You often have to wear a lot of different hats when you’re running a nonprofit organization. As you grow, it can be difficult to continue to wear each on an everyday basis. At Beyond Accounting & Tax, we can help take some of that burden off your shoulders with outsourced CFO services. If you’ve been managing your finances to this point, it might be time to let go of the reins and let somebody else take over. If you’ve never considered hiring a CFO for your organization, we have a list of five things they can do for you and your nonprofit organization.
No matter how much money you have as a nonprofit organization, you need to have a budget. This includes money coming in in the form of donations and money going out as employee payroll, supplies, marketing, and anything else you need to pay for. Balancing your budget is a critical part of maintaining trust with the outside organizations you work with as well as your internal employees. Your outsourced CFO can take charge of your budget to make sure that the complexities of each transaction work out and are perfectly balanced in the end.
Manage cash flow
As your nonprofit organization grows, you’re going to see increases in cash flow. This includes donations from third parties or revenue from contributions, product sales, or membership fees. Having multiple revenue funnels is a great way to grow your organization, but managing cash flow from each can get tricky. A financial expert like a CFO can monitor each revenue stream and use it to manage your budget along the way.
Provide financial guidance
Something important to remember about running a nonprofit organization is that an entity that’s not for profit can still bring in money. Nonprofit indicates that your organization simply isn’t making money year over year, which means that your financial records need to balance out with every dollar allocated somewhere within the organization. Keep in mind that this doesn’t mean your bank account has to be empty. Instead, you should have money allocated for a cash reserve. A CFO can help with this.
Because nonprofits often keep their books so tightly balanced, an influx of revenue can be a stressful time. While there are much worse problems you can have, you might not know what to do with it at the time. You might have questions like, Where does this money need to go? What can we do if we turn a profit this year? Your CFO can answer these questions by guiding you as to the best designations to give the money.
Create financial presentations
Your organization is going to have board members that want to see what you’re doing with the funds that you’ve had available. This can come in the form of a quarterly or annual meeting with board members, program directors, and members. Your CFO can create a presentation for you to share at these meetings or informational packets to disperse among interested parties.
Prepare tax documents
Nonprofit organizations are considered exempt from federal taxes. However, this doesn’t mean you’re exempt from paying payroll taxes. An outsourced CFO can help prepare tax documents for the end of the year to distribute to your employees. You also need to put together documents that are necessary for your IRS Form 990 to report your nonprofit status.
Get in touch to learn more
You don’t have to bear the full weight of financial responsibility for your nonprofit organization. Hire an outsourced CFO today to relieve some of the financial burdens you deal with so you can focus on other aspects of your day-to-day operations. If you’d like to learn more about how an outsourced CFO can help, contact us at 571-410-0158 or send a message via our contact form. We look forward to hearing from you.