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Five Signs That You Should Outsource Your Nonprofit's Bookkeeping Functions


Five Signs That You Should Outsource Your Nonprofit's Bookkeeping Functions


Nonprofit Lightbulb and ChartsMany nonprofits try to do more with a smaller budget. This is a challenge when it comes to bookkeeping, as there are specific regulations and tracking and filing requirements for nonprofits.

For these nonprofits, the simplest, most cost-effective solution may well be to outsource their bookkeeping functions. Does your organization fit this description? Here are five signs to look for.

  1. You Suffer from "I've Got It/You Take It"
    Businesses with limited budgets may decide to add bookkeeping tasks to people who were hired to do other jobs. This may be expedient in the short-term, but it can be problematic to have people who aren't trained in or knowledgeable about bookkeeping for nonprofits serving in this role.

  2.  You Have No Backup Plan
    Maybe you do have a single competent staff member in charge of all financials. But what if he or she gets seriously ill? Or quits without notice? Or leaves on a two-week cruise just when you get hit with an audit notification?

  3.  You've Become Too Big to Act Small
    Growth is good — up to a point. And that point arrives much sooner for a nonprofit. "The compliance and administrative burden for a small nonprofit organization is far greater than for a similar sized for-profit company," authors Murray Dropkin and James Halpin write in Bookkeeping for Nonprofits (Jossey-Bass, 2005). According to the authors, "In some states, a nonprofit organization with $250,000 or less per year in support and revenue is required to file an audit with the state attorney general and pay a filing fee based on income or net assets."

  4. You Can't Afford to Hire a Professional
    Budgets are unforgiving. If you've priced out the cost of a full-time bookkeeper and can't afford the salary and benefits, your options are limited. You'll just have to keep spreading out those financial responsibilities among existing staff. What other choice do you have?

  5.  You Can't Afford Not to Hire a Professional
    Actually, you do have a choice. You can take away your worry by outsourcing your nonprofit's bookkeeping needs. If you work with a vendor that provides multiple services, you'll be able to set up a solution that fits your particular needs. That will allow your staff to get back to doing what you hired them to do. They'll be able to refocus on the goals that attracted them to nonprofit work in the first place, without enduring the time-consuming and stressful process of navigating nonprofit financial regulations.
Jim Rice


Jim Rice

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This website is created by Supporting Strategies to provide general bookkeeping and accounting information only. Supporting Strategies does not provide tax, legal or accounting advice, and the information contained herein is not intended to do so. As such, the information provided should not be used as a substitute for consultation with professional tax, legal, and accounting advisors, and you should consult with a tax, legal and accounting professional before engaging in any transaction.