We have all heard of healthy habits for successful people, but what are some of the most important habits for nonprofit accountants, advisors, staff, or volunteers supporting a nonprofit organization’s financial infrastructure? We’ve mapped out our favorites below:
1. Timely Communication
Prompt follow-up is crucial in accounting. It’s more than just a courtesy; it’s a demonstration of your commitment and respect for your team and constituents. Following up within a reasonable time frame, especially after a call or meeting, ensures that all parties are aligned with the discussed outcomes. It could be as simple as an email reiterating the key points of the conversation. This habit also includes reminding clients of ongoing tasks or deadlines, which helps in keeping projects on track and avoiding last-minute rushes. In general, timely and complete communication furthers the model of transparency at the root of nonprofit accounting.
2. Self-Review
Before you pass any work to a supervisor, donor, auditor, or anyone looking over your financials, take the time to first thoroughly review it yourself. This practice of self-review is instrumental in maintaining high standards of accuracy and professionalism. By reviewing your own work, you can catch and rectify errors or inconsistencies. It’s also beneficial to understand who your reviewer is. Is it a donor? An auditor? A supervisor in your infrastructure? Understanding their vantage point and what they are looking for will ensure you are reviewing your own work through that same lens.
3. Written and Consistent Processes
Documenting processes is vital in accounting. Having written and consistent procedures ensures that tasks are performed uniformly, reducing the likelihood of errors. Additionally, this becomes a critical component of an organization’s internal control framework. This habit involves saving all relevant documentation, both external and internal, and clearly outlining all procedures. Moreover, having someone else replicate the process based on your documentation can be a great way to test its clarity and effectiveness. This approach is not only beneficial for training new team members but also creates a model of succession.
4. Understanding the Connection to the Mission
While the fundamentals of accounting, like debits and credits, remain constant, every nonprofit organization is unique. Understanding an organization’s specific financial reporting needs and the connection to the mission is crucial. It’s about seeing beyond the numbers and appreciating the context in which they exist. This understanding can lead to more customized and effective accounting solutions that align closely with reporting needs for donors, constituents, government entities, management, and any other user of the organization’s financial statements.
5. Attention to Details
In accounting, the devil is ALWAYS in the details. Ensuring that each transaction is accurately described and recorded is paramount. Avoid generic, one-word descriptions; instead, provide detailed, clear, and context-specific information. Break down transactions to reflect their complexity. And most importantly, be consistent in the model used to define transactions. This detailed approach not only aids in maintaining precise records but also becomes invaluable when you need to recall or explain a specific transaction in the future.
For more information about the creation or maintenance of a healthy nonprofit accounting infrastructure, or if you need any additional information regarding the nonprofit accounting consulting services that Evergreen Alliance provides, contact us.