An internal finance department is a necessary cost centre for most organisations. It is equally the same for the Not-For-Profit sector. Not For Profit providers are focused on delivering their mission and making a significant contribution to the sector they serve; however quality requires a high level of fiscal managemen, ensuring programs can be delivered, expenses covered, and the organisation can maintain a sustainable future with measurable growth projections. It is a complex balance of money in and money out. Many NFPs grapple with needing a dedicated internal financial division or outsourcing this function to a professional team. In this article, we look at the benefits of outsourcing and how our team can assist you.
The benefits of outsourcing
Outsourcing has become a popular strategy for many commerical and NFP organsiations seeking to optimise their operations and focus on core competencies and missions. While traditionally associated with areas like marketing, logistics, human resources (HR), and information technology (IT), outsourcing financial divisions has become mainstream. The value of outsourcing a financial department can be substantial, offering a range of benefits beyond cost savings to include access to expertise, enhanced efficiency, and the ability to scale operations effectively.
Financial department outsourcing is a growing trend
The principles driving outsourcing of areas such as marketing and HR apply to the financial department, and the rationale is simple. It saves the organisation considerable costs while enabling access to specialised expertise.
One of the more challenging elements of financial management for NFPs is reporting. Financial reporting requirements to the ACNC and stakeholders can be complex and fluid. For many of our clients, this element of financial management is resource-draining for their in-house teams. By outsourcing to a firm specialising in financial services, NFP organisations gain access to professionals with deep knowledge of NFP accounting standards and regulatory compliance. At Acccounting For Good, we implement robust financial recording systems that feed the necessary reporting requirements enabling NFPs to be audit-ready without the unnecessary burden of allocating resources when an audit or financial report is pending.
Outsourcing also offers scalability. As an NFP grows, its financial needs become more involved. At Accounting For Good, we scale our services to match NFP growth, adding or reducing services as needed. This flexibility is critical for NFPs who don’t have the resources to hire a full-fledged financial team.
Cost savings are a significant advantage. Maintaining an in-house financial department can be expensive, with costs including salaries, benefits, training, and software. Accounting For Good can reduce these costs, allowing the organisation to pay for only the services it needs when it needs them. Additionally, outsourcing frees up internal resources, allowing the NFP to allocate more budget and attention to mission activities.
Collaborating with sector specialists
While outsourcing the financial management of the NFP benefits cost savings and scalability it also offers collaboration with sector specialists who possess a deep understanding of the sector’s specific challenges. When NFPs partner with an external financial service provider, such as Accounting For Good, they are not just outsourcing routine tasks but gaining access to a team of professionals who live and breathe the sector. Our specialists are well-versed in the latest trends, regulations, and economic factors impacting the sector, enabling us to provide strategic insights beyond standard financial management.
Our team can identify potential risks and opportunities that might take time to be apparent to an in-house team. We can offer tailored advice on everything from cash flow management to revenue strategies. Our network has the potential to provide valuable resources that can further support the NFPs mission and financial objectives.
As discussed in this article, outsourcing various functions within an NFP is not a new initiative, and for most organisations, the process makes a significant contribution. Outsourcing key financial functions, including accounting, budgeting, reporting, compliance and risk management, and bookkeeping, is of strategic benefit to NFPs. Outsourcing saves money and resources and helps ensure an NFP is allocating its resources where it can do the most good.
Accounting For Good is a professional accounting and financial services firm that specialises in the not-for-profilt sector.
We offer a comprehensive range of accounting skills and substantial management expertise tailored to NFPs. We are equipped to deliver high-level CFO services to financial consultancy services including financial systems assessment, reporting and Xero implementation.
We collaborate with you to address intricate financial management challenges and can offer expert advice to help navigate and maximise the second half of 2024.
We work with NFP’s with a turnover of $1M or more. If you NFP is in this category and is seeking professional and experienced financial management and accounting services don’t hesitate to speak with one of our team members today.
