Budgeting & Reporting Tips for Non-Profits – Part 2 of 3

In Part I of this three part series on creating a world class budgeting and financial reporting solution, we talked about 1) what to budget, 2) the advantages of using budgeting software and 3) allocating overhead.     In Part II, we continue that discussion by looking at ways to make your budgets and your financial reporting more meaningful.    The first step in doing that is to integrate your budgets into your day-to-day decision making processes.

TIP # 4 Make it easy for people to manage against their budgets.   Provide month-to-date budget vs. Actual reports.    Better yet, publish your reports to an internal web portal and/or provide people with the ability to run their own reports without having to access your accounting software.    Make it easy for them to see on a day-to-day basis how they stand versus budget.    And, allow them to drill down into detail if they see something amiss.   With higher end accounting software solutions like Microsoft Dynamics GP, this is standard functionality.  If you don’t have a system that offers this feature, however, common reporting tools like Excel and SQL Reporting Services may be good alternatives.

TIP # 5 Implement a web-based requisition management solution with user-defined approval workflow and real-time budget verification.    This allows you to proactively manage your expenses without requiring a formal encumbrance process.     At the time that a purchase requisition is entered, the software checks the available budget and immediately notifies the requester and subsequent approver if the purchase is going to exceed the budget.    With a good requisition management software application like ReQlogic you will have better visibility into your spending and purchasing commitments and you will be able to catch budget overruns before they happen.

Another way to make your financial data more meaningful is through comparison to historical figures.

TIP # 6 Show historical trends.    Your financial data has much more value, for example, when shown in context with what happened last month or what happened the same month last year.     Better yet, use your software’s financial report writer to show the last five years side-by-side, or maybe show a 12-month rolling forecast that shows actual figures through the current month and budgeted figures for future months.

Maner Costerisan is a Michigan-based CPA and Technology Consulting firm specializing in Not-for-Profits.    As a CPA firm, we not only understand technology, we understand the unique reporting requirements of 501(c)3’s and other non-profit organizations.   Whether it’s for your internal use or for your board, we’ll make sure that you have the information you need when you need it.

For more information on Microsoft Dynamics GP, Forecaster and other budgeting & reporting solutions for not-for-profits, contact James Meyer at jmeyer@manersolutions.com.

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ERP professionals providing insight and advice for not for profit organizations.