Name: Reclaim Your Day: Strategies to Reset Your Nonprofit Revenue Workflows
Uploaded: 2026-04-14T18:30:08.415Z
Duration: 56 min 8 s
Description: Reclaim Your Day: Strategies to Reset Your Nonprofit Revenue Workflows

Transcript for "Reclaim Your Day: Strategies to Reset Your Nonprofit Revenue Workflows": Hi, everyone, and welcome. My name is Caroline, and I'll be kicking things off today. Thank you for joining us for strategies to reset your nonprofit revenue workflows. Before we dive in, let's quickly cover a few housekeeping details. On the right hand side of your screen, you'll see the control panel with chat, docs, polls, q and a. These are your tools to interact with us throughout the session. I saw someone already ask about, today's slides and that will be in the docs tab there as well. In the docs tab, you can download today's webinar. We'll also send you an email of the webinar recording after the session. For polls, all poll questions will appear in the polls tab, which pops up in the control panel during the presentation, and each poll will stay open for a few minutes so you have time to respond. If you're looking to earn CPE credit, responding to the polls is required. The polls tab will disappear once the polls close. Feel free to chat with us and other attendees during the webinar. If you have questions, submit them in the q and a box in your control panel, and we'll answer as many as we can during the session and at the end. For any streaming issues, if you experience any problems, try refreshing your browser. This usually resolves the issue quickly. And then, also, if you are a current customer and have a question about your software, we recommend using the chat or calling the support number provided here. Just to go over again, CPE credit is available for the session. You must answer all three poll questions to receive that CPE credit, and certificates will be sent out within two weeks of the webinar over email. If you have any questions or issues, please reply to the email or contact here. And with that, let's get started. I'm excited to hand things over to Andrew. Hello, and thank you, Caroline. I'm very happy to be with everybody today, to talk about ways to make kind of the revenue management cycle a little easier, things to walk out for watch out for, some kinda takeaways to think about, as we've kinda done the series to reclaim your day. I just know as a as a CFO, sometimes I get lost just trying to match things up, do reporting. And also how to finance try to control what goes out. I know a lot of organizations where development or program teams will just send out reports to funders without ever checking with finance, which is a little scary to me. So just ways to kind of develop that workflow to think about it to kind of control and strengthen what your organization's doing and how it's reported on. Quick about me, I'm the director of finance here at Fifth Avenue Committee, an affordable housing nonprofit in Brooklyn. I'm also the founder and partner of Finovate for Good, who we'll get into at the end, but it's really a a consulting firm designed to help you get the most out of your process and system. I've been in a nonprofit deal for about fifteen plus years, and there you can see my two real bosses in life, not pictured my wife, my daughter and my son. So to kinda walk through what we're gonna be going through today, we'll we'll start with kind of what we all experience to kinda give us a a a level playing field, talk about where the problems come from, are some of the hidden costs of bad workflows, what a well designed system might look like, and thinking about every organization's difference or thinking about what you can take away from that because not every not every suggestion is gonna fit for your organization. You might have too little, too many people. You might have an executive director who might re be resistant to change. So trying to find that sweet spot of ways you can change within your own organization. A little self assessment and some diagnostic questions to kinda think about modifying your revenue workflows and move forward and thinking about what a functioning system would look like, and then we'll wrap up. So before we kick off, thinking about when we talk about the the problem structural, just as a baseline, When I talk to nonprofit finance departments and think about my own finance department, I always think about every problem can usually be weighed down to one of three things, people, process, or systems. And for the most part, I've never had a nonprofit finance team that's overstaffed, so it's almost always not people. You might have some attitude problems, but we can find there there are ways to deal with that. It usually comes down to process or systems. Now if, in the for profit world, most of the times just we'll just buy a new system. That'll fix everything. But as I think most of us are aware, in the nonprofit world, we can't just buy a new system. That costs money that's taking away from the program, so it usually gets down to process. And how can we fix our processes to really get the most out of our system and people before we have to make any other investment? Because that's usually the free lever we can pull would be the process. So little bit of a scenario. Think about how you started your day today. And think about you came in, most of us have either have had our coffee, haven't had our coffee. In my case, I've been through two toddler meltdowns already. You sit down at your desk and you realize