How to make your Not-For-Profit make more IMPACT with less administration – Budgets and Cash Management
In our last two blogs, we discussed two challenges facing not for profits recruitment and compliance, and now we will tackle budgets and cash management. We want to show you some technologies that can help you overcome the troubles around budget and cash management in your not for profit.
Let’s face it, people are busy. You want to ensure you are setting your management and directors up for success. Some may say, well it’s a not for profit and we can’t spend the money on software. To that I say, open this up for discussion and you may be surprised what you hear. If you are having trouble getting directors, you may find out that it is because they are leery of the time commitment, the risk etc etc. Technology can create an environment where you are reducing the time commitment of those involved without reducing the quality and compliance level.
This may in fact save you much more than the software costs. You have to consider both the time costs including burnout of staff and management and actual costs (you may save administrative wages that offset the costs). Also, never assume volunteer work is just “free”. Volunteers are there because they care. Don’t take advantage of this or or will cause burnout. One time that can cause a significant amount of resources from a not for profit is managing its budgets and cash management.
Budgeting and Cash Management
Whether you are in a not for profit or a for profit enterprise, cash is the driving force. Having cash and allocating cash over the projects and programs your not for profit undertakes is what it is all about. Ensuring that your not for profit has the cash to fulfill its obligation and meet its goals.
Not for profits are then ran by board with varying levels of backgrounds including financial expertise. I have seen stats that less than 50% of Canadians use a budget. Cash management and budgeting is a skill. Software’s for this, do not provide the skill but they allow you to provide more visual means to what you are presenting. For example, with one client I was showing an excel budget and also shown a pie graph that showed the same information. The duration of the subsequent discussion and questions referenced the pie graph. Visual presentations generally gets a better response. While not all cash and budgeting tools incorporate visual tools, it is helpful that they can present the same information in different formats. We all learn in different ways.
Technology for Budgets and Cash Management
Xero Budget Manager. Xero accounting software has a built-in budget manager to allow you to create or import a budget. You can then compare actual’s as you go.
Float is an online cash flow management tool. It is an add on to Xero that can allow you to create more detailed cash budgets.
Although a regular spreadsheet can be boring. Remember that excel has a lot of embedded features that most people forget about. Sometimes the extra few minutes to learn how to create some charts can lead to much better conversations at your board or management table.
While we note that this list is short, please note continue to scour the app marketplace for better NPO budgeting tools. As of yet, we haven’t been satisfied with what we have seen. However, we will continue to research and review. If you know of a great app for not for profit budgeting and/or cash management, please let us know so we can take a look.
Virtual Heights Accounting
A CPA firm that focuses on process automation using technology. We offer year end, tax, CFO, controllership and bookkeeping services and specialize in professional services, e-commerce and the not for profit sector. If you have any questions, please contact us from our website. https://vhaccounting.ca/contact-us/