January is finally behind us. The stress of tax filings is over, and hopefully, our software has been updated for all the last-minute tax law changes. Take a breath and relax, you deserve it. Now you can start planning for all the changes in 2018.
Preparing for FASB
One of your primary tasks for 2018 is preparing your financial information for the new FASB reporting standards. It’s been 25 years since we were introduced to the concept of Temporarily Restricted funds in FASB 116 and 117. Time has shown the current reporting to be less informative than it could be, at best, and misleading, at worst. The pronouncement is more complex than this article is prepared to discuss, so be sure to get a jump, by starting the conversation with your auditor, as you may need to change some of your transaction recording methodology to comply, come year-end reporting time. Better to be doing it now than have to restate transactions at year end.
Aligning with Organizational Objectives
Every year, you should take a step back and look at how your financial system is working in relation to your present organizational objectives and requirements. Does your chart of accounts meet the current reporting needs or are you limping along with an old, outdated chart that no longer models your requirements?
Too often, we find new programs, grant sources, or services are shoved into incompatible segments within the chart of accounts to make the best of a less-than-ideal design. There are options – from modifying your chart and segment structure to starting anew and transferring relevant data into a new structure. If you have a fiscal year, then now is the time to start that review, so you can have something in place for the new year.
A big topic the last couple of years has been fraud prevention. Internal controls should be designed so that fraud opportunities are kept to a minimum. But, remember, controls should not cost more than the loss they are designed to prevent. Now is a good time to start your review of system security, paperwork flow, approval processes, and staff assignments. Your software system also has options designed (into it) to help protect you. One example is linking an accounting user login to a vendor ID, so you can be alerted if a system user is creating invoices for themselves.
Conducting Process Reviews
Integrations are a hot topic in most organizations because they can result in efficiencies that can free your staff from mundane, repetitive tasks. The explosion of web-based systems for everything from employee expense reporting, outsourcing of accounts payable payments, even document imaging systems, is driving the need to find ways for these disparate systems to talk to each other.
Process review should be a formal project on your horizon. Looking into what you do and how you do it is the starting point for improvement. How much time will you save by putting an electronic workflow in place of a sneaker net? While we often hear about paperless environments, that isn’t a realistic goal. What is possible, however, is to take a single piece of paper, turn it into an electronic document, and then complete the process without generating more paper.
These items should be on top of your agenda for 2018. This is by no means a definitive list, I’m sure you can think of a variety of areas to explore. My advice is to take a discreet process, examine it, and find a way to improve on it. Make a list of those areas and check them off as you go through your review. And once one process is completed, move on to the next. You’ll gain not only efficiencies, but a tremendous sense of accomplishment.
About the Author
Michael Golub, CPA, is President of NP Solutions, Inc., Abila Business Partner of the Quarter. Each quarter, Abila recognizes the top Business Partner, based on its continued support of nonprofit organizations. Abila Business Partners are trusted experts, authorized to resell and implement one or more Abila products.