Nonprofits, take note. This is important!
T-Accounts are a visual representation of the fundamental concepts of double-entry accounting. If you're a bookkeeper or controller, you're no stranger to the double-entry system. But if you don't have formal accounting training, it can be tough to remember what goes where when you're making a journal entry adjustment to the books.
Grab this quick cheat sheet for an easy 1-page guide to T-Accounts. Complete with a pneumonic helper, the more you refer to this in the short term, the more it will get locked into your brain! You won't be that bookkeeper referring to a cheat sheet multiple times a day after a few weeks of using this handy guide.
There's an old accounting story that professors still tell to this day:
She locks the drawer every night before she leaves, and the other office staff gossip quietly every day about what's in the drawer. Chocolate? Can't be. It's not edible. A pet rock? Possibly. She's a little quirky. They speculate endlessly.
One day, the bookkeeper dies suddenly. The business owner gets her desk drawer keys from her family a few days later. The office gathers around as the big secret of the drawer is revealed. What's in it?
A simple piece of paper with the words "Accounting Bible" at the top. On the sheet is a strange coded set of words and symbols labeled "T-Accounts." The office staff stares in wonder, unable to make anything out of it. Then someone puts it back in the drawer and they walk away... Guess she really was an odd duck.
Get your very own Accounting Bible here ;)
"Sheehan will speak on how to drive organizational sustainability though financial stewardship."
Dubbed by her clients as a nonprofit numbers guru, Sheehan will speak on how to drive organizational sustainability though financial stewardship. Her presentation, Count Less - Measure More, focuses on how nonprofits can best leverage their hard-earned funds.
She explains, “Nonprofit leaders spend 90% of their time chasing funding, and 10% of their time analyzing how they leverage those hard-fought dollars - if that! Financial stability and sustainability depend on your ability to disrupt that dynamic. What you do after the money comes in is the true secret sauce in sustainability.”
Conference organizer Jordan Geisert commented on Sheehan’s participation, ““We chose Chantal to speak at Cause Camp 2020 because we are striving for next-level content and we know she can deliver on that. Her presentation on stewardship within nonprofits will include tangible steps that our attendees can take right back to their organizations, which is what our conference is all about.”
Sheehan is a nonprofit organizational leadership expert and financial management coach with over 15 years executive-level experience across the private and public sectors. She guarantees Cause Camp attendees a fast-paced session loaded with takeaways and she promises, “We will make finance fun!”
As an avid blogger she spices up the topic of financial management in publications for Bill.com, Bloomerang, and Hive. Her company blog at www.yourbluefox.com features content aimed to educate and empower nonprofit and social enterprise professionals. From QuickBooks hacks to advice on how to talk finance with a board of directors, the Blue Fox blog has it all.
A recovering nonprofit executive director herself, Sheehan started Blue Fox in 2015, and the company has doubled or tripled in size each year in response to high demand. For more information about Blue Fox call (321) 233-3311, email firstname.lastname@example.org, and visit www.yourbluefox.com.
ABOUT BLUE FOX: Blue Fox provides customized financial and back office services for social impact organizations (nonprofits and social enterprises). Services range from standard bookkeeping and payroll services, to coaching and consulting, to full-blown virtual CFO services. The Blue Fox mission is to disrupt the traditional accounting model through technology, innovation, and a radically client-focused approach that truly empowers nonprofits and social enterprises. For more information call (321) 233-3311, email email@example.com, and visit www.yourbluefox.com.
ABOUT CAUSE CAMP: Cause Camp is an immersive boutique conference in Lincoln, Nebraska presented by Nonprofit Hub, dedicated to teaching nonprofits to hone their skills and welcom change. For more information visit www.cause.camp/home.
Our Top Picks - Social Enterprise News
- Social Entrepreneurs, Create A Startup Then Do Good Like These Companies
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- Moving Toward an Inclusive and Regenerative Economy
- 5 Ted Talks for Social Enterprise Leaders
- More Investors Exploring Nature-based Growth Opportunities
Thanks for stopping by to explore our picks for social enterprise news this month! If you’re interested in hearing more from us, subscribe to our newsletter today!
About Blue Fox: Our team provides customized, boutique financial and back office services for social impact organizations. Services range from standard bookkeeping and payroll services, to coaching and consulting, to comprehensive virtual CFO services. Our mission is to disrupt the traditional accounting model through technology, innovation, and a radically client-focused approach that truly empowers nonprofits and social enterprises. For more information call (321) 233-3311, email firstname.lastname@example.org, and visit www.yourbluefox.com.
So, we put together this handy checklist to help you get your financial house in order as we head into giving season. We’re pretty sure this is the first list of its kind – so enjoy and let us know how we can help!
5 Steps to Solving Complex Workflow Problems: How We Designed and Built a Smart Workflow for a Tuition-Based Client
[A Must Read for Nonprofits with Tuition Revenues]
If you’ve ever worked at a school (or been a parent who’s paid school fees) you understand that capturing the ins and outs of daily, weekly, monthly, or annual tuition can be confusing. Throw in scholarships, holidays, and seasonal breaks and you get accounting mayhem.
