Tools to Navigate a Nonprofit Budget Process
In the past few years, we, as a whole, have learned that there’s no excuse for working with outdated technology, especially when it comes to the process of budgeting. When we talk with nonprofits about their budget process, it’s usually accompanied by moans and groans about what an arduous process that is. The good news is that there are some Financial Planning and Budgeting (FP&B) tools that can keep you safe in deep waters.
The Problem
We have found that the average timeframe to build a nonprofit’s annual budget is four to six months. Based on the timeframe, most organizations interpret collaboration as emailing spreadsheets around to appropriate parties. Thus, everybody gets a spreadsheet resulting in multiple spreadsheets floating around with no master data version of the truth or latest iteration.
This reality creates headaches, frustrations, and wastes of time for budget managers, program managers, and finance. The challenge to overcome is spending your time on more strategic business objectives and forecasts instead of trying to find errors in spreadsheets and formulas.
Many conversations this year with nonprofit organizations have been in handling changes in the FP&B processes and assumptions. For example, a nonprofit client in Indiana received new state funds, resulting in a complete recasting of their budget from the board. Receiving an influx in funds is nothing to cry about on any day while providing great relief to the organization.
The process of recasting the budget and updating assumptions can be a challenge these days with remote workforces and the ability to collaborate quickly. The need for real-time strategic decisions on that data is becoming evident. For example, during the height of the COVID-19 pandemic, assumptions at many clients were changing hourly.
A Client Experience
A JMT Consulting and FP&B solution provider, Vena, client’s mission involves helping people undergoing cancer treatment. Together, we were able to rapidly onboard them to react to the evolving times when COVID-19 hit. Because of JMT Consulting and Vena’s swift onboarding, people who have cancer can now receive their treatment.
The Solution
Vena is a solution that we recommend to many organizations with FP&B challenges. It is a solution that works like Excel on steroids. It leverages Excel, a tool that every finance department has grown up with, knows how to use, and loves.
Solutions that utilize workflow automation enable collaboration quickly across departments with complete version control and audit trails. The integration with back-end ERP, CRM for fundraising, and HR/payroll solutions supports the dynamics of complex financial modeling. For example, retrieving and updating board reports or management exception analysis becomes easy right out of the system.
Features of Vena
As a manager, you need to create and control the nonprofit budget process using rules for governing the process, then assign tasks for execution and tracking. Take advantage of flow charts resulting in complete project/process tracking to manage the flow.
From most solutions, notifications can be sent out for those behind schedule, tied to event triggers or dates. Imagine efficiently streamlining and digitizing the roll-up into one master organization budget while maintaining document integrity.
Comprehensive document control for checking in and out documents for complete audit trail tracking is supported. Once someone checks out a document, no one else can touch it. In addition, controls are in place to manage the data securely so that changing data is audited and time stamped by the one person who changed it.
A powerful benefit of FP&B solutions is determining data integrity at a specific cell. Highlighting a particular cell enables drill-down into the audit trail showing who did what and when to that cell, including comments.
Warnings notify users about a budget threshold problem. As an example, a control tolerance may be something as simple as a 20 percent higher limit. Some controls can be simply warnings, while others can prohibit the process until corrected to move to the next step in the process. Complete commenting is supported for any activities that need to be explained to others in your organization.
Integration with PowerPoint tables into a board presentation deck works the same way. Very convenient, time-saving, and upholds complete data integrity in real-time. The tables within that PowerPoint get updated when you refresh it. Therefore, you don’t have to rebuild your PowerPoint every month.
New Resource for Nonprofits
New technologies are always exciting, and as they emerge, there is a quick adoption amongst the leaders before greater adoption occurs. The good news is FP&B tools, which were once the mainstay of large corporations, are accessible to all types of organizations and sizes. The ability for smaller nonprofit clients for such tools is exciting to witness because the benefits can easily be quantified with a quick ROI.
We know year-end for our clients is a tough time for budgeting for the following year. Many begin the new budget process early in that final quarter. Harnessing a tool and leveraging a consulting organization that thoroughly understands the nonprofit business is a critical and timely survival tool for success in streamlining the process.
If your organization would like to explore our solutions further, schedule a quick fifteen-minute consultation with us. Reach out to us at jmtdev.wpengine.com/contactus. Remember that you should be relaxing about your budget process, not trying to simply survive.
