September 16, 2024
Challenge: Aging Infrastructure
A nonprofit organization dedicated to serving its senior community was struggling with its aging financial infrastructure. The organization relied on multiple disjointed systems for accounting, budgeting, development and external billing. Using outdated systems meant that staff members had to update financial reports, budgets, employee expense reports, and other key information manually using Excel files and PDFs. The shortcomings of their financial infrastructure meant that staff spent too much time struggling with manual processes, addressing backlogs, and cleaning up errors.
The absence of a formal monthly close process, delayed financial reporting, and insufficient budget monitoring heightened these challenges. This left major balances without supporting schedules, and routinely there were more questions than answers. Financial reports were manually produced with a 2- to 3-month delay, leaving directors and budget owners with insufficient information needed to monitor expenditures. The annual audit was particularly tedious, requiring months of the accounting team’s attention to comply with auditors’ requests. These inefficiencies not only hindered their ability to maximize their impact but also increased the risk of discrepancies, errors, and potential fraud.
Solution: Assessment of the Financial Systems Operation
Management recognized the need for a widespread financial overhaul and engaged GRF to assist them with implementing a new accounting system. GRF has a demonstrated record of excellence in financial system optimization and providing customized solutions for nonprofits. The goal was clear: streamline operations, improve accuracy, and support the nonprofit’s mission more effectively.
Following a thorough evaluation of the existing financial systems and workflows, GRF recommended upgraded systems including Sage Intacct for accounting, BILL (formerly Bill.com) for accounts payable, and Divvy cards for employee expenses. These changes were proposed to help the organization automate and unify financial processes while enhancing the efficiency and security of the organization.
The overhaul included thorough planning for the new chart of accounts, departments, locations, and grants. The GRF team ensured that historical data was accurately mapped for continuity. They integrated the cloud-based BILL system to automate A/P processes, offering greater visibility into payment activities, and enabling remote approvals. They also introduced Divvy cards to simplify employee expense reporting and integrate seamlessly with the accounting system.
GRF also set up a formal monthly close process, created supporting schedules , and entered budgets into Sage Intacct. This facilitated the creation of Budget vs. Actual reports for each program. They developed financial dashboards to provide real-time access to expenditures for directors and budget owners to efficiently monitor financial activities.
As part of the transformation, GRF completed several critical accounting tasks including:
- Reconciled bank accounts for the current fiscal year.
- Corrected duplicate and missing transactions.
- Tied opening balances from years prior to financial statement audits.
- Entered budgets into Sage Intacct to automate key financial reports.
Finally, the GRF team diligently tracked down all the prior year’s audit schedules, ensuring they were organized for the monthly roll-forward. They created a comprehensive checklist and a template for the monthly closing schedules. They also reconciled several months of pledge receivables and aligned revenue data between finance and development. In addition to these achievements, GRF also trained the staff on the new procedures and proper use of dimensions. This training was essential for improving accuracy and efficiency in daily tasks while making sure the team understood the new systems.
Results: Improved Efficiencies
The application of GRF’s recommendations led to significant improvements in the nonprofit’s financial infrastructure. Automated systems reduced the time and effort required for A/P processing, financial reporting, and employee expense management, enhancing overall efficiency. Regular reconciliations and automated processes minimized discrepancies and errors.
Monthly financial reports now provide up-to-date information, aiding informed decision-making. Directors and budget owners have real-time access to their expenditures, allowing for effective budget management and the ability to plan for the future. The streamlined billing process freed up the accounting team to focus on other critical tasks, while the new systems and workflows made the annual audit process more efficient, reducing the burden and adding new tools and resources being used.
Conclusion: Improved Financial Infrastructure Helps Maximize Community Impact
The transformation of the nonprofit’s financial infrastructure highlights the benefits of investing in technology and integrated financial systems. Establishing formal processes is essential for maintaining accurate and up-to-date financial records. Comprehensive training and ongoing support are vital for ensuring a smooth transition for integrating new systems. Partnering with experts like GRF can provide valuable insights and tailored solutions to meet the specific needs of nonprofit organizations.
The collaboration between the nonprofit and GRF has not only resolved operational inefficiencies but has also empowered the organization to maximize its impact. With a robust financial infrastructure in place, the nonprofit can dedicate more resources and attention to its mission of providing effective assistance to seniors in need. This transformation ensures that the nonprofit’s financial health supports its charitable goals, enhancing the quality of care and services provided to the community.
GRF Can Help
Contact us to assess your financial systems operation. We work with organizations large and small to conduct assessments on a broad range of operational, financial, and accounting systems. We can help you navigate your digital transformation, so you can stay focused on your mission and goals.
