Most nonprofits operate under a tight budget with a lean staff so they can maximize the amount of funds and resources allocated to their mission. The goal is to reduce general and administrative costs to make a bigger difference in the community they serve.
Of course, there’s a fine line between controlling costs and sacrificing service and expertise in certain areas, which can create serious risk.
Accounting is one area that’s absolutely essential to the very existence of any charitable organization. As the nonprofit grows, reporting and audit requirements often become more complex and resource-intensive. For organizations with limited accounting resources, this can be problematic, especially when it’s time for the annual audit.
Fortunately, the solution doesn’t involve blowing up your budget to hire an accounting team. In fact, outsourced client accounting services (CAS) can help nonprofits reduce costs while implementing accounting best practices that reduce risk.
What Is CAS for Nonprofits?
CAS refers to a variety of outsourced client accounting services for nonprofits, such as bookkeeping, payroll, reconciliation, and audit compliance. At Prager Metis, our CAS group can be your nonprofit’s outsourced accounting department, providing valuable financial insights, real-time analytics, and the resources of an international firm.
How Does CAS Benefit Nonprofits?
Prager Metis offers a la carte CAS, which means you can choose the services you want and need. If you want to continue managing certain functions in-house, that’s fine. Our services are customized to suit your needs and address your specific challenges.
For example, audits are very time-consuming. While different states have different audit thresholds and requirements, the minimum threshold for an annual audit in New York is just $1,000,000.
Auditors must be provided with complete, accurate information in a timely fashion. The longer it takes to produce the financials and complete the audit, the more expensive the process becomes. Failure to meet audit compliance requirements can also create liability issues.
We recently helped a nonprofit reduce their audit costs from $21,000 to $12,500. All data had been collected, recorded, and neatly organized in a way that’s audit-compliant, which simplified the process and saved them time and money.
For many nonprofits with limited resources, accounting is still managed on paper and in Excel spreadsheets. Different people follow different processes, record data in different ways, and store data in different places.
In addition to creating audit headaches, accounting processes that are outdated and disparate make it more difficult to align each area of the budget and close the books each month.
From our initial engagement, we’ll assess how information is entered and reported so we can implement best practices that reduce errors, streamline processes, and improve efficiency. We can also review your budget and offer guidance about how to save money and where to invest to support the growth of your nonprofit.
In other words, the value of CAS for nonprofits goes far beyond day-to-day accounting and audit compliance. You’ll receive a higher level of accounting expertise and redundant staff without adding one or more full-time salaries.
The Value of Modern Accounting Software for Nonprofits
Our outsourced client accounting services for nonprofits rely on popular, reliable software platforms like QuickBooks Online, Zero, and Bill.com. These cloud-based systems can be integrated with most donor management software products. If you already have an accounting system, we would take a backup of that system and move it to our cloud-based system to ensure compliance and maximize efficiency.
Cloud-based accounting software is maintained, secured, and updated by the software vendor so your in-house team can get out of the business of software management. You simply access information and generate reports as needed from virtually any device and location.
This allows you to work remotely without compromising security and provides full transparency into the services we provide. Our outsourced accounting team will be able to securely access the software to provide services remotely as well.
You can even set up user permissions so auditors can access certain data and documentation themselves. The accounting software used by Prager Metis is inherently audit-compliant, which means data is entered and organized in a way that satisfies audit requirements and simplifies the audit process.
Nonprofit accounting best practices, modern accounting software, and a custom CAS strategy, all managed by professionals who have experience working with the nonprofit community, can have a direct impact on your nonprofit’s ability to deliver on its mission and continue growing.
As a Principal of Prager Metis CPAs and leader of our CAS group, I’d love to learn more about your organization. Let’s discuss how we can support your nonprofit’s accounting functions and provide strategic guidance that improves the overall financial health of your organization. Please contact me directly at email@example.com or 516-921-8900 extension 10511.