Who doesn’t love the last-minute scramble to find lacking invoices or observe down uncashed checks so you possibly can end your month-end shut?
A great reconciliation course of retains your monetary information correct and updated. However with out the precise methods, this course of could be mind-numbingly time-consuming and susceptible to errors. By integrating fundraising and finance methods, data flows simply from reward information to journal entries, saving time, lowering the danger of fraud, and simplifying audits.
Right here’s how a linked fundraising and finance system can simplify reconciliation for nonprofit organizations, and what it might seem like in follow.
Why Is Reconciliation So Difficult?
Reconciliation is the method of matching monetary information from totally different sources, akin to reward information, invoices, and financial institution feeds, to make sure consistency and accuracy. If presents aren’t reconciled to the precise program—or any program—it’s troublesome to ensure you are adhering to donor intent.
For nonprofit organizations, reconciliation typically includes matching invoices to financial institution information, formatting information in Excel, and guaranteeing that contributions are accurately recorded in each the fundraising and accounting methods. The reconciliation course of could cause complications for a wide range of causes, together with:
Handbook Processes
Many nonprofits nonetheless depend on guide processes for information entry and matching information. This not solely will increase the danger of human error but in addition requires important effort and time.
Duplication of Efforts
Usually, the identical information must be entered into a number of methods, resulting in duplication of efforts and rising the chance of discrepancies.
Compromised Audit Path
And not using a clear and constant audit path, it may be difficult to hint transactions and be sure that all funds are accounted for. This could complicate audits, cut back transparency, and open the door to fraud.
Time-Consuming
Growth groups can spend 30-40 hours monthly getting presents into the CRM and getting ready information, whereas finance groups could spend 8-12 hours monthly matching information and posting to the final ledger. Simply think about what you might do should you had been in a position to reduce that point in half.
How a Linked Fundraising and Fund Accounting System Simplifies Reconciliation
Integrating fundraising and finance methods can tackle most of the challenges related to reconciliation.
Much less Handbook Information Entry
By connecting fundraising and finance methods, you enter information as soon as and it’s robotically shared between methods. This reduces the necessity for guide information entry, minimizes errors, and ensures extra correct information. You don’t have to decipher the place the funds have to go when your methods are linked.
Automated Transactions
You possibly can simply automate transactions so you may get contributions into the system rapidly and simply, rushing up the method of going from funding to disbursement. The faster you may get funds into your system, the quicker they can be utilized to assist your mission. And the automation additionally minimizes the burden in your employees.
Clear Paper Path
A linked system gives a transparent paper path from the preliminary reward settlement to the paid bill. This makes it simpler to hint transactions and ensures transparency.
Systematized Inside Controls
While you join your fundraising and finance methods, the methods cross information immediately to every aspect with out the necessity for reformatting or manipulating spreadsheets. The methods primarily mirror one another and there’s a pure place for contributions to land in your fund accounting system. This ensures consistency and helps keep inside controls.
What a Linked Reconciliation Course of Appears to be like Like
With a linked system, the reconciliation course of turns into rather more streamlined and environment friendly. Right here’s what it seems like in follow:
Seamless Information Circulation:
Information flows seamlessly from the event group to the finance group. Contributions are entered as soon as within the fundraising CRM—akin to Blackbaud Raiser’s Edge NXT®—and are then “pushed” into the accounting system—akin to Blackbaud Monetary Edge NXT®. This creates a single supply of fact that everybody can entry.
Empowered Groups
Everybody within the group has entry to the knowledge they want. This builds belief throughout groups as a result of everybody can see that funds are used for his or her supposed function.
Constant Consumer Interface
A constant consumer interface throughout methods makes it simpler for employees to make use of the expertise and reduces the training curve.
Automated Processes
Mechanically batch recurring presents so that they circulation on to finance, eliminating guide processes and guaranteeing that nobody unintentionally misses recurring funding.
Streamlined Info Sharing
With a linked fundraising and finance system, your employees all through the group has extra full data on how and when funds are getting used. Everyone seems to be on the identical web page concerning the aim of the funds—and might simply keep there. That readability makes month- and year-end processes extra environment friendly. There’s nothing worse than discovering an error after funds have been used and expensed.
Improved Audit Path
With linked methods, the audit path is evident and constant. For instance, clicking on the venture ID in Monetary Edge NXT from a journal entry that was pushed from Raiser’s Edge NXT will determine the matching document within the fundraising system. This makes it simpler to trace transactions and ensures that every one funds are accounted for.
Getting Began with a Linked Fundraising and Fund Accounting System
A linked fundraising and finance system can considerably simplify reconciliation for nonprofit organizations. By lowering guide information entry, automating transactions, and offering a transparent paper path, these methods save time, cut back the danger of fraud, and make audits simpler. In consequence, nonprofit organizations can focus extra on their mission and fewer on administrative duties. When you’re seeking to streamline your reconciliation processes, think about implementing a linked fundraising and finance system at present.
See a linked system in motion with a product tour that includes Raiser’s Edge NXT and Monetary Edge NXT.