There are some not for profits that have the luxury of a finance department staffed with one or more professional accountants that have years of experience. But for most organizations finding a solution to the responsibility of the finance function can be difficult. Some organizations use volunteers to take care of their accounting and finance needs. However, too often the volunteers have no experience in not for profit accounting or the basics of good bookkeeping.
Sometimes it may make better sense to outsource your finance function rather than hire a staff person for the job. A company can give you access to expertise that you need but currently don’t have or could never afford to have. In many cases hiring a company can help you reduce overhead costs and also enable you to quickly adjust for program changes. Hiring a company also contributes towards dealing with financial risks. For example, in smaller organizations financial controls such as segregation of duties can be challenging due to the limited number of staff. The size of budget and level of complexity of your organization will likely determine whether you go in the direction of a bookkeeper or a bookkeeping firm.
In your search for the right person or company, you want to ask similar questions as when hiring staff or a consultant. Some of the questions you should ask are:
- Have you worked with not for profits previously?
- What size and type of not for profits have you worked for?
- What services can you provide to our organization?
- What are your fees?
- What is your availability?
- Will our staff need any training to work with you?
- Are there some challenges that you anticipate?
- Can you provide references?
Finally once you do make a decision make sure you have a written agreement. It should outline the expectations you have from the company/person you are hiring along with a termination clause.
As not for profits and their boards pay closer attention to the finances of their organizations, making smart decisions on how the financial function will be managed is essential. As with any purchase of service you need to do your due diligence before making your final decision.