Introduction: Embracing the Compliance Journey

Ahoy, fellow navigators of the non-profit seas! Jen Pollinger here, your trusted companion compliance in the quest for financial stability and adherence to regulations. Today, we embark on a thrilling voyage through the choppy waters of compliance. Buckle up, grab your compass of industry-specific knowledge, and let’s explore how we can navigate the compliance journey with resilience, introspection, and a dash of humor. Are you ready to conquer the waves? Let’s set sail!

 

Unveiling the Compliance Maze:

Imagine this: You’re sailing your non-profit ship through uncharted waters, surrounded by a vast ocean of financial regulations and reporting requirements. It can feel overwhelming, like staring at a bewildering maze without a map. But fear not, my friends, for within this labyrinth lies the key to your organization’s success.

Compliance is not just a bureaucratic burden; it’s a vital anchor that keeps us grounded and ensures transparency, accountability, and trust. It’s about safeguarding the integrity of our operations and demonstrating our commitment to ethical practices. So, let’s unfurl our sails, hoist our compliance flag high, and embark on a journey that will empower us to navigate these treacherous waters with finesse.Charting Your Compliance Course: Unleashing the Power of Industry-specific Knowledge.

Now, you might be wondering, “Jen, how do I become the captain of compliance in my industry?” Well, dear reader, fear not! Grab your spyglass and let’s delve into the essence of industry-specific compliance.
Every sector has its unique set of regulations and reporting requirements, much like the varied currents and tides that shape the seas, we sail. It’s time to unleash the power of knowledge, dons your captain’s hat, and become intimately familiar with the specific financial regulations that govern your industry.
Dive into the depths of compliance literature, consult industry experts, and seek guidance from organizations that specialize in compliance support for non-profits. Armed with this knowledge, you’ll be equipped to navigate the ever-changing currents of regulatory requirements, ensuring your organization stays afloat in a sea of compliance.

 

Embracing Compliance with Resilience:

As I reflect on my compliance adventures, I recall a non-profit leader who approached compliance not as a burdensome task but as an opportunity for introspection and growth. They recognized that compliance is not just about ticking boxes; it’s about examining their organization’s practices, identifying areas for improvement, and nurturing a culture of transparency and accountability.

This leader, with their team by their side, embarked on a transformative journey of self-reflection. They audited their processes, questioned their assumptions, and sought ways to align their operations with the spirit of compliance. And you know what? They discovered hidden gems along the way innovative approaches, streamlined workflows, and strengthened relationships with stakeholders.

Compliance became their compass, guiding them toward a higher standard of excellence and trust. It was a journey that demanded resilience, but it also brought tremendous growth and an unwavering commitment to doing things right. They became the champions of compliance, inspiring others in their industry to embark on their transformative journeys.

 

Navigating Compliance Waters with a Splash of Humor:

As we navigate the compliance seas, let’s remember to sprinkle our journey with a touch of humor. Compliance may seem like a serious business, but there’s room for laughter amidst the regulations. Share amusing #ComplianceCapers stories with your team and industry peers. Create a “Wall of Compliance Shame” adorned with lighthearted tales of close calls and funny mishaps. Embrace the power of levity to alleviate the stress that can accompany the compliance journey.

But, my fellow adventurers, let us not forget the importance of compliance. It is not merely a box to check or a hurdle to overcome. It is a commitment to integrity, accountability, and the well-being of our organizations and the communities we serve. Compliance allows us to build trust and maintain the reputation we have worked so hard to earn.

Celebrating Compliance Milestones: Anchors Away!

As we navigate the complex compliance waters, it’s essential to celebrate each milestone along the way. Completing a thorough audit, implementing robust internal controls, or submitting a flawless report are all achievements that deserve recognition.

Throw a compliance-themed party, complete with nautical decorations and a toast to your team’s hard work. Create a “Compliance Captain of the Month” award to honor those who go above and beyond in ensuring adherence to regulations. Share your successes on social media with the hashtag #Anchors Away Compliance and inspire others in their compliance journeys.

 

A Final Word of Encouragement: Resilience in the Face of Challenges

Before we part ways, let me acknowledge the challenges you may encounter on your compliance voyage. The ever-changing regulatory landscape, the complexity of industry-specific requirements, and the sheer volume of documentation can be overwhelming.