Last year, one of our clients with an adult day program rolled out a redesign of their tuition and fee structure. They moved from a pay-as-you go model to standardized fee rates, regular invoicing for families, and they also added a subsidy (i.e. scholarship) program to assist families who could not afford the full fare of the program.
Unfortunately, we were brought into the loop a little too late – and after the new process and payment structure was rolled out to the community. The result was one huge, hot mess for everyone involved – the staff, the Blue Fox team, and the participant families as well.
We’ll spare you the details, but as this past academic year wrapped up, the staff and Blue Fox were determined to work together to unpack the issues with the inaugural process and streamline the workflow. In the words of ME Parker, the Keeper of Books from the Blue Fox team assigned to this client, “The overall goal was to make this process not only much more simplified, but to make it a shared process… so everyone is working on the same page.”
It was paramount to Blue Fox that we have a collaborative and inclusive redesign of the workflow. Here’s how the process unfolded… it’s a roadmap anyone can use to work through a challenging workflow scenario.
Step 1. Gather data and analyze the challenges with the current process.
As soon as we realized that year 1 was a giant beast of a learning curve, we began to gather data on what was working and not working (for everyone involved). We made notes throughout the year on the issues we were having on the accounting side, and issues the staff were dealing with as they communicated with parents and managed their own recordkeeping related to the program.
Every time there was “an exception” made on the billing side, we kept a record of that in particular. Participants of the program have a level of intimacy with staff that, while a wonderful endorsement of the organization, created its own set of challenges as the staff tried to (understandably) bend to accommodate different needs and requests throughout the year. A beautiful intention that was followed by a brutal accounting process.
We also developed a spreadsheet to track gross fees and true subsidy amounts per participant, since this information was often incorrectly computed on site and incorrectly accounted for in the accounting software. At year end, we analyzed this information to ascertain the root causes of miscalculations and headaches, and we identified accounting and program policies and procedures that could be implemented to eliminate or avoid those accounting land mines.
Step 2. Determine recommendations and sketch out revamped process.
As this client’s virtual CFO, we were asked to take the lead and design the new workflow and identify the best technology to use in that workflow. We identified the core issues in play and made suggestions on how to prevent those issues going forward. We suggested things like:
- Standardize pay rates AND subsidy levels – a set system of tiered fees
- A change in invoicing frequency to support regular, recurring transactions
- Additional policies and procedures regarding those “exceptions” that came into play – credits for absences, for example
- We actually drafted several of these policies since this was new territory for the client
- Use online forms to automate the workflow around participant interest and registration
- Make changes to the accounts in use in QuickBooks (more on that in Step 4 below)
Step 3. Collect feedback from staff and TEST the new process.
After we settled on our recommendations, we presented them to the staff and asked for feedback. We had some very deep, meaningful conversations with the client to ensure that our ideas were aligned with their needs. The critiques we received allowed us to further tweak and refine the workflow.
Once our framework was set and agreed upon by all parties, we ran some tests of the new process. These tests revealed a few shortcomings in the revamped approach and gave us time to adjust and adapt the process prior to rollout.
I *cannot* overstate how important the testing component was – the Blue Fox team ran tests on our proposed systems based on the most complicated variables and scenarios that we had encountered in year 1. When we stumbled, we analyzed and clarified why and then refined the workflow (and/or our tools in use) further.
This is the kind of behind-the-scenes value add that we live to provide, and that really makes a difference to our clients.
Step 4. Implement technology solutions to streamline the workflow.
Most of our process improvements revolved around technology that would:
- Take the guesswork out of the workflow for the staff
- Eliminate (or at least significantly limit) staff improvisation or deviation from the process
- Create a paperless, but seamless, record for all involved – the family, the staff, and us
- Automate the workflow as much as possible
This laser focus on really leveraging the technology at our disposal was key. We all have tech in use at work – but does it really WORK for us? We were determined that should be the case.
So, we did things like:
- Drafted two online forms for the client to use and distribute (on their own website) detailing the new payment structure, rates, etc. When this form is completed, we get copies of the form emailed to us automatically.
- Created a spreadsheet for our own Blue Fox use to track gross fees, subsidies, and yes, the few exceptions here and there.
- Created two online forms that integrate with our internal project management software (Hive). These forms are used by staff when registration is complete and the forms immediately trigger new tasks for us. This allows us to stay on top of new registrations, invoicing, and troubleshooting in real-time rather than scramble to catch up with staff ad hoc.
- Refined the Chart of Accounts in QuickBooks and restricted the staff use to certain income lines only so we could run quick reports and spot anomalies/errors efficiently.
- Set up recurring invoices, sales receipts, and journal entries in QuickBooks to ensure real-time, accurate reporting on tuition and subsidies – a huge help to the client for grant writing, too!
Step 5. Communicate the changes with staff and stakeholders to ensure unity in approach.
The final and, arguably, most important step was to communicate with and educate staff on the new workflow. The executive director took the lead here as you might expect, and we were on hand to answer questions after the staff had a chance to digest the new workflow.
Did a few additional changes/needs arise after those conversations? You betcha. Were they as onerous or numerous as the prior year? Not by a longshot – at most, we have 5-10% of the curve balls we had last year.
