Nonprofit Finance: Contracted or in-house?
October 6, 2011 3:08 PM Subscribe
[Nonprofit Filter] We're investigating options to shop out the major financial needs of our nonprofit organization. If we do this, what tasks should be kept in house and (if we no longer have a dedicated finance person) who should do them? We are considering this option, but have a fair number of questions about how other small NGOs manage their financial administration. Is yours in-house, contracted, a combination of both? What are the benefits/challenges? Lots of questions and would appreciate experienced feedback!
posted by anonymous to Work & Money (7 answers total) 4 users marked this as a favorite
We've had some difficulty finding the perfect combination of office manager+bookkeeper at our stable, well-established, small-town nonprofit. We finally decided to investigate splitting the position entirely and shopping out the more complicated tasks to a local bookkeeping service (this would allow us to focus on bringing in a smart, charismatic, organized OM without worrying about extensive $$ skills).
A few facts:
*We have a staff of 10 and a budget of $1M.
*We use Quickbooks and currently its contents and management are mostly a mystery to everyone except our outgoing admin/bookkeeper (this person will likely leave under unfavorable conditions...);
*There is one local bookkeeping service available to us.
So my questions are these:
*Do you have an in-house finance person who does everything? (is there a way to learn how many nonprofits do?). If so, are they f/t finance or do they have other duties? Also, how do you assure a sound position if this person gets hit by a train? And what would you do if that happened?
*Do you use a contracted bookkeeping service? If so, what finance stuff is still done in-house? (e.g., accounts payable? Basic QB reporting for grant purposes?). And who does it if not a dedicated finance person?
*If you use a contractor: Do they come to the office? How often? Do they have a desk? A mailbox in your office? How much annually do you budget for your contracted bookkeeper? Or how much did you pay in your last FY? Are you happy with your arrangement?
*What finance docs do you take to your monthly board meetings? And do you generate these in-house or call upon your contractor?
I wonder if it would be difficult to transition to a contractor some of the more unique-to-us financial tasks:
*A somewhat involved method of using formulas to allocate general expenses (e.g. office supplies, electric bill, rent) across grants--done with every bill paid, I think (does anyone else do this? and how to you go about it?);
*A dynamic customized Cash Flow spreadsheet that shows our FY by month at a glance, with funding sources, inflows, outflows.
Please feel free to share what works with your organization, any suggestions you might have, if you recommend shopping payroll to an entirely separate online service (and what one pays for this), any drawbacks to this, plus any web sites that could prove useful in guiding us through this investigative process.
Keep in mind we are in a small town with few choices. We're happy to consider online alternatives if they exist. We want to streamline, be effective and secure in any transition and think it might suit us to move most of our finance out of the office if we can address the above concerns.