But fear not, for within you lies the resilience and determination to overcome these challenges. View each obstacle as an opportunity for growth and improvement. Seek guidance from compliance experts, engage in industry networks, and learn from the experiences of others.

Remember, my dear fellow navigators, compliance is not a solitary journey. Reach out to your peers, share your triumphs and challenges, and create a community of support. Together, we can sail through the compliance seas, celebrating milestones, and embracing a culture of integrity.

Introduction: A Journey Into the Realm of Financial Wizardry

Greetings, aspiring financial wizards and business enthusiasts! I’m Jen Pollinger, your guide to unlocking the secrets of bookkeeping—a mystical realm where numbers come alive, ledgers tell tales and financial organization becomes your superpower. Today, we embark on an adventure to understand the basics of recording financial transactions and maintaining ledgers. So grab your quill, don your wizarding hat, and let’s dive into the magical world of bookkeeping!

 

The Power of Bookkeeping:

Imagine this: You’re the master of your business universe, juggling countless tasks and striving for success. In the midst of this whirlwind, bookkeeping emerges as your trusted ally, bringing forth the power of financial clarity.

 

Bookkeeping is the art of recording and organizing financial transactions, casting a spell that transforms chaos into order. It unveils the secrets hidden within your business’s financial story, empowering you to make informed decisions, seize opportunities, and nurture sustainable growth. But fear not my friends—this wizardry is not as daunting as it seems. Let’s uncover the enchantment together!

 

The Ledger:

Within the realm of bookkeeping lies the mystical ledger—an ancient scroll that chronicles your business’s financial journey. It captures the ebb and flow of your transactions, acting as a gateway to financial insights and wisdom.

Think of your ledger as a magical canvas, where each stroke of your pen reveals a financial masterpiece. By meticulously recording your revenues, expenses, assets, and liabilities, you weave a tapestry of financial clarity. It’s a dance of numbers, a symphony of transactions, and you, dear reader, are the maestro of this magical ledger.

 

Cracking the Bookkeeping Code: Unveiling the Basics

Now that we’ve entered this world of financial wizardry, let’s unravel the mysteries of bookkeeping and understand its fundamental elements. You don’t need a magic wand—just an open mind and a willingness to dive into the realm of numbers.

 

 

1. Recording Financial Transactions: Every time a financial event occurs in your business—be it a sale, an expense, or an investment—you capture its essence through meticulous recording. These transactions become the building blocks of your financial story, revealing patterns and trends that shape your business’s destiny.

 

2. The organization is Key: As you embark on this journey, the organization becomes your faithful companion. Create a system to keep track of your receipts, invoices, and financial documents. Embrace the power of technology, with accounting software as your trusted sidekick. Together, you’ll conquer the chaos and emerge victorious in your quest for financial clarity.

 

3. The Balance Sheet and Income Statement: These two enchanted artifacts hold profound secrets within them. The balance sheet portrays your business’s financial health, showcasing your assets, liabilities, and equity. The income statement, on the other hand, unravels the tale of your business’s profitability, revealing your revenues, expenses, and net income. Study these treasures, interpret their messages, and gain a deeper understanding of your business’s financial landscape.

 

4. The Magic of Reconciliation: In the world of bookkeeping, reconciliation is a powerful spell. Regularly reconcile your financial records with bank statements and other external sources. This ensures accuracy, identifies discrepancies, and maintains the integrity of your ledger.

 

Embracing the Bookkeeping Adventure:

As I reflect on my own bookkeeping adventures, I recall a small business owner who discovered the transformative power of financial organization. They were initially overwhelmed by the idea of bookkeeping, seeing it as a tedious task that took them away from their true passion—running their business. But as they delved deeper into the realm of financial wizardry, a shift occurred.

 

They realized that bookkeeping was not just a necessary evil but a gateway to business success. By maintaining accurate records, they gained a clear understanding of their cash flow, identified areas of excess spending, and discovered opportunities for cost savings. They unleashed their inner financial wizard, taking control of their business’s destiny.

 

With newfound clarity, they made informed decisions based on real-time financial data. They confidently pursued growth opportunities, knowing the financial implications and risks involved. Armed with this knowledge, they forged ahead, expanding their offerings, and attracting new customers.

