Tuesday, December 3, 2013
Time for a Financial Check Up
From Alerding CPA
Beyond the holiday festivities that will take place during the month of December, many of our clients view December as the time to gear up for the close of another fiscal year. Other nonprofit clients are hitting their fiscal year’s halfway mark and are now ready for a mid-year checkup.
Organizations may spend hours preparing budget reports and plans at the start of their fiscal year. They may not maintain the same level of effort in managing and evaluating that budget throughout the year. Various factors may have altered how they would prepare their budget today versus how they prepared it six-to-seven months ago. Budgets should be used as operating tools and updated as factors change.
Finance Committees should be evaluating cash flows and anticipated spending for the second half of the year to understand shortcomings and how to invest additional cash that may not have been in the original budget. (I know many of you are thinking, “that’s a problem I’d love to have.”) Are there any expenditures that have been incurred that weren’t expected? Many organizations that own a building or utilize equipment for day-to-day operations face this at least once a year.
How has accounting personnel changed this year and are controls still adequate to prevent and detect instances of fraud? Oftentimes a change has taken place and Management does not adjust vendor contacts or authorized signers in a timely manner. It’s prudent to evaluate any documented internal control procedures to ensure they are still accurate.
It’s always good to maintain open dialogue with the Organization’s bankers, accountants, investments advisors, and any significant vendors. Meeting annually with these providers helps ensure you are maximizing the benefit of the respective relationships. The ever-changing economy makes investment advisors very useful in ensuring that your organization is getting the best possible return.
Lastly, what goals did the Organization establish that may have fallen by the wayside? We all know the next six months will speed by in much the same way. Take a high level view of the Organization and ask the question “how is our year really going?” Utilizing committee meetings over the next couple months to answer this question will help the Organization zero-in on those important elements that will help make 2014 a great year.
For further assistance in evaluating the progress of your Organization and assessing Board Development needs, please contact Natalie Hopkins, Audit Manager for Alerding CPA Group, at 317-569-4181 ext. 244 or email@example.com. Check out our website to view our firm’s commitment to nonprofit organizations and our community.