Benefits of Outsourced Accounting for Your Nonprofit
January 15, 2025
At a glance
- The main takeaway: In today’s fast-paced business environment, companies are constantly looking for ways to streamline operations and improve their resources.
- Impact on your business: One area where significant efficiency improvements can be made is in accounting – outsourcing accounting functions has become a popular choice for businesses of all sizes, particularly those managing grants or involved in non-profit work.
- Next steps: Reach out to Aprio’s Nonprofit team to learn how to streamline your financial processes, make better-informed decisions, and ultimately, improve the overall success of your organization.
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The full story:
One area where significant efficiency improvements can be made is in accounting – outsourcing accounting functions has become a popular choice for businesses of all sizes, particularly those managing grants or involved in non-profit work. In this article we explore key benefits that can help you achieve your goals with outsourced accounting.
Cost savings: A smarter way to manage finances
One of the most compelling reasons to outsource accounting functions is the potential for substantial cost savings. Here are three factors that show how cost savings can help manage finances:
- Lower Overhead Costs: Maintaining an in-house accounting team can be expensive, with costs for salaries, benefits, office space, and training. When the accounting team is outsourced, business owners only pay for the services they need, without the burden of managing employees or overhead costs.
- Access to Proficiency Without the Price Tag: Outsourcing gives access to highly skilled professionals and state-of-the-art accounting technology without the hefty fees. These professionals have the knowledge to handle complex financial tasks, ensuring accuracy and compliance while freeing up resources to focus on core business operations.
- Scalable Solutions: As a business or project grows, outsourced accounting firms can scale their services accordingly. This flexibility enables to avert the fixed costs associated with hiring full-time accountants or expanding an internal team.
Transparency: gaining clear insights into financial operations
Transparency is essential for businesses and organizations that rely on grants or donations, as stakeholders need confidence in how funds are being managed. Outsourcing accounting guarantees greater transparency by providing:
- Real-Time Financial Reporting: Outsourced accountants use advanced software to deliver real-time financial reports that are accessible anytime. This transparency enables business leaders to make informed decisions based on accurate data. For grant management, it is important to know how every dollar is spent, and outsourced accounting helps provide this insight.
- Centralized Data: Outsourcing accounting centralizes all financial data in one place. Cloud-based platforms offer easy access and detailed reports that help stakeholders track expenses and income efficiently. Whether a detailed grant expenditures or general financial information is needed, everything is well-organized and readily available.
- Ensuring Compliance: An outsourced accounting firm guarantees the business or non-profit organization is compliant with all relevant laws and regulations, particularly in areas like tax reporting and grant usage. They can help track where every penny goes and guarantee that funds are being used appropriately, reducing the risk of errors or fraud.
Accountability: building trust and confidence with stakeholders
Outsourcing accounting can help reinforce accountability, especially when it comes to handling grants or donor funds. It adds an additional layer of oversight, ensuring that financial processes are being conducted ethically and responsibly.
- Segregation of Duties: Outsourced accounting services can implement best practices for segregation of duties, minimizing the risk of fraud. The use of a third-party provider adds an extra layer of independent oversight, refraining from conflicts of interest and reinforcing ethical standards.
- Regular Audits and Reviews: A reputable outsourced accounting firm will conduct periodic audits to guarantee the accuracy of financial records. This not only helps maintain compliance but also provides additional accountability. For grant management, it’s important that funds are used for their intended purposes. Regular audits help identify discrepancies, irregularities, or inefficiencies that may otherwise go unnoticed.
- Clear and Transparent Communication: With outsourced accounting services, there’s a continuous flow of information, and all transactions are properly documented and communicated. Stakeholders can review these records to guarantee that financial practices align with their expectations. By having a transparent relationship with an outsourced accounting firm, businesses can build trust and demonstrate their commitment to financial accountability.
Grant management: streamlining the financial side of grants
Managing grants can be a complex and time-consuming process, especially when it comes to tracking funds, ensuring compliance with donor guidelines, and meeting reporting deadlines. Outsourcing accounting services can simplify this process in several keyways:
- Efficient Tracking of Funds: Outsourcing enables for detailed tracking of every grant dollar, ensuring funds are being used according to the grantor’s specifications. It can be difficult to manage multiple grants simultaneously, especially when there are stringent reporting requirements. With outsourced accounting, grant tracking is automated and aligned with the specific guidelines set by the funder.
- Ensuring Compliance with Grant Requirements: Grants often come with strict terms and conditions regarding how the funds are to be used. Outsourced accountants are familiar with these requirements and can guarantee that funds are spent appropriately. This helps avert the risk of non-compliance, which can result in penalties or loss of funding.
- Simplified Reporting: Grant providers typically require detailed financial reports to guarantee that funds are being used as intended. Outsourced accounting firms can generate these reports on time and with the required level of detail, making the process easier for you and more transparent for grantors.
- Audit Preparedness: Grant providers may require an audit to verify how funds are spent. Outsourcing accounting guarantees that you are audit-ready at all times. With accurate and organized financial records, outsourced accountants help mitigate the risk of errors or omissions that could hinder the audit process.
The bottom line
Outsourcing accounting is more than just a way to cut costs. It is a strategic decision that can provide your organization with valuable financial insights, greater accountability, and smoother grant management processes. Outsourced accounting services can help you stay compliant, save money, and build trust with stakeholders.
Reach out to Aprio’s Nonprofit team to learn how to streamline your financial processes, make better-informed decisions, and ultimately, improve the overall success of your organization.
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About the Author
Basil Nasereddin
Basil Nasereddin has a long history working with nonprofit clients, including CEOs and CFOs of organizations with annual revenues ranging from $1M to $50M. He specializes in outsourcing accounting functions and reducing overhead costs for his clients, as well as federal grants reporting and compliance.
(240) 364-2611
Lindsay Sollers
Lindsay Sollers joined Aprio in 2023 and serves as a manager in Aprio’s Outsourced Accounting Group. Lindsay has over two decades of experience in public accounting and specializes in Nonprofit GAAP, including general ledger, reconciliations, and financial reporting. Passionate for serving nonprofits, she works closely with nonprofits of all sizes, as well as their CFOs, Controllers, and Executive Directors.
(678) 607-4046
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