 

But it wasn’t just about numbers and spreadsheets. This small business owner discovered that bookkeeping brought a sense of peace and order to their entrepreneurial journey. By taming the financial chaos, they found a renewed sense of focus and purpose. They were no longer lost in a sea of uncertainty but navigated their business with confidence.

 

As their business flourished, they celebrated milestones along the way. They threw parties for reaching revenue goals, rewarded their team for their contributions, and shared their successes with their loyal customers. Bookkeeping became more than just a necessity—it became a catalyst for joy and celebration.

 

So, my fellow aspiring financial wizards, as you embark on your bookkeeping adventure, remember that it’s not just about debits and credits. It’s about unlocking the power of financial clarity, gaining control over your business’s destiny, and finding joy in the journey.

 

Embrace the magic of bookkeeping, and let it guide you toward business success. Create a ritual around your bookkeeping tasks, find a comfortable spot to work your financial wizardry, and infuse the process with your unique style and personality.

 

Together, we’ll conquer the world of financial organization, one transaction at a time. As you record your business’s financial story and maintain your ledger, remember that you are the author of your success. Embrace the power of bookkeeping, and let it unleash the full potential of your business.

 

Keywords: Bookkeeping, financial transactions, maintaining ledgers, small to mid-sized businesses, financial organization, business success, recording transactions, ledger, balance sheet, income statement, reconciliation, financial clarity, growth opportunities, joy, celebration.

 

Ten Easy-to-Adopt Internal Controls for Small Nonprofits

A Financial Auditors Perspective

By Jennifer Pollinger, Founder and Managing Partner, JLW Business Advisors LLC

 

Small to medium-sized nonprofits are often faced with the challenge of balancing sufficient internal controls to safeguard the organization with the burden of too many internal controls on their small accounting department. In this article, we will provide ten easy-to-adopt internal controls that any small to medium-sized nonprofit can implement today.

Entity-Level and Information Technology Controls

Entity-level controls are the foundation of an organization’s internal control structure. These controls include the control environment, risk assessment process, control activities, information and communication and internal control monitoring. The enforcement of ethical standards, hiring of competent financial staff and appropriate assignment of authority and responsibilities are examples of entity-level controls.

Information technology controls are safeguards that protect accounting systems from unauthorized access or data manipulation. Password protection and automated data entry accuracy checks are examples of information technology controls.

Transaction Controls

We have broken down our recommendations on transaction controls into three key areas: the cash disbursement cycle, the cash receipt cycle, month-end closing and financial reporting.

Review Invoices

Invoices should be reviewed by department heads or someone with knowledge of related charges before being entered into the general ledger by the accountant. The check signer should review the related invoices for approval when reviewing and signing checks.

Review Employee Reimbursements

Employee reimbursements and credit cards should be reviewed by an employee’s superior. The executive director’s reimbursement or credit card should be reviewed by someone on the finance committee monthly. This review can be performed after payment to speed up processing if it is already being reviewed by the accountant upon entering the expense into the general ledger.

Review Payroll Reports

Payroll reports should be reviewed by the executive director before cash is transferred to the payroll processing company. During the payroll report review, the executive director should review for gross pay compared to approved wage rates and reasonableness of deductions.

Limit Accountant Authority

Prohibit the accountant from being the authorized signer on:

• All bank accounts
• Investment accounts
• Line of credit

Review Significant Contributions for Donor Restrictions

Significant contributions should be reviewed by the accountant and a development department employee or the executive director to identify donor restrictions.

Analyze Donor Restricted Contributions

On an annual basis, donor restricted contributions should be analyzed to determine if the purpose of those restrictions have been met by the organization. This can include reviewing expense reports by fund from the general ledger to validate that the costs were incurred to meet purpose restrictions.

Reconcile Donor Database to the General Ledger

A reconciliation of the donor database to the general ledger should be performed at least annually. However, a monthly reconciliation will provide a faster close at year end.

Review Monthly Statements Outside of Accounting Department

The review of monthly bank reconciliations and statements should be performed by someone outside of the bookkeeper/accountant position or outside of accounting (for an organization that only has one employee in the accounting department). This review could be performed by the authorized check signer as that person would have visibility into what significant checks were written during the month. Other possible reviewers might include the executive director or a member of the finance committee.

