In search of a lasting, trusting relationship
We can talk about our accounting and controllership services… or you can read about the results. See what we did for an area nonprofit!
Challenge
A large nonprofit client was losing its chief financial officer, a position they had already replaced twice in the preceding years. Instead of continuing this revolving door of a situation, they contacted us to perform some of the budgeting work their CFO position typically covered.
However, we soon realized that these responsibilities were the tip of an iceberg. The organization was doing its own books but without the accounting expertise needed. They were behind on their reconciliations and financial statements, and a great deal of cleanup was needed in their chart of accounts and other areas.
This client needed a long-term solution they could trust. And they needed it from a firm with enough people and nonprofit expertise to support an organization of their size.
Solutions
After creating a budget so they could present it to their board, we took a deeper dive into the work at hand. We caught their books up, upgraded them to more robust accounting software, and transitioned them to a cloud-based automated payment/AP system. We also streamlined their chart of accounts to reduce the high number of accounts that weren’t being used.
With these basic steps complete, we had a clearer view of their financial situation and found opportunities for our client to better utilize their grants. For example, the organization often had to return unused funds from cost reimbursement grants. With their newly-revamped accounting setup, they were able to find ways to spend their money (or get extensions in their spending deadlines).
We also realized that the organization needed a better indirect cost rate. The federal grants they use allow a set percentage of indirect costs (such as staff salaries, rent and utilities) to be covered under the funding they provide. This percentage is called an indirect cost rate; the higher your rate, the more of these costs that you can cover with grant money. We helped our client obtain a higher indirect cost rate that resulted in more cost savings for these expenses.
Results
In addition to eliminating a three-month delay in their books, we were able to assist our client in revising their indirect cost plan. This led to the recovery of an additional $100,000 that was eligible for cost reimbursement by the grant. Previously they had covered these with unrestricted funds, which could now be used for more urgent needs.
Reporting and forecasting is also much easier. Their system-wide accounting software includes both historical and current data and makes it easily accessible. The streamlined chart of accounts allow for a set of clear and usable financial statements. And their online billing platform has greatly simplified their check-writing process; it also allows their CEO to authorize checks and get bills paid from anywhere.
The biggest result, however, is a consistent presence that gives them peace of mind. They never have a gap in their accounting work, and we conduct weekly phone calls to review reports due, discuss upcoming meetings and answer any questions they might have.
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