you get an email from your development people or your program people. You have a funder report due today. And, of course, you were given zero lead time, zero warning, but it has to be in today or you're gonna lose grant funds. So you open up your financials and you realize, hey. I haven't closed the books yet for March, but we need March 31 numbers. So I'm gonna take my GL, take my trial balance, take my p and l in my system, put it into Excel, and I'm gonna start making some estimates of where I think the number should be. And then you get interrupted by somebody coming into your office. Somebody emails you. You come back to your spreadsheet. Call them g the right number. Where did these numbers come from? And then you so what what most of us do, let's open up the last time we had reporting for this funder. Well, these numbers don't have a crosswalk, and they don't match within the system. So where did they come from? And on top of that, you get another question about, hey. We got this new grant. What cost can I put to them? And you've never seen the grant agreement. You didn't even know we won this grant. And now your inbox is full, your coffee is cold, and your report is due at forty eight hours or it's due today. Forgot to put a forty eight hour timeline on this. Thought it was today. Really, no one's checking these things. There's usually not a process, and if you have a process, good for you. But if that's not a bad day, for me, some days, that's a regular one that I'm trying to chase things down. I I I took over for somebody here at 5th Avenue that had been here for twenty five years. There are things that I'm still discovering that don't have a crosswalk that are hard coded numbers. The hard coded numbers are the bane of my existence in report. If you're gonna make adjustments, give me some give me a crosswalk, give me a formula. But that's not a system. That's a a patchwork to try to help you get somewhere. So thinking about where your organization sits today and thinking about your reporting cycle, whether that's your audit, whether that's a funder report, whether that's year end, whether that's, six thirty because you go out of state and city funding or federal funding, which will be nine thirty. Thing about do you just survive? Do you just get everything done and hope for the best and hope that no one ever corroborates all the numbers? Do you have a process that, you know, we have a process that gets things done. It's not written down. Do you have one person in your organization that you are fully dependent on? Or as most of us out, you know what? Things get done. A lot of blood, sweat, and tears, and this is just how it is. It's never gonna change. I'm the person who doesn't accept that answer as, many people find out when they work with me. We've always done it this way or this is how it has to be is not an answer. It's something we live with, but how can we make it better? How can we move forward? And I think that that's a lot of it is thinking about how to sometimes taking that step back, which none of us have time to do during our day. But how can we take a step back and look at everything holistically to try to do it? And that's hopefully what you all take away from this today. That'll bring us to our first of three poll questions to get CP credit, and that will be launched. So you'll see that above the chat, you'll see poll. Let me just clean my glasses a bit for a second. So I'm just gonna read that poll out loud. How long does it typically take your team to produce a funder ready expenditure report? So if you got an email right now and said, hey. For this grant, we need a report of how much we spent through let's let's say through February 28. That gives you a month and a half in in in arrears. How long would that take you? So now thinking about where the problem stem. We we've I think we've identified there can be a problem, things can get messy, but where where is the heart of that problem? Where is the roots of that problem? And like I said, most of the time, it's not gonna be personal. It's not gonna be personnel. It's not gonna be system. It's gonna be structural. It's somewhere in your process. Something happened long, long ago in a in a land far, far away that has created this process flow within the way you do things, that is broken. And understanding while we try to make standardized reports, standardized processes, you're always gonna have that one funder that wants their spreadsheet that makes zero sense to you, but you have to fill it out. So thinking about how to make a workflow that is able to accommodate these weird requests, but also is standardized. So thinking about what a normal nonprofit's revenue streams are, and it usually falls into one of these three buckets. And as it says there, each revenue stream plays by its own rules. And even within the revenue stream, it can play by their own rules. Anybody who has government contracts knows it can vary wildly between agency to agency in the same municipality. I'm in New York City. All the New York City agencies are entirely different of how they want things. And thinking about how we have to do that. Thinking about your grants. Some funders want very specific things in their reporting. And some, give me the income statement for your system. Doing great. Let's go. Love those funders. Thinking about when you just get contributions. I think contributions for me sometimes lead to the most disagreement especially between finance and development because that's where you tend to