Financial Best Practices for Nonprofits [Tips from JMT Accounting Experts]

Staying on top of your organization’s finances is extremely important, especially in the nonprofit industry – where every penny goes towards achieving your mission. Not only are a nonprofit’s financial decisions scrutinized by the Board, but nonprofits are also under the microscope of the public. Chyla Graham, President of CNRG Accounting Advisory, says, “if nonprofits don’t have a good handle on their finances and how things are being reported, they aren’t able to clearly articulate what’s happening, and the naysayers can cause the most damage.”

Nonprofits must think of themselves as publicly traded companies, meaning they must consider the ramifications of every financial decision knowing that their information is public knowledge. They must be prepared to answer the difficult question of how each financial decision supports their mission. JMT Consulting offers an array of nonprofit financial consulting services to help along the way. Below are some tips to help tackle the everyday challenges of nonprofit financial management.

#1: Find a Trusted Financial Advisor

Depending on your organization’s available financial resources, this can be in-house or outsourced. Find resources that make the information easy to understand and are readily available if you have any questions. If you decide to outsource, ensure your provider understands the nonprofit world and makes you feel comfortable that they understand your situation, goals, and outcomes desired.

One financial advisor who genuinely wants to help you and your organization navigate the complexities of nonprofit financial management is JMT Consulting. Jacqueline Tiso, JMT’s CEO and founder, spent years working tirelessly in the nonprofit industry and saw just how underserved nonprofit organizations are in terms of their finances. This knowledge and a sincere desire to help others lead to the creation of JMT Consulting. Now, thousands of nonprofits trust JMT Consulting and benefit from the organization’s 30 years of experience in helping nonprofits achieve their mission.

#2: Go Paperless

The benefits of going paperless span from saving the environment to streamlining processes and saving costs throughout the organization. Paper drives manual processes and inefficiencies which sap energy and funds. Going paperless, from invoicing to bill payments to full-blown accounting in the cloud, helps nonprofits to more effectively manage their spending and frees up funds for more impactful initiatives that help to deliver on their missions.

Cloud-based financial technology used to be something that was reserved for wealthy for-profit organizations due to the cost of the solution and the cost of implementation. With the increasing adoption of cloud-based technology, it is now more accessible to smaller organizations such as nonprofits. JMT Consulting is passionate about cloud-based technology due to its vast number of benefits.

#3: Be consistent

Developing a routine makes finances a priority and ensures the completion of essential tasks. In addition, the more familiar you become with the financial practices of your organization, the easier it will be when discussing with a financial advisor. After all, you know your organization’s operations better than anyone.

JMT Consulting knows the nonprofit industry inside and out. Our organization is made up of individuals who are passionate about nonprofits and want to help nonprofits achieve their mission. Plus, JMT works exclusively with nonprofits so industry learnings and best practices are easily shared.

#4: Keep a Wishlist

Before making impulse buys, remember that nonprofits are under the careful scrutiny of the public. Make a list containing things you would like your organization to have and the importance and benefit to your organization and its mission. At JMT, we understand that at nonprofits, accurate finances give your organization a clear understanding of budgeting needs. By creating a wishlist, you can get buy-in from your team – and perhaps even locate a donor or volunteer who can help offset or eliminate the cost.

#5: Avoid Common Mistakes

The number one mistake nonprofits make before visiting a financial advisor is adopting a chart of accounts without knowing how it relates to their organization. Avoiding this mistake will pay dividends in the future when the board is reviewing the financials. Graham explains that not thinking this through on the front end often results in too many accounts to keep track of and makes it harder for each board member to understand and make informed decisions.

Software solutions, such as JMT Consulting partner, Sage Intacct, cloud fund accounting software, bring clarity to the often complex world of finances. For nonprofits that want improved workflow, visibility, and powerful financial management tools, Sage Intacct is the ideal solution. JMT can help your nonprofit lay the groundwork to get started with Sage Intacct and capitalize on its benefits.

We know that finances are often a difficult subject for nonprofit organizations, but there are plenty of resources available. The nonprofit experts at JMT Consulting understand the additional pressures nonprofits face and stand ready to assist. If your nonprofit could benefit from a financial solution with an abundance of help and guidance along the way, please contact us at jmtconsulting.com/contact-us.

5 Financial Best Practices for Nonprofits

November 9, 2021 | By Natalie Crighton

#1: Find a Trusted Financial Advisor

#2: Go Paperless

#3: Be consistent

#4: Keep a Wishlist

#5: Avoid Common Mistakes

Related Posts:

3 Essential Technologies Every Nonprofit Finance Department Needs in 2021

Sage Intacct vs. MIP Fund Accounting: The Ultimate Comparison Guide for Nonprofit Financial Professionals

Nonprofits & Cybersecurity: The Rising Risk of Attack

Sage Intacct Budgeting & Planning vs. Vena