Accounting software and financial processes review
We emphasised the importance of the finance function in not for profit organisations in Article 2 of this series, which is why it is also critical to have the right accounting software and financial processes. These underpin the finance function and allow for meaningful data to be extracted for inclusion in reports for all stakeholders.
A review of both should be done at least every 3 years to ensure the finance function is being as effective and efficient as possible.
At the very least you should be asking these questions of your accounting software:
- Does it do what we need it to do? If not, is it a deficiency in the software or is a training issue?
- Are we using it as effectively as we can? So, are bank feeds turned on, are we using bank rules, are we using Auto Super functions, does it have document reading capabilities etc?
- Is there significant manual intervention required to get the reports that we need?
- What apps are we currently using? If none, are there some that would improve our work practices?
- Do we have a difficult audit every year?
It is important to note that most accounting software products on the market are cloud based. They do your very basic accounting functions and payroll with most of the functionality being outsourced to other app providers. Therefore, it is important to consider your “App Stack” – that is, what apps you use together with your accounting software to effectively run your organisation. It is also crucial to use apps that integrate with your software to save time in double handling of data.
Your accounting software by itself may be appropriate but apps can improve efficiencies even more. Some useful app functions include:
- Rostering and timesheets
- Point of sale
- Subscription management
- Direct debit management
- Detailed financial reporting
- HR assistance
- Staff credit card management
- Document reading and electronic data entry
- Authorisation management
- Asset management
- Inventory management
- and much, much more
You may have a great “App Stack” but if the processes around your software are deficient, it reduces the effectiveness, timeliness and accuracy of the data output. Robust financial processes also help reduce the chances of fraud and make your auditors happy.
You should have written financial processes covering all aspects of the finance function, from cash handling to authorisations to board reporting. This not only helps you stay on track, meet deadlines and be consistent, but also assists with training, staff leave management and ensuring appropriate use of funding.
The financial process handbook should be updated on an ongoing basis where process improvements are made and after a review.
The above recommendations aren’t just for larger not for profits, they apply to all organisations, even the small volunteer only ones.
The staff at WLF have assisted many clients to review their accounting software and financial processes. If you think your organisation could benefit from a review, contact us today for an obligation free chat.
Next up in our NFP series:
FBT, GST health check including employee onboarding, director obligations and insurances