have development having conversation with the funder and the funder having an intent of where this money is being spent. But that's not ever communicated to finance because it's not actually documented. It's just a donor intent when making the money, but it's not part of a grant agreement. It's not part of it's not even on the check for operations. It's just the donor intended for it, but in a legal sense, it's an unrestricted donation. And then thinking about earned income, which if you are lucky enough to have some earned income within your nonprofit, it can usually ease the burden on your development team. But there's costs are going up. There's margin pressure. There's UBIT considerations. We if you're competing with for profit entities, you do have to pay tax. And then there's usually service delivery tied to that revenue. It's not just free money. And people who are in the earned income space see development contributions as free money. There is no such thing as free money. If you have free money, please let me know. I'd like some. But thinking about all these things have to have their own workflow of how we do it. We're mostly gonna concentrate today mostly on the first three because earned income can vary a little wildly depending on what that income actually is. But we're gonna we're gonna mostly look at the money that's coming in from funder, from governments, from contributions, and think about how to track that and really get that compliance. Takes us to our next slide. The thing about that is even when you have four revenue streams, if you try to have one process for all of those, it's gonna lead to problems because as we said in the last slide, each of those revenue streams is different. Even like I said, even between the contracts bucket because that can be the most complex one. You could have eight different types of workflows within the contract bucket depending on where the funder is, depending on the program, depending on what you're paying out. Because some contracts, if you're paying salaries, you don't have to have as much backup as if you're paying, OTPS. And then what's the indirect cost? Because it could change from grant to grant, contract to contract, funder to funder. But if you're doing everything outside of your system, outside of a process and everything is ad hoc as it comes up, it's really gonna create bottlenecks, errors, compliance risk, and it's gonna lead to burnout. And once you get that burnout, what happens is if you do not have a documented process, you end up losing somebody who everything's in their head. I always say, what would happen think think of your organization, whether it's you or somebody else. Like, I know at my organization, we have a contract person. And if he won the lottery, I think he'd come back, but I'd hope if he won a $100,000,000,000, he would not come to work tomorrow, take a day off. I know I would. But what would happen? How much institutional knowledge is in his head? And we are working to document it, and I'll give some tips of how to document that at the end. But he has the contacts. He has the documentation. He has the backup. So thinking about how to make this a formalized process. Where are we saving things? How are we saving it? How are we how do we submit these various funders? Who has logins to all these different portals we now have to use? Because every organization, every funder, every governmental entity has their own portal. So how are we submitting our receipts, our invoices? Is it a reimbursable grant, or is it something we get prepaid? Who has that information? So now we've seen kind of the workflow how it can go in many, many different ways. So what are the hidden costs? And when I think about this, it really comes out to those four costs that can happen when you do it. There's a compliance risk, either government compliance or funder compliance. There's a leadership visibility. If you submit reports that you're correcting or are wrong or your executive director or president gets them or board gets them and they find errors and are correcting them, that is a reputational risk to your finance and accounting department. If you're not able to deliver solid numbers, people aren't going to take what you're giving seriously or think about how you're doing it. So really think about that. There's a capacity drain. The more ad hoc stuff you get, the worse it can be for your staff who are actually doing the work or you. Some of us don't have staff. Some of us, we are shops of one. I've talked to enough of you. So thinking about how to ease the capacity. I say every time I work with a new client, the goal is at three or 04:00 on a Friday, we have our feet up, sipping margaritas, sipping your drink of choice because we've developed that capacity. And I was talking, at a seminar in Chicago with with my friends at Blackbaud last week, and one of the things that seemed to hit home for people I was talking about is when we think about capacity drain, I always think about when I'm scheduling people, I try to schedule them to 80% capacity. So if you have a forty hour work week, I'm trying to go to thirty two hours and make sure you have thirty two hours of worth of work. Why? Because things come up and there's always gonna be an emergency. And if you schedule somebody at a 100% capacity, what happens when there's an emergency or some urgent task that needs to be done? They don't go they don't do their original job. They don't do originally what they had set out to do. And now they're even more