A good nonprofit finance team should, first and foremost, keep you out of jail. This is another way of saying that they are responsible for playing by the rules, understanding all aspects of compliance, and providing high-integrity financial statements that are accurate and cleanly auditable. It is not the finance team’s only job however. Just as important is developing timely financial statements, budgets, forecasts, and other reports that actually help managers make better decisions. Reports that are too dated, involve too many risky assumptions, or are not clearly understandable by mere mortals are worthless.
Every day, nonprofit leaders make decisions about hiring, firing, moving, building new programs, investing and borrowing. If your finance team isn’t providing you with useful, timely information helpful in making those resource decisions, they should be. It’s their job. Unfortunately, some nonprofit managers don’t always know what to ask for. So some example questions that might help you get the conversation started and your learning curve trending upward, are: “If I do this (hire, fire, build, etc), how will our financial situation change in the next 12 months?” and “What assumptions have you used about revenues and expenses to arrive at this financial picture?” and “What is our cash position today? What are you forecasting it to be in a week? A month? 3 months?” and “What revenue numbers are the riskiest?” and “Does your budget or forecast assume any increases in current expenses (i.e., healthcare, salaries)?” These aren’t the only things you should be asking, but they might help get the conversation with your finance manager started!
SOME TIPS FROM OUR EXPERT, MICHELLE HARRIS:
Did you know most nonprofit organizations are faced with more and more regulations and compliance demands surrounding accounting each year? These same organizations lack the resources in order to maintain financial compliance and stay abreast of new regulations. In order to bridge the gap, the best solution is to collaborate with an organization that has the necessary resources and knowledge base. Through collaboration, National Able Network is able to provide solutions and add value to the organization in order to maintain compliance. Our clients are pleased with our ability to streamline the month end close process, oversee the fiscal audits, and provide expert advice on different financial topics. Our team members have more than 30 years of Non Profit Financial Management experience.