The nonprofit finance department of the future is mobile, agile, and insightful. The nonprofit finance department of the future has arrived today.
The continued evolution of cloud based software tools has created an unparalleled opportunity for nonprofit organizations to better leverage staff and improve efficiency by reducing reliance on manual processes and tasks. These tools provide speed, increased productivity, enhanced controls, and real-time information for decision makers 24/7—anywhere—any place.
The same Pew study reported that 57% of all adults have used their phone to do online banking. These percentages will increase as people who grew up with the technology continue to enter the workforce.
As with the adult population at large that Pew surveyed, your staff falls within this trend and also performs their personal banking online via smartphone.
Is it reasonable to expect your staff to handle their professional finance responsibilities in a different manner?
Is your program staff required to email or print Excel based expense reports and vendor check requests that are manually reviewed by several people? Once the proper approvals are obtained, is your finance staff then expected to manually key information into an accounting system? Are the resulting checks manually printed or are ACH’s manually keyed into the banking system? Do you have a manual process that is existing inefficiently in a high tech world that does not work well for your modern day staff?
Let’s contrast the manual processes discussed above with the Finance Department of the Future.
The Finance Department of the Future is one where staff uses mobile apps to take and upload pictures of receipts, mileage reimbursement calculations are automated using mapping apps, and credit card data is automatically synchronized.
The Finance Department of the Future is one where vendors email their invoices or upload them into a system where they are then routed online for coding and review by staff. Time crunched program managers will review and approve vendor invoices and employee expense reports from anywhere, at any time-via smartphone. They will see receipts and explanations through mobile apps, which may look something similar to the below image.
Once approved, these transactions will automatically sync with the accounting system, thereby eliminating redundant data entry. The payment approver will no longer have a stack of papers to review and approve. The payment approver will go online to authorize payments, where it will be processed immediately by the app to automatically send an electronic payment or a check. Electronic approval policies are resident in the software, which enhances the control environment by reducing the risk of human error.
The Finance Department of the Future has the payables process largely automated and finance resources are re-directed to more value added work. Our survey of the industry shows that these workflow tools are currently being used by a little under 40% of nonprofit organizations:
Finance department resources will always be heavily focused on monthly financial and management reporting. The Finance Department of the Future is leveraging cloud-based technologies to increase productivity and compliance. Online month-end close and reconciliation workflow tools are changing the way that nonprofit finance teams function. Managers now oversee the process through dashboards that send a notice when reconciliations are out of balance with the trial balance. The back and forth process related to reviews is done online in an automated workflow environment. Data about an orderly closing process is gathered, including cycle times, and details of any process bottlenecks serves to inform process changes. Enhanced consistent communication helps to enforce timeliness and accuracy of reporting.
The Finance Department of the Future is also making financial information more meaningful. Management reports include the metrics that drive the business along with the financial results. Using the same data gathering and review techniques that are applied to financial information, these finance departments are gathering, vetting, and reporting the key business metrics.
Finance is now uniquely qualified to serve as the single source of truth within the organization. For example, no longer are there disconnects between fund raising and finance when it comes to donor data. Everyone has access to a standardized set of data for decision-making purposes.
Cloud based financial applications allow budget managers access to management reporting from anywhere they have internet access. Dashboard views are tailored to each user’s area of responsibility. Users have real time online access and can drill down to details. Accountability is enhanced and decision-making is more agile in our mobile world. The days of using a static set of financials that is emailed or printed by finance is going away.
Mobile-Agile-Insightful, the evolutions in cloud based accounting tools are re-inventing the finance function. Have you readied your nonprofit finance department to operate efficiently in our digital world? The Nonprofit Finance Department of the Future has, and you can start today.
If you are a nonprofit organization looking for cloud based tools and industry experience, contact T3 Information Systems to help you evaluate options.
By T3 Information Systems, Intacct Partner Washington DC