Financial Technologies & Management- E-Newsletter for April

Upcoming Live Webinars

Dear {CONTACT.SALUTATION} 

We hope you find our monthly E-Newsletter useful for your nonprofit organization. We are pleased to provide you with access to our knowledge articles and live webinars!!

These live webinars will help Nonprofit Leaders, Treasurers, Executive Directors, Finance Directors, Finance Staff, and other Nonprofit Staff.

Our upcoming live webinars for financial management training are broken into the following areas.   Please feel free to click on any of these areas to learn more and register for these upcoming financial management training.

• Financial Management Training-Topics include Overlooked Benefits of Outsourcing Nonprofit Accounting or Why your Nonprofit should be using Nonprofit Accounting Software?  Our plan is start this back up this summer.
• Nonprofit Financial Forum-Our plan is start these back up this summer.
• MIP Fund Accounting-General Ledger, Accounts Payable, Accounts Receivable, Reporting, Financial Statements, and Drillpoint-Each webinar is 2 hours.  Please feel free to register for the FREE quarterly MIP user group meetings on May 24, Aug 24, and Oct 26.
• Nonprofit Finance Certificate-Effective Financial Management and Leadership-first part is focused on bookkeeping and accounting; and second part is focused on controller, CFO, and leadership roles.  Our plan is start these back up this summer.

Please contact us if you have any questions or feedback about our upcoming live webinars.  Feel free to check out our FTM blog or book a meeting on my calendar.

Best Regards,

James Simpson, CPA, CFE, CITP, and CGMA.

Budgeting must be more flexible in uncertain times

Most financial leaders focus too much time on budget variance analysis and not enough time on anticipating or planning the future.  By anticipating and planning, organizations can focus on what's upcoming regardless of the budget cycle or fiscal year end. 

In contrast to traditional budgets, a flexible budget my include a range of scenarios at a minimum should be prepared to include: best, worst, and expected cases.

A worst case would show you the critical expenses to your organization.  An expected case would include optimistic income and incremental expenses.  The best case would include all fundraising goal revenue and projected expenses.

It is important that an accompanying cash flow projection be developed to accompany the accrual based budget.  A cash flow projection will help to foresee cash flow problems even if the organization has a balanced or surplus budget.

We will review the budget best practices to be used when developing the budget along key goals for financial stability.

Please contact us if you need help to develop scenario budgeting and planning for your organization.

The full article provides further details on creating a more flexible budgeting process.

Many nonprofits face single audit requirements for the first time from federal stimulus funding

A great many nonprofit organizations that received stimulus funding from the federal government during the pandemic are now finding themselves facing additional audit requirements.

Nonprofits that expended $750,000 or more in federal funds in a single fiscal year are subject to the single audit, named after the Single Audit Act of 1984. These complex and often expensive audits add a major compliance burden. Many nonprofit organizations are discovering they’re not prepared for those requirements, and are turning to their accountants for help to make sure they can meet the deadlines and not fall afoul of the federal government.  The uniform guidance is a single comprehensive framework or sometime called a super circular.   The regulations are at 2 CFR 200.  The Uniform Guidance is broken into 6 parts which includes acronyms and defintions, general provisions, pre-federal award, post federal, cost principles and audit requirements.  The Nonprofit must prepare Schedule of Expenditures of Federal Awards (SEFA) which the full article has a sample SEFA.

There are 12 types of compliance requirements include activities allowed, allowable costs, cash management, eligibility, matching, period of performance, procurement, program income, reporting, subrceipient monitoring, and special test and provisions.  The full article provides a detailed explanation of the single audit requirements and contact us for audit preparation help.

Top Indicators of Nonprofit Financial Health

Nonprofit leaders have a difficult mandate to constantly balance money and mission, while collecting and sharing data on social and financial performance. With limited finance staff and multiple sources of financial information, it’s no wonder these leaders and their supporters often struggle to tell a clear, compelling financial story that makes sense of all the data.

How can nonprofit executives, funders, and advisors identify what matters most when examining finances? What are some trends and indicators that can guide us through an abundance of data and help assess true financial health?

The following are top indicators of Nonprofit Financial Health:

1. Revenue reliability-an organization's track-record of bringing in recurring dollars on an unrestricted basis year after year to create a balanced budget
2. Consistent surpluses-an organization has reliable revenue that covers operating expenses and creates surpluses necessary for organizational health
3. Appropriate liquidity-days of expense that can be covered with unrestricted cash on hand.
4. Full cost coverage-full costs include working capital, reserves, fixed assets replacement, or debt payments.
5. Ability to manage debt- Debt can be a critical tool manage cash flow for operation and capital needs.  However, we need to make sure that we can back these debt obligations without jeopardizing the delivery of programs and services.
6. Ability to steward facilities- Organization needs to be maintain and replace assets over time.  It is best practice to create a reserve to full facility improvements and replacements.  

Please contact us to help you define your indicators of nonprofit financial health and help you to achieve them.

Register for FREE Quarterly MIP User Group Meetings for 2023 on May 24, August 24, and October 26 at 12:00 EST 

We are looking forward to reconnecting with our MIP clients during 2023 and our pleased to be able to bring back our quarterly MIP User Group Meetings that we have facilitated since April 2000.

As your local certified MIP Trainer and Consultant, we will provide you with helpful tips and tricks, best practices, and software updates.  We will provide 1 hour CPE for attendees.

MIP Quarterly User Groups will occur as follows so please go ahead and register for each FREE meeting:

Spring 2023 on May 24, 2023 from 12:00 to 1:00 EST

• Everything you need to know-MIP Accounts Payable
• Tips and Tricks for Accounts Payable
• Bring your MIP user questions to be answered
• MIP Software Updates including MIP Cloud

Summer 2023 on August 24, 2023 from 12:00 to 1:00 EST

• Everything you need to know-best use of MIP for Audit Preparation
• Tips and Tricks for better audits
• Bring your MIP user questions to be answered
• MIP Software Updates including MIP Cloud

Fall 2023 on October 26,2023 from 12:00 to 1:00 EST

• Everything you need to know-best use of MIP and Microix for Budgeting
• Tips and Tricks-Better Budgeting using MIP and Microix
• Bring your MIP user questions to be answered
• MIP Software Updates including MIP Cloud

Please click the full article for our MIP Training including 8 virtual classroom sessions each month and MIP user group. 

Our firm provides all the levels of accounting your nonprofit needs including bookkeeping, accounting, controller, CFO, and software advisory services for nonprofit accounting software including MIP, Microix, QuickBooks, Sage Intacct and AccuFund

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