5 Benefits of Outsourced Accounting for Nonprofit Organizations

Outsourcing accounting services can be a valuable solution for many nonprofit organizations. With limited resources and tight budgets, nonprofits often struggle to maintain efficient and compliant financial operations. By leveraging the expertise of outsourced accounting professionals, these organizations can ensure that they are operating efficiently and effectively. Leaving them time to focus on their core mission. Whether you’re a small charity or a large foundation, understanding these advantages can help you make informed decisions about your financial strategy. Let’s dive in!

Why Nonprofits Should Outsource Their Accounting Function

Nonprofits have unique financial reporting requirements and must maintain compliance with various complex regulations. Outsourcing the accounting function gives organizations access to a team of experienced accountants with specialized knowledge of nonprofit accounting. These individuals are able to leverage industry best practices while also being more cost-effective for the organization than hiring in-house staff and giving leadership more time to focus on their mission. Additionally, organizations have access to a wealth of firmwide knowledge, ensuring that even the most complex issue is handled by a team of skilled professionals.

Benefits of Outsourced Accounting for Nonprofits

Compliance and Expertise

Nonprofits face complex compliance requirements, including audits and grant reporting. Outsourcing provides access to accounting personnel with years of experience with these requirements. Outsourced providers can often help management effectively communicate best practices, requirements and results to key stakeholders, including board members.

Value-Added Resources

Nonprofits often operate with tight budgets and limited staff. Outsourcing your accounting allows them to access professional services without the cost of in-house personnel which often includes salaries, benefits, training and additional overhead. Additionally, organizations can gain access to the best accounting tools and technology resources available in the industry. Outsourcing can also provide consistency in personnel. Given the high turnover rates and recruiting challenges nonprofits often face, having a consistent team of outsourced professionals working for you saves the Organization time, money, and resources that often come with training new staff.

Simplifies Organizational Complexity

Managing restricted funds and multiple funding sources can be challenging. Outsourced accounting services bring the expertise needed to handle these complexities effectively, ensuring proper allocation and reporting.

Improve Efficiency

Many nonprofits rely on outdated, manual processes that can be time-consuming and error-prone. Outsourcing to experts can streamline these processes with modern, efficient systems and automation, helping organizations best use their resources.

Provide Focus on Purpose

Leadership can concentrate on the organization's core mission rather than getting bogged down with back-office operations.  Outsourced partners can provide insights, metrics and financial analysis that will help key decision makers turn their numbers into actionable objectives. This ensures that their energy and resources are directed towards achieving their goals.

How Nonprofits Can Choose the Right Outsourced Accountant

Partnering with an outsourced accounting firm familiar with the nonprofit industry is crucial. Nonprofits should look for firms with proven expertise in their sector and a specialized staff familiar with industry regulations.

In addition, make sure the firm’s services can support all your needs, such as financial reporting, tax compliance, and forecasting. The outsourced accounting firm you choose should have robust security measures to protect sensitive financial data. Also, aligning with a firm that shares your values can create a more collaborative partnership.

Conclusion

By leveraging an outsourced accounting team nonprofits can better allocate their resources towards their core mission and make a greater impact in their communities. If you’re considering outsourcing your accounting needs, please contact us below for more information. Our EisnerAmper team is ready to assist your organization in streamlining its operations, to fully maximize your nonprofit’s potential.