Each day in the life of a nonprofit is spent managing limited resources, often requiring staff members to accept responsibility for tasks both inside and outside of their areas of expertise. That means that any interruption to operations such as staff termination, illness or other unforeseen events can greatly impact the ability to achieve the organization’s mission. And in those moments, nonprofits need additional support to keep basic operations running smoothly.
That’s where Cray Kaiser comes in. Our firm has been a significant resource to nonprofits when they’ve faced an unplanned crisis. When staff responsibilities are stretched thin, it’s vital that financial operations remain uninterrupted. But that’s not always the case, especially when the single team member responsible for accounting activities is unavailable.
Below is an example of how we recently worked with a nonprofit organization on their accounting services and the positive impacts it had on their operations.
The Crisis: Accounting Functions Are Halted
One day, a local nonprofit organization found all of their accounting and financial reporting functions come to a halt due to an unplanned staff exit. The organization had relied upon this single individual to perform a substantial portion of the day to day accounting tasks. And then suddenly, at a moment’s notice, the ability to pay vendors, access the accounting system and prepare for the year end audit was lost.
Vendors were becoming impatient with delayed payments. The board was left unprepared for an upcoming external audit. The ability to secure continued funding was at risk. The problem had escalated to a crisis almost immediately. That’s when CK was called in.
The Process: Getting Back on Track
Our first action was to work with the executive team to develop and implement a strategy to restore all accounting functions as soon as possible. Within a few days, we were able to get the backlog of vendor payments current, a check disbursement process streamlined and authorization levels more defined.
Then, our focus and attention shifted to the financial reporting process. Through this process, we found that significant time was spent in managing charitable giving with manual spreadsheets and that the donor reporting was non-existent. We identified and recommended best practices that enabled the organization to streamline reporting, strengthen internal controls and provide donors confidence that funding was allocated to the appropriate programs and activities.
Based upon these recommendations, CK worked with a third-party software provider and the nonprofit organization to implement a new accounting system. The addition of this software helped streamline manual processes and reduce organizational resources devoted to recordkeeping. Now, key donor reports are just a click away and transactional postings are fully integrated, requiring less manual journal entries into the system.
Finally, our nonprofit client was also feeling pressure for an upcoming year-end audit. As auditors ourselves, we had a clear understanding of the work papers and disclosures that would need to be provided during the audit process. This enabled us to assist the organization in planning for the audit by meeting with the new audit firm, preparing work papers and assisting the auditors with key disclosures for the financial statements. This knowledge and experience allowed us to educate the management team on the importance of providing a well-defined audit trail for transactions including up-to-date accounting procedures. At the end of the audit, our client received an unmodified opinion despite the significant personnel change.
The Outcome: Thriving Financial Operations
Our relationship with this nonprofit client continues to be strong today not just because of the work performed in their time of need, but more importantly, through our efforts of developing strong lines of communication with the management team and board of directors. Throughout the process, we were there to provide vital communications and support, whether it was a conference call or our physical presence in the board meetings.
CK takes great pride in weathering the storm with our clients and being able to share in their successes. As for this client, we continue to provide weekly onsite visits for check processing, monthly reporting and annual audit preparation services. The organization continues to receive unmodified audit opinions and we help keep them updated on new regulations and standards effecting the industry. From time to time we even step in to provide advisory services such as cash management, payroll processing and customized reporting for various committees such as in the case of fundraising efforts.
Accounting services are a growing need for many organizations, whether a nonprofit or a closely held company, and they can be customized to meet your specific goals and objectives (even as they change and evolve).
Please contact Cray Kaiser for additional information on how these services can help you.