behind. But if you build in that cushion and you build systems that have a cushion in there, you're gonna set yourself up to rich success. If you build a system that, hey. It takes us a week to get a standard funder report through our system, through our review process. So you know what? I'm gonna set up my process that gives us two weeks to process a funded report because then you're giving yourself a cushion. You're not saying, hey. It takes us a week and we're gonna only need a week's notice. You're you're ask you're setting yourself up for failure. And then the last thing the last hidden cause is your current process. What if you got three more grants? What if you got three more contracts? And even as as sizable as they can be, do you have the capacity to grow? Or is your ad hoc process holding you back? So thinking about that compliance risk, and I think when we think compliance, we think contracts and governments, but I'm taking a lens that's a little wider. So what happens if you have an audit finding? Not even in a single audit or regular audit. What happens if you have a something in your even in your management letter that maybe it's not an audit finding that that, is a significant deficiency, but it's something the auditors put in the letter to the board. I know enough funders that ask that management letter from audit that if something's in there, no matter how minuscule and maybe it's a small finding, it's still a finding and funders are gonna ask about it. You could damage your funder relationships. There is a scarcity of donation dollars. I think we're all aware of this with what's going on in the world. Do not give your funders a reason to question you and your mission. And I think part of that is having steady, reliable reporting, being able to answer those questions as they come up in a a year review meeting. And making sure you're not undercharging, overcharging, charging the wrong grant. The last thing you want a funder to be able to do is call back money that you've been relying on. So making sure your books and records have the appropriate data, have the appropriate tagging, have the appropriate funds where it's where it's sitting, I think is really big. Second one, go back to. Leadership visibility. So well, well, quote from my article that I wrote, so I'm quoting myself. Takes three days to produce a clear picture of your restricted fund balances. So your executive director comes to you and said, hey. We have this opportunity. I need to know how much is in the HARO fund. If it takes you 3 or 4 days to get that number to them or at least an estimate of that number, we could have missed out on an opportunity. We could have missed out on something. And any delays like that, it starts putting doubt into the ability of your finance and accounting team to do your job. And that's the last thing you want people to be able to do is doubt what you're doing and how you're doing. So thinking about being able to produce these things in real time. And it doesn't have to be perfect. I always say, accounting is this weird balance between accuracy and timeliness. And being able to make real time estimates, but know where you're estimating. Go back to that original scenario we talked about when I talked about, I look at six months ago, it doesn't tie to the accounting system, but hey, everything's hard coded so it wouldn't even matter. Make sure if you're making ad hoc reports, pull the trial balance you're using and then show the adjustments. I had an organization where their board wanted financials after the second business day of the month. Anybody who's ever done accounting in nonprofits know that is entirely not possible to have accurate numbers the second business two business days after the close of the month. So what I would do is I would take the trial balance at that point, and I had a spreadsheet where I would just have a have columns where I was making estimates and adjustments, but I would show everything in the trial balance. So there was a crosswalk to the trial balance I had from the system to what I was presenting. That way if there ever any questions, it was clear what I was doing. And I think thinking about how to make those reports hold up under that front under scrutiny and really being able to have numbers that allow for strategic plan. Thinking about, hey. Where do we need funding? Where are there gaps in the organization? If you're not able to deliver, information about how your money is being spent and where the organization is for thirty, forty five days after month end, that data is already stale and worthless to the people who are out there in the field and to the people who are trying to get new funding opportunity. So thinking about what the capacity drain is. So where time actually goes today when I meet a lot of nonprofits? The first one is manual data entry. I am big on what automation and AI can do is take away that first x. How can we get rid of data entry? How can we even have our lowest level staff doing that first layer of review rather than entry? How many times have we all rereconciled spreadsheets to back and forth, back and forth, back and forth? How many spreadsheets have that checked? When do you have three screens and three different windows at the same spreadsheet open? Or like I said, looking at what was done six months ago and having zero idea what's going on. And every single time you get a request, you're you're going through the general ledger and pulling out expenses to put in your grant funding. What we