and has conducted educational sessions for the AICPA & CIMA Not-for-Profit Industry Conference, the Greater Washington Society of CPAs (GWSCPA) Nonprofit Symposium, as well as hosting national YPTC webinars, among other events. Kerri earned her dual master's degree in accounting and taxation from Drexel University and her bachelor's degree in fine arts from Arizona State University. She is a past adjunct professor for Drexel University's Antoinette Westphal College of Media Arts & Design, where she taught the importance of sound financial management to graduate arts students.
Your Part-Time Controller, LLC (YPTC) is a professional services firm that specializes in accounting and financial management for nonprofit organizations. Based on the level of services our clients need, we can serve as a bookkeeper, accountant, controller, or chief financial officer. YPTC serves nonprofits and foundations nationwide onsite or remotely. To learn more about YPTC and browse our educational content visit https://www.yptc.com/foundations-specialization/.