How outsourced bookkeeping services can help not-for-profits

Australia has a large and diverse not-for-profit (NFP) landscape, from small community groups to large registered charities. NFP groups need to maintain accurate financial records just like for-profit companies, and they often have unique complications. Not-for-profits, for instance, may need their financial reports reviewed or audited, and can report to more than one regulator and funder.

Having a bookkeeper on your side who is well-versed in NFP finances can be a real lifesaver. For an organisation that may not have a lot of money to spend, outsourcing your bookkeeping can be a cost-efficient option. Outsourced bookkeeping for not-for-profits allows you to tap into expertise without hiring a full-time finance employee.

Here is how outsourced bookkeeping for not-for-profits can keep your organisation’s reports on track.

Save time to focus on your not-for-profit’s mission

Registered charities must meet the reporting rules of the Australian Charities and Not-for-profits Commission (ACNC). That’s on top of the standard accounting needed to keep any organisation solvent. Between daily bookkeeping, payroll and annual reports, you could spend hours each month on your books.

Outsourcing your bookkeeping means your staff have more time for what matters: your organisation’s mission. If your executives are getting stressed out about preparing their own reports, it’s time to call in some assistance. You can still receive and review your necessary reports without being responsible for creating them. Staff stay informed about your financial position; they just don’t have to labour over the number crunching.

Minimise your not-for-profit’s financial risk

Even a well-intentioned staff member can mismanage your money. And some not-for-profits rely heavily on volunteers and temporary workers, which can make trusting people with your books more complicated. You may have a rotating carousel of workers at your NFP who are responsible for your reporting. What happens when they leave their role and the next person doesn’t know where to pick things up?

Outsourcing your bookkeeping gives you continuity: a team that keeps your books going when people change. Experienced professionals are also less likely to make a mistake than a part-time staff member who is already overwhelmed.

Risks with mismanaged funds are significant for not-for-profits. A late annual report or an incorrect BAS can lead to penalties, problems with funders and, for charities, action by the ACNC. Outsourced bookkeepers are also impartial. They can tell you honestly where you need better financial safeguards or reporting in place.

It’s important to keep in mind that financial errors snowball. If one year’s figures are wrong, the opening balances for the next year will be wrong too. A bookkeeper can look over historical records to make sure you’re not working with erroneous reports. This reduces your long-term risks as well as correcting your current reports.

Stay compliant with all relevant filings

Your not-for-profit may be responsible for a variety of reporting. An outsourced bookkeeper can help you stay up to date and prepare the records each report needs. Reports you may be responsible for include:

• ACNC reporting. Every charity registered with the ACNC must lodge an Annual Information Statement. What else is required depends on charity size, which has been set by annual revenue since the 2022 reporting period: small charities (under $500,000) don’t have to submit a financial report; medium charities ($500,000 to under $3 million) generally submit a financial report that is reviewed or audited; and large charities ($3 million or more) generally submit an audited financial report. Check exemptions, including eligible basic religious charities and transitional reporting arrangements, as well as separate requirements in governing documents and funding agreements. The statement and any financial report are generally due within six months of the end of your reporting period. Check the ACNC’s due dates page for your year, as the ACNC sometimes extends them.
• Constitutional requirements. Most not-for-profits have a constitution or rules that guide the organisation. These often set how often you need to prepare financial reports and to whom they must be supplied.
• State and territory regulator reports. Incorporated associations also have obligations under their state or territory’s associations law. In New South Wales, for instance, an association must lodge an annual summary of financial affairs within one month after its annual general meeting, and no later than 7 months after its financial year ends. Associations registered with the ACNC are generally exempt from the NSW financial reporting requirements if they lodge their Annual Information Statement and meet the other conditions.
• Audits. Larger organisations may need a full audit, whether under ACNC rules, state associations law, their constitution or a grant agreement. Each sets its own thresholds, so check all that apply to you.
• Reviews. Some not-for-profits need a review rather than a full audit. A review is less extensive than an audit and is carried out by a qualified reviewer, such as an appropriately qualified member of Chartered Accountants Australia and New Zealand, CPA Australia or the Institute of Public Accountants, or a registered company auditor.

The intricacies of a not-for-profit’s financial reporting are evolving and complicated. It’s a lot for your staff to handle when they are also tackling other responsibilities. An outsourced bookkeeper who knows the not-for-profit sector will help you keep up with your organisation’s reporting requirements.

Take advantage of experience and top accounting software

A not-for-profit organisation may not have access to the latest accounting software. It’s understandable for you to spend your precious resources elsewhere. But what happens when the rules change or your state alters the required reporting? You may be lost.

A dedicated, outsourced bookkeeper has not only the expertise to understand the needs of a not-for-profit, but also knows how to get the most out of current accounting software. Good accounting tools make it easier to produce everything from a balance sheet to accounts payable reports, and to track grant funds separately. With an outsourced professional at the helm, your NFP can produce financial reports faster and catch mistakes.

Is outsourced bookkeeping right for your organisation?

Is your not-for-profit growing? It may be time to hand over your books to a professional. An outsourced bookkeeper can do everything from recording your donations to preparing the records your reviewer or auditor needs. You will be kept informed every step of the way without having to put in your own elbow grease.

To find out how bookkeeping professionals can make your organisation run more smoothly, learn about how Visory’s bookkeeping service can help your not-for-profit, or book a discovery call. Queensland not-for-profits can also see Visory’s bookkeepers in Brisbane and the Queensland rules they work to.