should be doing other times, analyzing our fund performance. Reviewing the grant fits strategically. It might sound blasphemous to a program team, to a development team, but not every dollar that you can receive is a good dollar. Are there things that your organization shouldn't be doing? Should we get back to our core? How much is this actually costing us per per participant, to spend, per person we're helping, per program? How are we monitoring drawdown schedules? Do we know which organization which grants are reimbursable, which which are lump sum payments that we just report on? Because when you think about cash flow, you need to know how your money's coming in. And a lot of us don't have that visibility into all our grants and contracts. Are you flagging risk early either where we're gonna overspend or underspend? I always say it's easy to go back to a finder and ask for permission. Hey. We're not gonna be able to spend it in the next three months. Can we have a two month extension? We had some employee turnover or we had some things just that didn't work out. Can we have a little bit more time? Most funders are open to that, but you have to ask in advance, not after the not three months after the grant closed. Hey. Can we apply expenses for another three months? They don't like that. And thinking about that next funding cycle, it's it's something when I was on the consulting side, it's you always have to be selling, and it's the same thing in development. Once you win a grant, you gotta look for the next one and the next one because funds funds disappear. In the past, you would think federal and government funds are the most steady thing ever. We all know that's not the case now. You always have to be looking for what the next funding cycle is, where the new opportunities are. And you don't know what those opportunities you need unless you have good data backing it up. And then thinking about that last risk is what is the capacity we currently have, and how can we grow with it? And this is the one that usually comes down to with a process and a systems frame. So thinking about how you're and when I say systems, it's not necessarily a technology system. It's the system of how you how things are requested. Is there a calendar of reporting? Thinking about what your capacity is for your staff today. With all the stuff they're doing. We all have day jobs on top of these ad hoc reports for funders. So think about that. What are we doing today and how much how much wiggle room do we have? Or are your staff at about forty, forty five hours a week of work just to get to a baseline? Alright. Development's out there pursuing new funding anyway. And more times than not, finance is not seeing what the requirements for that new funding is until agreements are signed. I know I've worked with organizations where we had to fight tooth and nail. We got the CFO to be part of the contract approval process for any funding. That way, finance was aware of what was being signed. We've all gotten those grant agreements that are signed, sealed, and delivered, and sometimes already funded. And then you see the laundry list of things that we have to report on, and it just makes us cry. So thinking about that, if your organization happens to be in a very good place funded, think about having a minimum dollar amount for custom reporting. I've worked with an organization. This was before the pandemic, so times were much better. But they were in a place where they could say, you know what? Anything under $25,000, you just get our financial statements. We're not gonna do custom reports because it costs us too much within finance to give you a custom report. And they did turn down some funding because you don't wanna run into those delivering compliance struggles. You don't wanna have timeline slip. You never wanna be the the organization that misses a deadline because you then the funder starts questioning you, and there's gonna be six organizations that are gonna want that money. And then once one funder questions you, we all know the nonprofit world, everybody talks. So once one funder questions you or decides not to fund you, everybody knows about it and then everything's in jeopardy. So thinking about how to maintain as you scale and making sure that you are not being roped into something that you're just not able to deliver. That brings us to the second poll question. So which of these hits closest to home in your organization right now? When you think about, you know what, this is the thing that keeps me up at night. And maybe it's all four, but choose choose the one that that hits home most to you right now. And it seems like and this doesn't surprise me. A lot of people are coming back with that capacity drain because I think a lot of us, even with the other ones, we just don't have time for all this because we're buried in that transactional work. And if that's you and you have not listened to our other reclaim your day as a CFO webinars, I would go back and watch them because that's what these are really this series was designed to do was to free yourself up from that transactional work. Shameless plug. Probably did need an all of the above option, but we were trying to go with which one gets to you the most. I'm gonna go back to the PowerPoint. Thank you. So we've thought about a scenario. We've thought about kind of where the problems can stem from. We've thought about the cost. So now what? Now I'm I'm in the fetal position under my desk crying. Now what, Andrew? How are you