A nonprofit’s monthly financial reports reveal critical data to the organization’s management and board. But these users can sometimes want to see the reports so soon that they ask accountants to hurry up the process and cut short procedures that are necessary to avoid distributing wrong or misleading results. Below are some problems accountants experience, along with some suggestions for speeding up completion of the reports while preserving their integrity.
Waiting for bank statments to arrive: Sometimes, your checking account statement doesn’t arrive in the mail for a week after month-end, and you have to hold up other procedures because you haven’t reconciled your accounting records to the bank. But you don’t have to wait anymore! Thanks to internet banking, you can have access to the checking account on-line. Internal controls over cash are not compromised if you have read-only access.
Waiting for invoices from contractors, suppliers and vendors to arrive: Ignore any that will have a negligible effect on either the reports you’re preparing or on billing to funders. If they’re too big to ignore, contact the contractor and ask for an emailed invoice or an estimate. You can post estimates to Accrued Expenses using a reversing entry to the GL; then when the bill comes in, post it to AP as you normally would.
Problems reconciling a balance sheet account: We’d all like to tie out every single balance sheet account to the penny, but sometimes perfection gets in the way of timeliness. If your reconciliation of deferred revenue is off by $5 or your prepaid expenses seem a tiny bit low, will the statement’s users make different decisions than they would if these accounts were completely reconciled? Probably not. Issue the statements and complete the reconciliation later.
Waiting for back-up for credit card purchases: Some employees just can’t seem to get their receipts turned in by the time you want to close. Rather than hold-up reporting while you wait, you can post the charges to Employee Receivables, an asset account, and continue with your close.
Vendor invoices missing expense coding, or with coding that’s wrong: It’s worth your time to get accurate and complete expense coding - account, program, and funding source - before you post transactions. You can help managers and others get it right by using a custom-made rubber stamp that has a blank space where they are to write each bit of data that you need. Or you can set up a purchase order system, which requires the coding to be provided before a purchase is approved.
Requests for reports at the last minute: Fielding a request for a grant report by tomorrow can rapidly lead to overtime as when it come from your boss! It’s very hard to say ‘no’ under these circumstances. Knowing what reports are scheduled by keeping a calendar of upcoming due dates can be quite helpful. At month-end before the closing process gets going, ask your management team about other needs they will need your help meeting in the next week or two.
Don’t expect to resolve all of these difficulties in one month. Tackle what you can, and it won’t be long before you see results.