Accounting Best Practices Maximizing Effectiveness and Efficiency in your Accounting Operations June 10, 2014
Presenters Lauren Malone Director of Strategic Research Tate and Tryon lmalone@tatetryon.com Virginia Weinstein Marketing Manager T3 Information Systems vweinstein@t3infosystems.com Nationally Recognized for Excellence with Nonprofits
The Financial Reporting Cycle 1. Board Strategy 5. Forecast & Analysis 2. Develop Budget 4. Financial Reporting 3. Process Transactions
Accounting Best Practices Series Billing & Collections Procurement to Payment Budgeting and Accounting
BILLING & COLLECTIONS
A Silo Approach
A Collaborative Approach
AMS/CRM/Donor System AMS/CRM/Donor System Capability % Yes Integrated with website 73% Allows members to manage account information online through self-service portal 62%
Involvement of Finance in Selection of AMS/CRM/Donor System Minimally Involved, 21% Not Involved, 17% Very Involved, 37% Somewhat Involved, 25%
Level of Effectiveness Number of Software Solutions Very Effective 27% One 28% Somewhat Effective 58% Two to Three 55% Ineffective 15% Four or More 17%
25% Effectiveness vs. Number of Software Solutions 20% 15% 10% Very effective Somewhat effective 5% 0% One Two Three Four Five or more
AMS/CRM/Donor System Collections Practices Receive more than 50% of overall revenue by check (rather than electronically) % Yes 53% Use remote deposit 65% Use a lockbox 45%
Posting
Posting Cash Receipts Membership Dues Contributions 80% 87% Publications Meeting Registrations Exhibits Advertising or Sponsorship 66% 64% 59% 59%
Takeaways Implement a full-service AMS/CRM/donor system Minimize the number of software solutions used to process billing Receive revenue electronically Utilize remote deposit and lockboxes Post batches to the GL, post transactions to both the CRM/AMS/donor system and GL Integrate and automate cash receipt posting
PROCUREMENT TO PAYMENT
Contract Management 52% Half have a formal, documented contract management process For 1/4th of those, the process is automated 26%
Purchase Order Process Have one? Used for? (Multiple answers permitted) Yes, 27% Expenses Above Threshold IT Expenses 50% 38% No, 73% Capital Expenses Contractual Expenses All Expenses 31% 31% 31%
Vendor Invoice Approval About 4 out of 10 use an online workflow/approval process and nearly two-thirds say this process is integrated with the accounting software No, 36% Yes, 64%
Vendor Invoice Payment 72% Percentage of disbursements is 50% or more 9% 5% 3% 2% Paper Check ACH Third-Party Processor Credit Card EFT
Positive Pay Fraud Prevention Process Yes: 59%
Expense Reports 9 out of 10 say a person outside daily management reviews the CEO s expense reports 84% Of these, officers (president, treasurer, secretary, etc.) are most likely to review the CEO s expense reports The CEO s expense reports are most likely to be reviewed quarterly (41%) or monthly (35%)
Credit Cards 50% or More % Who have One? 20% No, 12% Issue to Employees? Yes, 88% Monthly Limit Less than $10k CEO 33% 10% - 49% 60% Senior Management 62% Less than 10% 20% Staff 89%
Tracking Fixed Assets 96% While nearly all use Excel or a fixed asset software to track fixed assets and calculate depreciation... 16% fewer than 2 out of 10 say their fixed asset system is fully integrated with their AP module
Takeaways Have a formal, documented contract management process, ideally automated Establish a PO process for procurement of goods and services; adopt an online workflow for vendor invoices, and integrate with accounting software Switch vendor payments from check to electronic method Implement positive pay Review CEO expense reports Limit use of corporate credit cards Establish and enforce usage controls Adopt a system for tracking fixed assets and integrate with AP module
RESOURCES
Resources Whitepapers, dashboards, assessment tools Accounting Best Practices: Billing & Collections Accounting Best Practices: Procurement to Payment Membership Metrics: A Review of Current and Best Practices IT Staffing and Spending Data Management Checklist
Next Steps Request a Resource http://bit.ly/ttrequest Contact Tate and Tryon Strategic Research for Nonprofits: lmalone@tatetryon.com Visit website at www.tatetryon.com Contact T3 Information Systems Microsoft Dynamics Partner for Nonprofits: vweinstein@t3infosystems.com Visit website at www.t3infosystems.com