gonna make my life better? So when I think about a well designed revenue system or process, First one comes down to role clarity and thinking about who codes it, who's the main point of contact with the funder, Who's preparing the report? Who's reviewing the report? Who gives the data of the report? Maybe this report has finance and nonfinancial data. Let's identify where everything is coming from. Let's think about how we're getting stuff into our system and into into the report. And who's the who who owns it? Who's the one that's in charge of making sure the budget that we gave to the funder is right or over the contract if there's a budget modification? Who does that? Making sure you're identifying every step of the way who's in charge. Because the minute somebody's not in charge of a part of the process, then no one's gonna own it. I was in a meeting yesterday where I was somebody was asked for budget modification and three people all said that's not my job. And we realized for this grant, we had never identified who was owning the grant. We everybody had their little piece that they were doing, but no one was collating all the information together. And we actually had money that was sitting on the table. We were acting as a interest free bank for the state of New York. That got rectified, and that is being processed today. Consistency. Do you have documented procedures? If you had a new person starting your department or in development or in operations, how are they learning about your process? How do they know? Do you have this documented? Do you have a nice little and I would even say like a whole process manual. Give me a process flow. Let me take my finger from end to end of a process to make sure. How does who sees a draft grant agreement? How are how do we approach where our needs are? Who's in charge of entering the reporting dates into our razor's edge with the the funder and the grants or into financial edge into our grants module? Who's who's entering that? Not having ad hoc judgment calls. Who's owning this? And making sure that your process is repeatable and making sure that it's not one off that, hey. Every month, we're gonna be able to do this with the capacity we already have. Thinking about that transactional work you still have to do. The process you're creating, is it gonna work? And also making sure you have that buy in at the top so that when you create a new process that it's enforced and people are following it. So thinking about that role clarity. Excuse me. So thinking about we have a grant or contract that we have the expenses that need to be tagged. So we go out, we do a training related to a grant. Who's in charge of making sure that expense is tagged to the grant? How in your AP process is that getting tagged? One of the ways I say for any organization, I try to get to the point where what my budget owners are responsible for is a, telling me that an expense is in budget, and b, telling me the funding source, if there is one. I do not want my budget owners telling me the account code. That is my job. That is my accountant's job. That is my staff's job. I do not want my program people worrying about my charter account. What they have to tell me is, hey. This comes from the Harrow Foundation. That's where the fund should be tagged and making sure it's tagged in the system. Who's reviewing that? What is your process for reviewing the ledger for untagged expenses within your program or making sure that your allocations are working or that your indirect cost is coming over? Are you doing in end of the month, are you sending them a a report of everything that's not tagged? Are you having meetings with them? I would say if you've never done something like this, have a meeting. Just sit there. Go through the ledger line by line. It can be a little painful, but that way you're looking at everything and you're you're in sync. Who owns the report and what and by when? Who's sending it? Who has it on their calendar to make sure it gets done? Who is making sure that, hey. What the nonfinancial data the program team gave us matches the financial team the finance team gave us. Who is in charge of that? Who is the one that's owning the reporting at the end of the day? So thinking about the various timelines, to do. And when I'm talking about reporting, that's gonna be what funders ask for. So sometimes they want their specific spreadsheet or it's the income statement. Some want a narrative about what's going on. It can vary from funder to funder. If it's a government contract, they want their special form filled out to make sure costs are, allowed or unallowable. I think that's where this gets a little tricky is there is no one stop report for all this. It really varies funder to funder, data, money source by money source. What how big the grant is, how small the grant is. If it's a federal money, you have to have special requirements for a single audit that's not necessarily report wise, but you need to make sure within the system you're tracking it appropriately. So then we've thought about who's in charge for each contract, grant, contribution. So now we get consistency. And if you don't have protocols within your organization, that first one, like I said, in my nonprofit, I took over somebody who'd been here for twenty five years. I I think people have learned, if they say that first one on the left side, that is what's gonna make me lose it during the day. I'm usually a very calm person in my day job, but that's where I'm gonna lose it