When you’re running a busy charity or not-for-profit organisation, one of your big worries is the financial management of the organisation. You need to know, in detail, what funds are coming in, how they’re being spent and – crucially – what the social return is on these investments.
Scrutiny over the way your money is managed has never been higher, thanks to recent high-profile stories in the media. So having the best possible bookkeeping, accounting and financial systems to help you keep on top of your numbers is fast becoming a ‘must-have’ rather than a ‘nice-to-have’.
So, should you be thinking about updating your current accounting system to a modern, cloud-based system?
The answer is an emphatic yes, and here’s why…
The problems of paper accounting and old-school technology
Getting a new accounting system is unlikely to be number one on your current ‘things to do’ list. But, really, it should be there at top…underlined…with a circle around it.
The way many charities and not-for-profits carry out their bookkeeping and accounts hasn’t changed much in decades. There are still a lot of paper files, a lot of dusty filing cabinets and a lot of out-dated desktop accounting packages.
In fact, there are plenty of smaller charities that are working out their accounts in an Excel spreadsheet, without any kind of accounting system in place at all!
Why is this a problem? Well there are plenty of reasons why paper accounting and desktop software are no longer the best choice.
· Lots of paperwork and admin – dealing with finance forms, paper files and keying in manual data to spreadsheets takes a LOT of time.
· A poor view of your funds – the historic, out-of-date numbers don’t give you the current view you should have of your funding.
· Time-consuming year-ends – getting paperwork, receipts and data together, and sending them to your accountant, takes a lot of time and effort
· A big focus on basic compliance – most of your accountant’s time is spent making sure you’re compliant with financial, legal and tax regulations.
· Little time for strategic advice – the disproportionate time spent on compliance means there’s less time for strategic guidance from your advisers
· Costly to maintain – running desktop software, the required hardware and the IT back-ups can be expensive.
And that’s just the tip of the accounting iceberg!
So, what’s the alternative?
Cloud accounting – a better kind of financial management
The option you should be looking at is cloud accounting.
What’s that? Well, it’s accounting and finance software that sits in the cloud – in the same way your email works online in Gmail, or you log in to your photos and messages in Facebook etc.
With cloud software, nothing is saved on your local hard drive. You log in through your web browser, or mobile device, and use the software remotely.
And that’s better for a whole tranche of reasons:
· Easy, mobile access – you’re not tied to the office, or to one machine. Check your numbers from anywhere, on your laptop or on your phone/tablet.
· A better way to collaborate – no more sending paperwork and memory sticks to advisers: just give them cloud access to your numbers.
· No back-ups or version problems – your data is stored securely in the cloud and you’re always using the most current version of the software.
· More secure – there’s no data on your local drive, and all your cloud information is encrypted and behind firewall protection.
· Flexible financial tools – cloud accounting packages give you all the tools and reporting you need to get on top of your financial management
How does the cloud benefit my charity?
Using cloud accounting takes your financial management to a whole new level.
Rather than spending hours of you and your team’s precious time on admin and data entry, you get a streamlined accounting system that actually tells you how the charity is performing.
And when you add our own unique knowledge and experience of the not-for-profit sector to the power of cloud accounting, you’re getting the software tools as well as the insightful, practical advice your charity needs.
So how does the combination of the cloud software and Gerrard Financial’s strategic advice help your charity?
· Reduced paperwork – cut back on your financial admin time and reduce the cost of storage.
· Fund reporting – report across different cost centres and different funds, so you get a view of the remaining balance on a given pot of funding at the push of a button.
· Easy year-end accounting – a more streamlined year-end process with all the transactions, receipts, paperwork and figures already in the cloud.
· Less time on basic compliance – bookkeeping and returns take less time, so there’s more time for us to give you meaningful strategic advice.
· Cost-effective – the reduced cost of meeting your compliance needs leaves money in the pot to pay for in-depth advice, planning and training.
· Visibility of financial position – your trustees and management board get a better view of the charity’s financial position. We can give you regular management information, that’s tailored to the info they need on funding, ROI, overheads and budgetary performance.
Moving to a cloud system is the first step in getting back control of your charity finances. And we’ll be telling you how QuickBooks Online is the perfect cloud accounting system to do this in our next blog.