Create a Month-End Close Checklist

Create a month-end close checklist that lists all month-end controls such as account reconciliations, financial statement preparation, review of manual journal entries, the check register, and payroll reports. The list should contain two columns for preparer and reviewer signoff. Each task would be initialed and dated by the reviewer and preparer. This review process can be performed by another person in accounting, the executive director, or a member of the finance committee.

Review Monthly Financial Sheets to Statements

Review monthly financial reports, including the balance sheet and budget to actual statement of activities by the Executive Director and the finance committee. Additional review can be performed by department budget managers who are responsible for approving expenses.

Stay Current

It is important for an organization to analyze its control structure annually to determine if changes have occurred within the organization that may require a change in the design of the controls. These significant changes could include the need to change the employees that are performing the controls or adding additional employees if the organization were to expand.

Internal controls are crucial to the success of any organization, especially small to medium-sized nonprofits. These ten easy-to-adopt internal controls will help any small nonprofit to protect their organization while avoiding an excessive burden on their accounting department. The implementation of these controls can help to ensure that the organization is running smoothly, and that the financial records are accurate and reliable. As management determines which internal control procedures are necessary for their organization, these controls can be customized and adapted to meet the unique needs of the organization. By regularly reviewing and updating these controls, nonprofits can protect themselves from potential risks and stay on the path towards success.

 

Need help?  Contact us today for a free consultation.

How an Outside Controller Can Help Improve Your Small Business Finances

By Jennifer Pollinger, Founder and Managing Partner, JLW Business Advisors LLC

 

As a small business owner, you may have engaged an outside controller or accountant to clean up your financials for annual tax planning and preparation. However, wouldn’t it be beneficial to have an on-call financial and business advisor throughout the year to assist with understanding financial statements, management reports, and analyzing data to make more informed decisions? In this article, we will discuss specific ways an outside controller and advisor can benefit your small business and recommend ways to improve the financial health of your company.

How an Outside Controller Can Help Improve Your Small Business Finances: Continuous Support and The Ability to Train Your Staff to Maintain Accurate Financial Data.

To maintain accuracy and consistency in your financial data, an outside controller can provide continuous support and training to those involved in maintaining the books on a daily basis. As a small business owner, you will most likely have a bookkeeper, office manager, or are even performing the accounting duties yourself. Utilizing an outside controller, as needed or when questions or non-routine transactions arise, is much easier to deal with in the moment rather than correcting those transactions, after the fact. For example, when an inspection of the books is required for audit purposes in a period long after the transaction originally took place can be quite costly and amended tax returns might be required.

An outside controller can also help to reduce time and cost savings during the monthly routine of closing the books. Ensuring proper accounting procedures are being followed throughout the year will reduce the time for the year end close. One often overlooked accounting procedure is the segregation of duties. An outside controller can review the current segregation of duties and make recommendations. For example, the person who opens the mail should not be the person who does the required entries and deposits the checks.

How an Outside Controller Can Help Improve Your Small Business Finances: Objectively Assess Workflow Processes to Improve Accuracy and Speed of Information Delivery

An outside controller can objectively assess the current state and workflow processes used to manage the accounts receivable, accounts payable and payroll functions. From this assessment, we can recommend areas for improvement, switch from manual data entry to automation, as well as better utilization of the accounting software, which will improve accuracy and speed of information delivery.

A workflow assessment can also map out each step to create an easy-to-follow checklist for the end of month close.  Which will help your staff and you understand where exactly what needs to be done in what order to create a smooth five-day end of month close.

How an Outside Controller Can Help Improve Your Small Business Finances: Recommend Ways to Strengthen Internal Controls to Minimize Fraud

An outside controller can recommend ways to strengthen internal controls and practical segregation of duties to minimize the occurrence of fraud. Mid-sized companies and larger corporations design, implement, and monitor their internal controls, and the right outside controller can bring these benefits to your small business, as well.

As a small business owner, you must protect your business like you protect your family. Internal controls prevent fraud and costly mistakes.

In conclusion, an outside controller can yield many benefits for small businesses. For example, ensuring accurate and consistent data for better decision making and turning that data into a tool for better planning and budgeting. By continuously supporting and training staff, objectively assessing workflow processes, recommending ways to strengthen internal controls, and providing examples of successful implementation, small business owners can improve the financial health of their companies. So, decide if an outside controller is the best decision for your business.

 

Contact us today to see what an outside controller can do for your business.