as we've always done it this way. Or the other thing I get a lot, which I find funny is, we do that. Well, when's the last time you did that? Before COVID. If you haven't done something since COVID, it does not exist as a process. I'm just gonna say that flat out, and I've said that to my board. I've said that to my executive director many times. Coding decisions vary vary by who's working. This can lead to a lot of problems. Do you have one person who's in charge of your coding, or how does your stuff get approved? The the best organizations that I see have this is there's a controller or the CFO, who's in the details, at the end of every process, just checking the coding and making sure that everything's lined up, pulling those month end reports and making sure that my budget to actuals work and that everything makes some sort of sense. How going back to how you onboarding staff, it takes months. They have to sit with people. They have to write their own procedures. They have to figure out the Rosetta Stone of how development and finance and programs all talk together. Do you have errors across periods? You know what? We we made an error two years ago on this funder report of how it rolls, and we're just gonna roll with it. And usually if you don't have documented processes, you are at risk of institutional knowledge walking out your door. The thinking, you know what? We have protocols. So we have coding guidelines for this revenue type. This is where this is where it goes. For federal money, here's the allowable cost. Here's the thing. Also, what I say is if you have a budget spreadsheet with cost, make sure you have the account code next to those accounting categories. That's gonna make sure that when people if your program people are coding things, they're gonna know where to put it. And that creates consistent treatment regardless of who's coding, gives new staff a a a walkway of how to learn. You're usually gonna catch discrepancies earlier, and it the knowledge ends up belonging to the organization, not one person. So having that coding in your budget allows a new person to see, oh, this is where I should code this expense because that's where it's budgeted. Whereas opposed to having professional fees, you have the actual account number on your budget. I think I've seen that help immensely. So once we have so we have who's in charge. We have a process that we feel good about. There's gonna be some consistency. Now we now can we repeat it? Can we do our month end close? You know what? We have grants we have contracts that we have to bill monthly. So when is our month end close gonna do? Okay. Let's roll right into funder reporting. We've done our funder reporting. We know how much we should get. So let's review our cash flow. Alright. Let's see if there's any other reports we have this month. Having a significant and repeatable month end close, quarter end close, year end close, I think is key to making a repeatable process. And I I say month, quarter, and year because it goes back to that accuracy versus timeliness. And I always say month end, you're probably to close sooner, you're gonna have more estimates. You're gonna have more accruals. You're gonna have more things that maybe just aren't right. You might have to be a little conservative because you're just not gonna get things, but you're gonna do that. So thinking about that, you have your quarter close. You might have to be a little more accurate. You might have some debt covenants or bank reporting or some funder reporting. You have to get a little more accurate. So maybe month end, we get done in five business days. Quarter end, we get done in fifteen business days because we wait for some things. And then annual, you have to get everything perfect for those auditors. So it's pesky auditors that we can't live without. Trust me. I've tried. Things have to be a little more exact. It's gonna take longer to close. We're gonna have schedules for everything. But I think part of this is telling your people, you know what? I say having my month end. I'm gonna get my program people budget actuals in five business days. But you know what? It's gonna come in the caveat of things might be missing. We're not gonna do many accruals. We're gonna do some big things, but you know what? We're not gonna wait for you to tell me what's missing. We're just gonna get you these reports and at a quarter end, you're gonna get new reports once we fully close. And that's the best way to and I see in the the chat to prepare all this every month, prepare for the auditors all year. But to get a good month end closeout to get one that's gonna be timely, it's usually not gonna be as thorough as your annual close. There are things that I just don't do on a monthly basis that I do on an annual basis because they don't have a significant impact on the reports my program people need and my board needs to make decisions. And I, as a CFO, need to make that decision of what's important and where is that timeliness. Because I know if I can get spending reports out the third day of every month for my program team, it's more important than making sure my all my prepaids are tied out to a t, that my reoccurring journal entry just runs. And you know what? We'll true it up at the end of every quarter. Or, hey, I don't run depreciation every month. I run it every quarter. I don't have many fixed assets, but you know what? That's not gonna throw up any budget to actual no one understands what depreciation is at a nonprofit anyway for the