Clean, accurate financial records are essential for any company in any industry. But the complexities of a nonprofit create unique needs and challenges when it comes to bookkeeping and accounting. From meeting complex regulatory and donor financial reporting requirements, to properly accounting for and managing grant monies, and much more—it’s a complicated, time-consuming function and a major responsibility.
That’s why many nonprofits find it advantageous to outsource their accounting and bookkeeping services to an experienced third party. It’s an effective way to tap the expertise of professionals who understand the nuances of accounting for nonprofits and can help relieve your staff of the administrative burdens.
If you’re thinking about outsourcing your nonprofit’s bookkeeping and accounting, you may be wondering what factors should weigh into your decision. These 5 considerations can help you make the right choice about whether to outsource these critical functions.
1. By spending less time on bookkeeping and accounting, your team can devote more time and resources to your mission.
With budget constraints a constant reality, your nonprofit staff will inevitably wear many hats and juggle multiple responsibilities. The leaner your team, the more challenging it is to keep them from getting bogged down on tasks that don’t directly support fulfilling your mission. You want them focused on attracting and engaging with donors or developing and managing effective programs—not running payroll, paying invoices, and preparing financial statements.
2. Rather than try to attract experienced accounting professionals as internal employees, you can tap that expertise more easily by outsourcing.
By outsourcing your bookkeeping and accounting to a third party that’s already staffed with a team of highly talented professionals, you can avoid the time and costs associated with finding, managing, and retaining in-house employees for these crucial functions.