By Jim Simpson, CPA and director, Financial Technologies & Management |
In 2013, over 1.5 million tax-exempt organizations in the U.S. reported $1.74 trillion in total revenues and $1.63 trillion in total expenses, according to the National Center for Charitable Statistics. That means nonprofits are responsible for reporting and tracking all that financial information.
In September, Abila, a nonprofit software company, set out to understand this current financial landscape and interviewed 350 nonprofit finance professionals. Specifically, they wanted to:
- learn about the day-to-day challenges facing nonprofit finance professionals
- define emerging trends in fund accounting and technology
- apply how trends and challenges differ based on the organization
Nonprofit boards and leaders should pay careful attention to the Nonprofit Finance study. The study reveals that the trends are for smaller, leaner finance teams and the importance for leaders to improve the finance department by implementing more efficient software products and processes.
Finance teams staff feels too many of their limited resources are spent on day-to-day activities, and not on more important strategic and planning activities. A typical finance team says they spend significantly more time than they would like in the following areas: helping other departments, month-end-closing, financial reporting, grant reporting, bookkeeping, accounts payable, accounts receivable and payroll processing. Their preference would be to spend more time with strategic and planning activities including strategic accounting, financial analysis, budget planning, and board engagement and development department activities.
Here are some key findings and study recommendations for how you, as a nonprofit finance professional, can overcome similar challenges.
- Interruptions are common:It would help if other departments would schedule collaboration times and learn to self-manage their finance role to minimize interruptions to the finance department.
- Nobody is above the basics:Nearly all financial/accounting professionals continue to be involved in the day-to-day activities of the organization. This is reflective of a trend towards smaller, leaner finance teams.
- Funding is (obviously) key:Organizationally, finance/accounting professionals identify long-term sustainability and finding new funding sources as the biggest challenges.
- Embracing the cloud:Larger organizations are moving to the cloud quicker, and see greater value and benefit to cloud-based software. Overall, most of the respondents see the cloud as beneficial, with security being the biggest area of concern.
- Finance/accounting professionals want to focus more on strategy:By and large, respondents spent much of their time focused on either running reports or preparing for monthly presentations, and would like to spend more time on strategic and budget planning.
The full study is available for download at: http://www.ftmllc.com/training.html
Jim Simpson, CPA and director of Financial Technologies & Management, is a financial leader and trainer, Software Advisor, CFO advisor, controller and forensic accountant to nonprofit organizations since 1999, serving over 350 nonprofit clients. He has worked as a CFO, controller and software advisor for over 25 years.
Contact Financial Technologies & Management to learn how our firm can improve your organization’s financial management operations and capacity. You can schedule an appointment directly from the website at WWW.FTMLLC.COM, or email firstname.lastname@example.org; or phone at 317-819-0780.