Excellent financial management is important in any business, but in the nonprofit industry, staying on top of finances becomes even more vital. With nonprofits subjected to annual accounting and financial culpability to donors and the government, financial management needs to be accurate and up-to-date. Poor financial management can leave a not-for-profit on the brink of failure, but good management can help that same organization to thrive.
Whether you’re running the largest nonprofit in your state or operating a fledgling operation in its first year, refining and improving your financial management can contribute to the not-for-profit’s success. Below are some tips that nonprofits, both big and small, can implement for more efficient, accurate, and productive finance management.
Transition to the Cloud
Cloud-based technology has the potential to streamline and improve your financial management. You can see the importance of the cloud in many industries, including the changing healthcare financial management field. With advancing cloud technology, more nonprofits are embracing the many benefits that the cloud offers — and it’s time for your nonprofit to follow suit.
With cloud-based technology, your human resources (HR), general document management, invoicing, and accounts receivable/payable systems can all be located on off-site storage. This offers many benefits. When you’re using technology in the cloud, you won’t have to upgrade hardware or software as old technology becomes obsolete. This means less overhead, and that can amount to significant savings, especially in larger organizations. Because costs are reduced and there’s less hardware to purchase, you can, in turn, scale up or scale down your finance department as needed.
Cloud-based finance management is also more efficient than dealing with multiple programs on your computer and, even more critical, paper copies of bills and other statements. When documents are hosted in the cloud, you can sign, store, and manage them nearly effortlessly; plus, they’re easier to secure. Cloud management also tends to streamline processes, saving you valuable time and allowing your employees to be more productive. Multiple employees can easily collaborate in the cloud and sharing documents is fast and simple.
One of those processes that can be streamlined is invoicing. It can be an extremely time-consuming process, especially if it’s done manually every month. A cloud-based non-profit invoice template enhances a nonprofit’s professionalism, can save time, and can even improve accuracy. When a template is paired with cloud-based management software, an organization can create recurring invoices, easily calculate subtotals, taxes, and totals, and can make it easy for a donor or business to pay the invoice online.
These online payments can further streamline the management process, meaning organizations receive their money sooner, the invoice is automatically identified as being paid, and the staff does not need to spend additional time following up on the invoice.
Refine Fundraising Efforts
Focusing on boosting your fundraising efforts can help to improve program budgets and allow your organization to do more of the work that you specialize in. It’s all too easy to let fundraising get stagnant, but revisiting and refining your fundraising can boost donations and increase your financial stability.
Start by promoting donor engagement with the goal of turning first-time donors into valuable recurring donors. You may want to hold gatherings for prospective donors, and should continuously focus on gathering and developing success stories that you can share with donors.
When you send out fundraising appeals, work with a carefully curated list. You should always know who you’re reaching out to, and you should tailor your appeal to reflect their values and reasons for donating. Once you have people in your database, take the time to personalize your requests with details like their first names, a quick note about their children or pets, or a reference to their previous donations.
This may also be time to consider expanding the ways that donors can give. A streamlined online donation option is a must. Create a “donate now” button that you feature prominently on your website. Thoroughly test the online donation option and design the online form so that it requests only minimal details from the donor, making it as easy and quick to donate as possible.
Implement a Grant Management System
Tracking grant due dates, applications, and interim- and end-of-grant reporting is a challenging task, especially when it’s shared between multiple staff at your organization. But when a missed deadline could mean losing out on a grant, improved grant management needs to be a priority. Implementing a grant management system can help to refine this process and make the tracking easier and more accurate.
There are many different grant management software programs available, and many of them are hosted in the cloud for that same easy accessibility and ease of use discussed earlier. This can be an ideal solution when multiple people are working to manage grants and need to access and edit records simultaneously. Software can help you to keep track of deadlines, ensuring you maximize the grant opportunities available to you.
Implementing even a few of these financial management strategies can make for big improvements to your not-for-profit. In many cases, the investments you’ll make in some of these changes will pay off in terms of increased productivity and accuracy for your organization.