Ten reasons why nonprofits should consider outsourcing their bookkeeping
This blog was contributed by Enkel Back Office Systems as part of an ongoing partnership with ONN.
In today’s sea of uncertainty around staffing shortages, economic conditions, and declining donations there is an increasingly relevant question percolating amongst nonprofits: “Should I consider outsourcing bookkeeping and other back-office functions”? In the dynamic landscape of the nonprofit sector, where every dollar and every minute counts, organizations are constantly seeking ways to optimize their operations and maximize their impact.
Outsourcing, a strategy once reserved for the corporate world, is now emerging as a game-changer for nonprofits in Canada. It offers not just a pathway to streamline operations and reduce costs, but also a means to leverage specialized expertise and enhance overall efficiency.
Benefits of outsourcing your bookkeeping services
In this post, we will explore the myriad of benefits that outsourcing can bring to Canadian nonprofits, from financial savings to improved focus on their core missions, and why it might just be the strategic move your organization needs to thrive in today’s challenging environment.
- Cost Efficiency: One of the most compelling reasons for nonprofits to outsource their bookkeeping and other back-office tasks is cost efficiency. By outsourcing, nonprofits can reduce the costs associated with hiring full-time staff, such as salaries, benefits, and training expenses. This is especially beneficial for smaller nonprofits that may not have the budget to hire specialized staff. Outsourcing allows them to access professional services at a fraction of the cost of employing someone full-time.
- Expertise and Quality of Service: Outsourcing firms specialize in their field and have a team of experts with deep knowledge and experience in managing financial and administrative tasks. This expertise ensures that the work is of high quality and compliant with the latest regulations and standards. Nonprofits can benefit from this high level of expertise without having to invest in extensive training for their staff. When outsourcing, make sure you partner with a provider who has a deep understanding of the nonprofit sector.
- Focus on Core Mission: By outsourcing back-office functions like Bookkeeping, Payroll, Accounts Payable and Accounts Receivable, nonprofit leaders and staff can focus more on their core mission and strategic objectives. This focus is crucial for nonprofits, as it allows them to dedicate more time and resources to the programs and services that align with their mission, rather than getting bogged down in administrative tasks.
- Scalability and Flexibility: Outsourcing offers nonprofits scalability and flexibility. As the organization grows or goes through seasonal fluctuations, the level of service can be adjusted accordingly. This flexibility ensures that the nonprofit only pays for what it needs, when it needs it, which is often not possible with in-house staff.
- Risk Reduction: Handling finances and sensitive data comes with risks, including fraud and errors. Outsourcing firms are equipped with systems and processes to mitigate these risks. They often have robust internal controls, audit support, and compliance mechanisms that a nonprofit might struggle to implement on its own.
- Improved Efficiency and Innovation: Outsourcing firms often use the latest technology and practices in their field. This access to advanced tools and processes can significantly improve the efficiency of back-office functions. Moreover, these firms continually innovate and update their practices, which means nonprofits benefit from these advancements without having to invest in, learn, and maintain new technologies themselves.
- Enhanced Reporting and Analytics: Quality outsourced service providers offer advanced reporting and analytics, which can be invaluable for decision-making. Nonprofits gain valuable insights into their financial health, budget management, and other key metrics, which can be used to make informed strategic decisions.
- Staffing Flexibility and Continuity: Nonprofits often face challenges with staffing continuity, especially in specialized roles like bookkeeping. Outsourcing provides a consistent level of service, regardless of changes in staff or management within the nonprofit. This continuity is essential for maintaining the quality and consistency of financial records and reporting.
- Access to a Wider Range of Skills: Outsourcing firms typically have a diverse team with a wide range of skills. Nonprofits can benefit from this diversity, gaining access to skills and knowledge that might not be available in-house. This can be particularly valuable for complex or specialized tasks.
- Enhanced Compliance and Regulation Adherence: Keeping up with the ever-changing landscape of financial regulations can be daunting for nonprofits. Outsourced providers stay current with these changes and ensure that the nonprofit’s practices are compliant, reducing the risk of legal or financial issues.
Outsourcing your bookkeeping is a strategic move
The decision for Canadian nonprofits to outsource their bookkeeping and other back-office functions is more than just a financial consideration; it’s a strategic move towards greater operational efficiency and mission effectiveness. Outsourcing offers access to specialized expertise, cost savings, and the ability to focus more intently on the core objectives that drive the nonprofit’s mission. It enhances organizational agility, ensures compliance with financial regulations, and instills confidence in donors and stakeholders.
As nonprofits in Canada continue to navigate a complex and ever-changing landscape, embracing the advantages of outsourcing can be a key factor in not only sustaining their operations but also in amplifying their impact in the communities they serve. This strategic approach could be the catalyst that propels your organization towards achieving its goals with greater effectiveness and efficiency.
Enkel Back Office Systems provides bookkeeping, payroll, accounts payable, accounts receivable and controllership services to over 300 businesses and not-for-profit organizations Canada-wide.