Tuesday, 22 Oct 2019
Accurate bookkeeping is a pre-requisite for running a successful non-profit. However, crunching numbers is not everyone’s cup of tea. You may be a brilliant social worker and philanthropist, but when it comes to managing the balance sheets, you may barely be able to understand the different columns.
Many not-for-profits in Melbourne try to save money by making an unqualified person do the job. However, it is better suited in the hands of a skilled professional. This is the reason why outsourcing of bookkeeping for non-profit organisations is highly recommended by all seasoned bookkeepers in Melbourne. It is an ongoing activity that needs an expert to be on top of things and record all transactions without making any errors.
Such professionalism can come from an experienced bookkeeping company dealing with several non-profit clients from diverse industries. Here are four reasons why you should outsource your non-profit bookkeeping.
When you are running a non-profit, you cannot afford to waste your valuable time and get your talented resources stuck in tiring jobs. Since bookkeeping is a continuous process, you need someone diligently working on coding the transactions accurately and in a timely fashion.
If you appoint one of your staff members in Melbourne to do the job, they won’t be able to focus their attention on other significant work. Also, as they would not be trained in such work, it will take them hours to complete what professionals can accomplish in minutes.
Besides recording all the incomings and outgoings, the bookkeeper is also responsible for processing all the invoices, following up with vendors for payment, managing the payroll, reconciling the bank accounts and creating all the financial reports.
So you can’t expect a novice to take up the challenge and come out with flying colours. Moreover, non-profits are different from for-profits as the incomings can come in varied forms, such as donations, funds, grants, sponsorships, etc.
Thus they need assistance from a professional company which is specialised in offering non-profit bookkeeping services. Since prevention is better than cure, you must not wait till the accounts get messed up. Outsource bookkeeping from the start to ensure the streamlining of your financial data and activities.
A non-profit organisation in Melbourne needs to acquire funds from donors and sponsors to maintain the cash-flow. However, the donors are not interested in any non-profit until they are satisfied with its financial health and bottom-line.
The most significant factor which persuades them to take the giant leap is a look at the financial reports and projections. If you have organised books, they can easily fetch you bank loans, grants and donations. As you are accountable to the donors, you need to provide them with timely and precise reports, which can be achieved with the help of a bookkeeper.
Additionally, grant tracking, securing funds and managing flow of capital are some of the biggest bookkeeping challenges faced by non-profits, which can be effectively tackled by a seasoned bookkeeper. They ensure that the donor’s funds are being utilised in the desired manner and no fraudulent transactions are taking place in the organisation by keeping a check internally on all incomings and outgoings.
Also, the bookkeeper ensures that the non-profit is working towards achieving its social goals and provides all the information to the Board Members. Equipped with all the facts, they can make informed decisions about fundraising in Melbourne and acquire more grants with up-to-date records.
While some non-profit organisations are exempted from filing income tax in Melbourne, others need to submit it on time with the help of the company tax return. For filing the tax returns, you need to have a correct compilation of all the expenses and revenue of the non-profit.
The taxable income of an organisation can be calculated with the help of this formula: Taxable income = Assessable income – Allowable income. You also need to take care of the mutuality principle, which states that receipts obtained from mutual dealings with members do not fall under assessable income and the money spent on getting the mutual receipts is not deductible.
Many non-profits in Melbourne make errors in mentioning the relevant period, and as a result, the tax return is returned by the ATO for being incomplete. Sometimes wrong industry codes are mentioned in the description of the entity, or the total profit and loss are miscalculated in the reports. To avoid such common mistakes, you need to outsource bookkeeping to a qualified and experienced professional in Melbourne.
With an in-house member doing bookkeeping, you are dependent on an employee who can decide to leave the non-profit at any moment. However, with a bookkeeping company for non-profits in Melbourne, you won’t have to think about maintaining consistency or arranging back-up, or attrition.
The outsourced professionals are well-versed in their profile and have the technical know-how to use the best tools in the market, such as cloud-based accounting software customised for non-profits. With such tools, the chances of errors are minimised, and the team can have real-time access to the financial data.
The bookkeeper also aids in creating a budget for the organisation and provides insights about the most profitable activities and recommends eliminating projects that are wasting money. They can suggest new ways of generating more funds and finding potential donors and maintaining the highest accounting standards.
Outsourcing also helps you to leverage the best digital applications that support automation and thereby reduce human errors and provide higher security for your financial data. All the complexities associated with the job are efficiently managed by a skilled bookkeeper who ensures the fulfilment of your Melbourne-based non-profit’s goals and objectives.
So whether you have just launched your non-profit or have been looking for accounting software to manage your books, you must consider outsourcing the job. An expert bookkeeping company will help you in maintaining accountability, bringing the best stakeholders onboard and utilising your resources in the best way possible.
