Quickooks

Article Dean Dorton

Say Goodbye to Quickbooks: Tips for Upgrading Your Nonprofit Accounting Solution

Accounting has never been more important for today’s nonprofits. Donors and funders expect complete financial transparency, and they hold nonprofit accountants to high standards for consistency and quality. At the same time, the Covid-19 pandemic has disrupted the financial situation at many nonprofits, creating new costs while putting funding forecasts in jeopardy. All this makes effective money management a huge priority for nonprofits. Their future depends on it.

So their future also depends on the accounting software in place. If that solution is QuickBooks, it’s worth taking a hard look at whether this tool – which is popular and accessible but also basic and limiting – can handle accounting on the level nonprofits need. Here are some common signs it’s time to switch to something better:

Spreadsheet Fatigue
If people are spending endless hours inside spreadsheets, it’s a clear indicator the accounting system isn’t meeting their needs. Spreadsheets may be an effective workaround, but they are not a sustainable solution.

Endless Errors
QuickBooks requires extensive manual entries. Not only are these a boring distraction for accountants, they cause keystroke errors to compromise the accounting data and throw the accuracy of anything into question.

Slow Results
Having to workaround the limitations of the accounting system makes it hard to meet deadlines. Decision makers either have to wait for updated financial insights or move ahead without enough information.

Poor Visibility
The accounting team struggles to get a comprehensive view of the financial situation and spends significant time trying to piece that perspective together. Like the previous point, poor financial visibility can only compromise decision making.

Absent Integration
When QuickBooks does not integrate with other software at the nonprofit, it forces people to move data between systems manually. Dual entries waste time and lead to incomplete, inconsistent data inside important systems – not to mention the errors.

Audit Uncertainty
An under-powered accounting system makes it hard to feel confident headed into the audit process. The software will either take extra work to extract and organize the data. Or it will supply incomplete or unreliable data that calls the entire audit into question.

Performance Blindness
While QuickBooks may be able to handle basic accounting tasks, it’s very restricted in terms of analyzing data and reporting on performance. This can result in an incomplete – or wildly inaccurate – understanding of nonprofit performance.

Future Fit
The right time to switch software is before it’s absolutely necessary. Based on the future forecast for the nonprofit, can QuickBooks handle the scale, speed, and complexity of the accounting requirements? If not, it’s a disaster waiting to happen.

The hardest part about upgrading a nonprofit accounting solution is recognizing the need for change. After that, the upgrade happens quite easily with the help of a partner like Dean Dorton. Let our team help you select, implement, and optimize a system that takes nonprofit accounting to new heights. Contact us before you outgrow QuickBooks any further.

Article Dean Dorton

The Cost of Your Family Office Team

How do wealthy families make the best use of their money? With help.

Many rely on family offices to manage and grow their wealth, among other financial services. Family office teams consist of various financial professionals who understand how to avoid risk, evaluate investments, minimize taxes, and manage assets for multiple parties with a collective interest. Family offices have become far more common in the last 20 years, owing largely to the immense wealth created by the emergence of the internet. Newly-minted millionaires with more money than time need to entrust someone with their funds, and family offices are an appealing alternative to institutional money managers.

Given the nature of their work, one might expect a family office team to have no trouble managing their own accounting obligations. One might also expect wealthy individuals to disregard the cost of their family office. But neither assumption holds up. Accounting, finance, and cost controls can all be challenges for a family office, and that should concern the family itself.

How Costs Get Out of Control

Prevailing wisdom says that family office costs should equal around 1% of the family’s active assets. Those costs typically fall into four categories:

  • Internal Costs – Salaries, benefits, overhead, technology
  • Family Expenses – Property, art/collectibles, taxes, consumption
  • Professional Services – Insurance, lawyers, consultants, security
  • Advisor Fees – Management, research, reporting, custody

As this table makes clear, family office costs can be complicated and considerable. They could easily exceed 1%, making a family office an essential but expensive resource. Alternately, costs could fall below the 1% threshold, suggesting the family office may be sacrificing effectiveness for efficiency. In either case, family offices costs can become difficult to track and manage for small teams with big responsibilities. A family office needs a big enough budget to cover their costs. But just as importantly, they need a way to manage that budget without it becoming a distraction or a disruption.

Fine-Tuning the Family Office

Adding an accountant to the family office team doesn’t make sense in most cases. What does make sense is utilizing accounting and finance outsourcing (AFO) to supplement the expertise already on the team. With an outsourcing partner in the mix, family office teams can focus on managing wealth while offsite accountants handle routine obligations like bill payment, general ledger management, and financial reporting. Teams can also rely on AFO to handle specialized finance if and when necessary.

If family offices need to keep costs in check without constraining their capabilities, AFO is the logical solution. It costs a fraction of hiring in-house accountants while delivering vastly more than one (or several) professionals could offer on their own. Arguably most importantly, the oversight and input of an outsourced team can prevent costs from compromising the family fortunes. With AFO, the family office becomes the asset it was intended to be.

How does outsourcing fit into your own family office operations? Explore the answer with the team at Dean Dorton.

Justin Hubbard, CPA, CGMA | Accounting and Financial Outsourcing Director
jhubbard@deandorton.com
859.425.7604