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Reduce Nonprofit Admin Costs With Streamlined Bookkeeping


Reduce Nonprofit Admin Costs With Streamlined Bookkeeping


Hardcover book spine with title Streamlined ProcessesMost nonprofit organizations have multiple revenue streams. Tracking all those funds and their associated expenses can easily overwhelm the administrative staff, particularly at smaller organizations. Or, to put it another way: Admin costs often consume a disproportionate amount of a nonprofit's budget, measured in both money and time.

Here's how you can streamline your nonprofit's bookkeeping to cut admin costs:

Stay Current
Instead of allocating revenue and expenses as they occur, many nonprofits wait and assign them to funding sources as a separate process. But with so many buckets and so many costs, it's a poor use of time to do all that scrubbing, trying to back every dollar into where it needs to be. It can also be stressful, especially if mistakes or discrepancies start piling up.

This is often a problem for staff and program directors who have recently come over from the for-profit sector. Many of them simply aren't used to the higher level of accountability at nonprofits.

For example, some grants require that all the costs associated with them — e.g. salaries, cellphone bills, renting office space — are supported with invoices every month documenting the complete breakdown of every dollar spent. If you're not prepared to track that from day one, you could fall hopelessly behind in a hurry and place an undue burden on your admin staff, who must later allocate and track down support for the expenditures.

Set It and Forget It
One way to stay current is to research the software programs available to enable nonprofit bookkeeping in real time. The more systems you can automate, the less time your admin staff will have to spend on non-value-added tasks. Assign transactions to the various programs and funding sources at the initial entry of the transaction. And utilize software for processing payments and receipts so that you can automatically record transactions with a sync to your accounting software.

Eliminate Needless Redundancy
As you incorporate more automation and industry-specific software into your system, be sure to also phase out some of the older programs that have become obsolete. It makes no sense to ask your admin staff to "back up" your books with outmoded spreadsheet software that requires re-keying all the information. (And don't even get me started on the needless burden of maintaining file cabinets full of time- and space-wasting paper documents.)

If you're still using legacy bookkeeping systems at your nonprofit and your staff lacks the expertise and/or time to make the transition, this could be the right moment to explore outsourcing.

Money Saved + Time Well Spent
When calculating the benefit of streamlined bookkeeping, be sure to factor in the "people cost." How do you want your admins spending their time? Do you want them mired in bookkeeping tasks, or do you want them pursuing the greater good of your core mission?

Learn More About Nonprofit Bookkeeping:
Better Bookkeeping Practices for Nonprofit Organizations
Presenting Financials to a Nonprofit's Board of Directors
Understanding the New Accounting Standards for Nonprofits
Bookkeeping for Nonprofits: What Constitutes a 'Fundraiser'?
Be Careful With Those Not-For-Profit Allocations
Five Signs That You Should Outsource Your Nonprofit's Bookkeeping Functions

Tom Ross


Tom Ross

Managing Director Tom Ross, Supporting Strategies | Kansas City, provides bookkeeping and controller services to growing businesses.

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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.