How to Plan for Better Nonprofit Financial Management in 2017


While 2016 might be over, 2017 is off to a fast start. It’s important for financial managers to have the right planning in place for their nonprofits in the new year. Between reports and taxes and grants and compliance, things can get lost in the mix.

Don’t fear getting lost in the chaos—we put together this quick planning guide for nonprofits to be sure you’ve got everything set for great nonprofit financial management in 2017.


Reflect on the last year

What worked in the last year? What didn’t? What do you know now that you wish you would’ve known going into the year? Whatever you learned in 2016, incorporate in your plans for 2017. Do you have the right tools? Are your current tools sufficient to do your job well and reach your organizational goals?

Take a look at various fundraising metrics and reporting necessities, including donor acquisition and retention, major giving, and planned giving. In this, you will take a look at your systems, processes, board communication, and donor relations.


Evaluate your systems & processes

Reevaluate your nonprofit financial management systems and processes. You want to be sure you have the right tools to set you up for success in the new year. You also want to be sure you’re considering all of the regulatory details and industry best practices in both your tools and your related business processes.

Here are a few simple steps to help you evaluate your systems and processes:

  • Make sure you fully understand the conditions, data collection, and reporting requirements attached to each funding stream.
  • Make sure your financial management system is configured to capture grant-related data at the required level of detail for reporting.
  • Confirm the systems can accurately report on the fiscal calendar dictated by the funding source.
  • Validate that you can track financial performance at the grant level, including budget to actual comparisons, on demand without significant offline manipulation.

A reliable nonprofit financial management system will allow your finance staff to spend less time on painstaking tasks in the manual grant reporting process (prone to human error) and focus on important strategic steps to take in the coming year.


Evaluate board communication.

Your board has a lot of responsibilities, and they rely on proper communication from your finance team to be able to make the best decisions for your organization. There are key questions nonprofit board members should ask and your finance team should be able to answer.

How can the finance team communicate reliable data to the board? Your nonprofit’s financial reporting tools need to provide not only a mechanism for retrieving data from your ledgers but also allow you to present the information in a manner that is useful for your board and for the board to present to their relevant audiences.

Your ledgers should allow you to record data in a way that meets internal and government compliance and reporting responsibilities. You should never be tracking any data offline or any place that could hinder your team’s ability to quickly and accurately produce financial reports.

Set up your financial dashboards

Your board doesn’t want to see a bunch of numbers. They are looking for trendlines and year-to-year comparisons. They want to know that more money is going into programs and less into back office processes. Now’s a great time to make sure you are measuring the right KPIs for your organization. And make sure you have the tools to quickly maintain and update your reports.

Make this year a great one for your nonprofit organization and your finance team. Through looking back on your past experiences and lessons, you can improve upon your future. If your current processes and procedures aren’t optimizing your team’s time and productivity, it could be time for a change. Learn more about financial management for nonprofits in our free guide.


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