Streamlining nonprofit operations: The advantages of external bookkeeping

By Kyle R. Evans, CPA

Most nonprofit and business operators agree that bookkeeping and tax compliance are two areas frequently cited as the least enjoyable and most demanding part of running an organization.

Balancing crucial financial management without detracting from the core mission is challenging for many nonprofits. Outsourcing bookkeeping services can offer a practical solution. The following is a closer look at why it may make sense for your nonprofit to consider outsourcing bookkeeping services.

Lessening the staff burden

Nonprofits typically operate with tight budgets and limited staffing, leading to employees wearing multiple hats. A key staffer may juggle numerous duties, from payroll and bookkeeping to human resources. Managing the intricacies associated with staff – health insurance and other fringe benefits – can also be a daunting accounting task.

Outsourcing bookkeeping can relieve the strain and allow staff to concentrate on mission-critical roles such as engagement, fundraising, and program development.

More easily manage and track funding streams

For nonprofits, managing financial records starts with understanding at times diverse revenue streams. Regular donors, grants, one-off gifts, in-kind contributions, and gifts with restrictions attached require unique documentation and tracking.

Additionally, if some revenue sources come from your nonprofit's services, a professional accountant can ensure you follow the stringent reporting rules for charitable organizations.

All of this can easily overwhelm in-house staff, especially if they are tasked with other duties.

Cost-effective and efficient strategy

Hiring an in-house bookkeeper involves various expenses, including payroll, taxes, benefits, and training costs. Outsourcing transforms these unpredictable expenses into a fixed, predictable cost.

This stability is crucial for nonprofits, which often work with limited and fluctuating budgets. Outsourcing bookkeeping services can free up money to support the organization’s mission, as well as enhancing staff salaries or expanding the team, potentially reducing turnover-related costs.

Additionally, an outside accountant whose sole focus is your nonprofit is uniquely positioned to ensure your internal controls and procedures are sufficient, advise on best practices, and spot improvement opportunities.

Bottom line

Challenged by limited resources and complex financial requirements, nonprofit organizations can significantly benefit from outsourcing bookkeeping services. By entrusting financial management to experts, nonprofits can focus more effectively on their mission, making a more significant impact in their communities.

If you are interested in whether outsourcing your bookkeeping makes sense for your nonprofit, the Boyer & Ritter team is ready to talk with you about your specific needs.