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3 Ways Your Current Accounting Process is Costing You Money

The struggle is real. Every day we learn how to improve and refine our skills, but there are a few key accounting processes that contribute to major inefficiencies and it is COSTING YOU MONEY.

Lack of Process

Many organizations hit the ground running from the time that first check clears and there is no master plan—if there is it is usually very vague and only includes monetary benchmarks and goals. The organization is comprised of valuable team members who make up departments that run as lean as they can for as long as possible. These organizations that strive to be a steward of their donors’ funds, do not properly plan for increased workload and complexity of time and achievement and as a result, might find that they are not structured for scalability or sustainability.

Without a plan for growth, it is costing your organization dearly and where it counts—the pocketbook.

Clearly defined goals and progression towards them is a winning strategy. This includes employee development, promotional schedules, communicating job descriptions and expectations in addition to the organization’s goals.

I once worked with an organization that struggled with the vendor management aspect of accounts payable and there was a trickle-down effect that caused the entire process to break. As a result, their communications with vendors were sporadic, methods of payment were inconsistent, vendor agreements were not standardized, validated, or filed in a shared space. As a result, chaos.

Major Inefficiencies

Don’t you love spending time doing the same thing over and over? Especially when you know you could have done it once and been done with it if you had all of the right information? That is what your team thinks about too. There are major inefficiencies when you’re not enabling your team to work via a streamlined and documented process.

Email servers serving as project management tools? Manual tracking in Excel? Poorly formatted file exports? New solutions with APIs that do not sync with existing technology? Lack of proper planning makes it difficult to do business in a way that is organized.

Inefficiencies cost you money—not only because you are not performing at your optimal level, but because without some basic structure, you are limiting growth and as a result, future funding. Before you know it, you hit a growth ceiling because you have all of these activities happening at once without proper coordination and management. These can be fixed with a little forethought and a lot of application when it comes to processes, communication, tools, technology, and empowerment.

Reluctance to Embrace Tech

Tech can plug gaps. By incorporating the proper tools you can:

  • Enhance or in some cases replace certain staffing roles

  • Help employees work faster

  • Respond quickly to audit requests

  • Prepare documentation and data for funders and donors

  • Receive additional funding because of turn-key solutions

Readily available data and tech solutions means the organization does not have to spend days creating technical workarounds or manual data manipulations and assembling visually appealing reports. Wouldn’t this help your nonprofit?

Your ability to provide transparent financials when asked, have a seamless audit, and avoid burnout are all a result of day to day financial management. Scrambling is an inefficient option, and a costly one if you are not prepared when funding opportunities come your way. Some opportunities you do not want to miss, and others you cannot afford to miss. Sometimes these are once-in-a-lifetime opportunities and could make or break your organization.

If you are comfortable with how much your current process is costing you, maybe it does not matter, but for all of the organizations I have worked with, every dollar counts. So don’t forfeit the funds if you do not have to. By not streamlining the management of your financial operations, it hurts more than it helps, and you are losing money in a race-to-the-bottom.

Let’s get off that track.

If you want your nonprofit to thrive, you need formal structure. Fragmented processes, staffing inefficiencies and avoiding technology is the OLD way of doing things. Embrace the new so that you can continue to achieve your mission.

If you need to gain better control of your organization’s finances, book a call today.


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