Although non-profit organizations tend to focus on their cause rather than profit margins, it doesn’t mean they should focus less on their financial situations. It’s important for non-profits to focus on their financial situation so they can improve program efficiencies and meet various funding requirements.
Obtaining and implementing these financial insights can feel overwhelming, but it doesn’t have to be. Here are a few reasons why non-profits outsource their accounting services.
In-House Staff Can Focus on Mission-Driven Activities
Many non-profits operate under tight budgets. This often means they employ fewer staff members than for-profit organizations; however, bookkeeping, payroll and other financial responsibilities are still time-consuming processes that need to be updated regularly.
When non-profit organizations shift their financial responsibilities to outsourced accounting firms, the organization’s employees can devote their time to mission-focused tasks.
KRD works with various organization types, including:
- Medical and Trade Associations
- Social Service Organizations
- Medical Associations
- Private Foundations
Outsourced Accounting Services Can Assist with Tax Returns
Non-profits still need to file tax returns each year, even though they are tax-exempt. The tax return for non-profits is one of the most complicated returns to file. There are many rules and regulations around reporting revenue and expenses for 501(c)(3) organizations. Outsourced accounting services, like KRD’s, can provide CPA expertise and guidance which will ensure your compliance and tax readiness.
Outsourced Accounting Services Help Reduce Labor Costs
Hiring new staff is expensive. Some costs to consider when hiring a part or full time bookkeeper include, payroll increase, training, new technology, computers, office space, unemployment taxes, Social Security, Medicare, health insurance, vacation time and sick leave and the list goes on.
Non-profit organizations that hire outsourced accounting staff typically see an overall reduction in cost. Outsourced accounting staff can also build a schedule and determine monthly reoccurring payments, which can help plan your budget for the year.