And while the staff was busy taking these changes to their participants and other stakeholders, we were busy developing staff training materials to ensure accounting data entry accuracy throughout the year. These how-to docs sit on staff desks and guide them through every step of the payment receipt process.
You can’t argue with the results.
This consultation was a huge investment of Blue Fox time – candidly, we billed less than half the time we spent on this project. But for us, it was 100% worth it – this was a short-term project with long-term impact across the organization. And critically, efficiency has soared. It’s hard to estimate the amount of time saved this year versus last year, but we think our processing time is down by half or more.
The staff is no longer using paper forms to collect registrations, nor are they using disparate spreadsheets to track data and payments. Winning!!
We spotted the challenges, used our 20/20 hindsight to analyze them in granular detail, and then applied our macro-view foresight to innovate our way to success. Through sheer willpower and a won’t-quit-until-it’s-right mentality, we have iterated our pants off until, as ME says, “we assured consistency across the organization in complex scenarios… we brought fusion to a very disjointed process.”
Does your accountant do that? If not – you might want to email or call us at (321) 233-3311 to find out how we can help solve your back-office workflow problems. Go ahead. We have lots of free time now. ;)
Hint: The High Price is No Growth and Lower Sustainability
Are your employees showing signs of burnout?
Have you and/or your organization hit a plateau?
Do you hold the same events, with the same sponsors, every year?
Have you lost sight of strategy?
Sometimes, it’s difficult to identify when your organization is stagnant. You still feel like you’re running a mile a minute. Your day could look like this: Coffee. Email. Staff meeting. Donor presentation. Lunch (hopefully). Blogging. Email. Networking. On and on and on.
When your organization gets stuck on a plateau, reactivity sets in. Innovation slows. You spin your wheels and go nowhere. It’s an endless loop that flings your ability to shore up a sustainable financial position right out the window.
What is the problem? How can you climb up and off the plateau?
THIS PART’S IMPORTANT
(1) Fast pace does not equal growth. When you move at light speed, it’s nearly impossible to focus on capacity building and economies of scale.
(2) Ridiculously low overhead is the opposite of growth. In this hilarious and on-point blog post, our friends over at Nonprofit AF explain why so many nonprofit leaders are “overheadholes.”
MULTITASKING IS NOT HELPING YOU
One of the inevitable effects of wearing too many hats in your organization is the dreaded multitasking syndrome. Remember that open door policy you boast? It may be getting you in trouble!
Check out these negative effects of multitasking:
- Shifting between tasks can cost as much as 40 percent of someone's productive time. (Source)
- Multitasking with electronic media can lower your IQ more than smoking pot (Source)
- After only 20 minutes of interrupted performance people reported significantly higher stress, frustration, workload, effort, and pressure. (Study)
- Heavy multitaskers cannot filter out irrelevant information (Source)
THE BIG PICTURE CHALLENGE
Truly sustainable nonprofit organizations look for ways to leverage their resources so leadership has time and capacity to be strategic and build long-term growth plans.
Here’s a great example: In one of my favorite case studies on the matter, CEO Zac Carmen explains what happened when he vowed to remove a few hats and start working on his business rather than in his business. The results are astonishing.
Likewise, our CEO at Blue Fox, Chantal Sheehan is a big proponent of the same notion. My first week at the company, I asked her how Blue Fox was different from other virtual accounting firms. She said, “When it comes to building sustainability at a nonprofit or social enterprise, it’s not about penny pinching. It’s about a full understanding of the leverage and power in every dollar.”
SO, STOP WEARING SO MANY HATS
They are simply weighing you down. Hire. Outsource. Delegate. Empower volunteers (here are some tips). Whatever it takes! Allow yourself to be proactive. Allow your team to take a breath and strategize. Spend time on the big picture.
Today’s cloud-based technology and virtual services providers (like us) offer cost-effective alternatives to outsource some of your hats. You don’t have to do EVERYTHING anymore!
Blue Fox can manage your back office in the most effective way possible. That’s all we do and our team is stacked with nonprofit gurus to get the job done. We also go the extra mile to provide your team with actionable insights from the work we do. This helps you make smart and data-driven decisions. What could be better?
Give us a call at (321) 233-3311 or email us when you’re ready to ditch the baseball cap (bookkeeping), sombrero (payroll), fedora (tax prep) and sun visor (financial consulting). We’ll wear those hats for you and look good doing it.
Author: Chelsea Clementi, MBA, Director of Marketing & Business Development, Blue Fox
- 4 Ways To Empower Volunteers To Be Champions For Your Cause
- Are you an overheadhole? Why we need to just stop talking about overhead
- Media multitaskers pay mental price, Stanford study shows
- Multitasking: Switching costs
- Stop Wearing So Many Hats and Watch Your Productivity Soar
- The Cost of Interrupted Work: More Speed and Stress
- Why Multi-tasking is Worse Than Marijuana for Your IQ
Welcome to the Blue Fox Blog! A fairly entertaining source of info and news related to our company, nonprofits, social sector trends, and, of course, accounting. Enjoy!
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