"

Estimated reading time: 5 minutes, 48 seconds

Misconceptions about Nonprofits and Technology

A nonprofit has an auditor coming in tomorrow. The staff is nervous and has spent days pulling files, canceled checks and more paper documents for the on-site visit. They have many questions: What will the auditor want? Is this enough documentation? What happens if we can't find what they need? Once the auditor arrives, more time will be spent accommodating him or her and ensuring that all the needed information is in the right hands for review.

All of these labors—while necessary to preserve funding—take a significant chunk of time away from employees that should be focused on delivering on the organization's mission and goals. What if there were a way to cut that preparation time by half? Or even less?

Sound familiar? Nonprofits share a myriad of challenges of which an audit is just one. They are lean on resources. Budgets are limited. They must adhere to strong internal controls to protect the organization and preserve public trust. One instance of fraud or a missing payment can have severe repercussions. It can jeopardize government funding, destroy public perception and lead to a significantly reduced capacity to support their missions.

Technology is the force that can circumvent these challenges and fortify a nonprofit's internal controls, transparency and efficiency. Yet today, some nonprofits are still hesitant to implement technology to fulfill some basic operational needs. Following are four common misconceptions about nonprofits and accounting technologies and how your firm can address them.

1. Will technology make my nonprofit job redundant?

Does technology mean an automatic default into downsizing? No.

Technology breeds efficiency. Through the adoption of new technology, inefficient and manual efforts move to the cloud for automation, real-time tracking, digital payments, reinforcement of internal controls and more. Traditional accounting or financial roles such as data entry or manually compiling reports in Excel often decrease in frequency (or are eliminated altogether).

When technology eliminates manual and time-consuming tasks, employees have greater bandwidth to contribute in more meaningful capacities, resulting in more support for nonprofits with limited resources.

Many of these employees may already be involved in more strategic tasks that are central to the mission and success of the nonprofit. So it becomes a question of how to reallocate your employee resources. Will you do more fundraising? Will you improve the service quality? Will you provide additional services? Will you begin projects that have been on the back burner?

In the end, employees whose daily tasks are more aligned with the mission of the nonprofit will tend to be more committed to the organization.

2. Aren't nonprofits resistant to technology?

No. In fact, they're often leading the charge to adopt new technologies.

Technology has woven its way into everyone's life, and the same is even truer with nonprofits. One just has to look at all the crowdsourcing, microlending and social media promotions to see the ways nonprofits use technology every day.

Familiarity with it and its general benefits is high. Millennials continue to join the nonprofit world in leadership positions, bringing their technology acumen with them. Organizations look to the new generation for their technological leadership, whether that is as simple as optimizing social media or using tools that make fundraising, marketing, scheduling, paying bills or working with your mobile easy.

Accountants can leverage this interest by demonstrating the benefits of new technology.

For example, one nonprofit had a paper-based model for approving bills and signing checks. The executive director who co-signed checks often traveled on behalf of the organization. This slowed down the AP process considerably and contributed stress around late payments, scheduling and more. When a technology arrived that allowed the executive director to approve and sign checks through the cloud, it meant that task could be completed from anywhere at any time with a mobile device. It allowed the executive director to focus on value-enhancing responsibilities for the nonprofit as opposed to making time to sign paper checks.

3. Nonprofits don't have the expertise or budget to handle new technology implementations.

Traditionally, technology implementations translated into enterprise-based, gigantic offerings that spanned several months or years. They required time and expertise for customization and training and resulted in high costs.

With the cloud, implementing new accounting technology has transformed into a much simpler process. Instead of in-depth implementations filled with consultants and expenses, cloud-based technology can begin with a simple sign-up. Users can customize preferences in a few clicks and integrate additional apps or modules as needed.

In other words, if you can use Facebook, text or access a mobile app, you can use today's technology. You don't have to be an expert or a CPA.

Costs often arise as an insurmountable hurdle to adopting new technology, an argument that is quickly losing ground. The costs of cloud-based technology often arrive in a budget-compatible, subscription-based format. Plus, the question that matters here is the overall ROI. What is this technology replacing? Does it cut the time and labor normally necessary to complete these responsibilities? Has it reduced the need for supplies such as postage or envelopes? What money is the nonprofit getting back in return?

One ROI example centers on those time-consuming and expensive audits. An accounting firm that works exclusively with nonprofits discovered that by applying cloud-based bill payment technology, it reduced audit costs for clients by 35 percent.

4. Will technology take away control of processes?

For nonprofits, processes serve an incredibly important function. Each cent, decision and result within the organization should be properly authorized and tracked. A lack of internal controls can lead to a loss of funding.

It isn't uncommon for nonprofits to show concern about changes and the possibility that critical processes may suffer as a result.

However, technology offers a pathway to greater security and audit-readiness. First, it takes hard-to-track, bulky processes and converts them to online, easily traceable activities. With one login, you can see who reviewed a bill and which two individuals authorized its digital payment.

Second, it adds automated workflows to speed up processes. These workflows follow your organization's guidelines to reinforce internal controls.

Third, security provided by cloud-based technologies offers unprecedented levels of protection for your information such as encryption, permission-based access and more.

Finally, technology provides your auditor with a pristine view of how the nonprofit operates and all its controls. The auditors can log in to an audit level of access to review payments, authorizations, check images and more.

These benefits are enhanced by other cloud-based technology additions such as mobility, access anytime, anywhere and increased collaboration as necessary.

Next time you talk to a nonprofit client, don't hesitate to bring up accounting technology. The reservations you think may apply could herald its eventual acceptance.

 

Mark Gervase
Mark Gervase, director of product marketing for Bill.com, works with accounting firms and bookkeepers to grow their businesses and achieve efficiencies through automation and cloud technologies. A former CPA, he has a background in financial technology, and holds an MBA and BA in from the University of California, Berkeley.
Read 6862 times
Rate this item
(0 votes)

Visit other PMG Sites:

Template Settings

Color

For each color, the params below will give default values
Tomato Green Blue Cyan Dark_Red Dark_Blue

Body

Background Color
Text Color

Header

Background Color

Footer

Select menu
Google Font
Body Font-size
Body Font-family
Direction
PMG360 is committed to protecting the privacy of the personal data we collect from our subscribers/agents/customers/exhibitors and sponsors. On May 25th, the European's GDPR policy will be enforced. Nothing is changing about your current settings or how your information is processed, however, we have made a few changes. We have updated our Privacy Policy and Cookie Policy to make it easier for you to understand what information we collect, how and why we collect it.