most part outside of finance. And there are little things like that that I will estimate some things. Like, I've worked with organizations. Another example I give is where they were they had self funded insurance. So they didn't know their actual insurance cost for the month until about fifteen to twenty days after the month end. So what we did is we took a budgeted number and every month we would just book that. And that's what would show up in my board reports. That's what would show up in the management reports. We would close the books and then next month we would make an adjustment and usually adjust it up and down. But thinking about where you're gonna go is true. And that leads us to our final poll question. So this goes back to have your staff written and documented how to code each revenue and expenses for each revenue type? Google's answer. And and the the main vote getter does not surprise me that it exists, sort of. We haven't updated in a while. Some people use it. It's good to see a lot of people do actually use it and have it. The more you have it, the more it makes it easier to find things, to do things. And I would also say it also tells you and sometimes this comes with the chart of accounts redesign, but where do you need detail and where do you not need detail? Because sometimes you can try to simplify your chart of accounts and becomes too simple. Or you try to make it detailed and it becomes too detailed. But how many times do you stare at your chartered accounts and don't know where to put things? Maybe it's a little too detailed. Or you know what? When I need to do a funder report, I have to pull the GL and tear apart a few accounts. Maybe it's not detailed enough. So thinking about that. So we've thought about kind of what the problem is, where the risks are. Alright. So let's actually have some takeaways today. Let's have some things that we can work on because like like me, I assume most of you are like me when you walk away from a webinar. You have great ideas for the next thirty seconds, and then you open up your inbox that you've been ignore ignoring and forget everything we talked about. And then you're sitting three weeks from now going, that was a good webinar, but I am never gonna be able to implement any of that. So let's do a little self assessment as you're sitting there. Thinking about how long did it take you if like, going back to the first scenario, you got an email when you got off this. You got an email at 01:30, so you did not see it in time. So it's not a half an hour late. I need this funder report by the end of the day through 02:28. Would you be able to do that? Would you be able to give a p and l for a specific funder through February 28 by the end of today? Now if you're on the West Coast, obviously, you have some more time to do that, so more power to you. But think about that. Going back to the poll question, do your staff have written guidance how to code each resume type? That's your staff. Are they reviewing that? Are they hand entering it? How do people know where to find things when they go in the general ledger? Is that written down? Is that done? Next question. And this one, I think, is hard for some of us because we don't have a team. And it's one of the few things I liked about being public accounting is when I was on vacation, I could fully check out. As a CFO, I could never fully check out because there's no one to replace some of my job duties that just comes with the territory. But if you're a person below you, we're out for two weeks. What would come grinding to a halt? And I think this is important to think about because I think there are people in this world who are afraid to take vacations because they know they're coming back to more work than they have on a regular basis. So think about what would come to a grinding halt if the person below you Or if you're the low band on the totem pole, good job taking some training. But what would come to a grinding halt if you were out? What would no one pick up? What would be sitting on your desk waiting for you? Somebody emailed you Friday at 06:00 when you left Friday at five, what would be waiting a week later and no one would pick up? To that matter, who in your organization would they completely ignore and out of office and expect you to respond? Because that's a problem too. So number four, how many manual steps exist between revenue is received and wanted to enter correctly in your system? Think about it. Every email, spreadsheet, verbal hand off. So when I started at 5th Avenue, revenue was booked on a cash basis except for on 06/29. We have a year end of $6.30. So there would be nothing in the system if it didn't come in cash until the end of the year where my predecessor would spend two weeks working about eighty hour weeks to record a year's worth of revenue on a an accrual basis, which I thought was weird because every time we get a signed contract, my development team sends it out to him and says, hey. This can be booked. Oh, no. Indeed. But, hey. This can be booked, and I didn't understand why why don't you book it when you get the notification? And then it's in this system. And then when the money comes in, you know what? You're applying against AR rather than, okay. Now I have to go to the budget and see which programs we allocated this to and see how it's gonna be reimbursed and how we have to tag it. So thinking about how that what is that step that exists between you finding out that there is a new grant contractor contribution and they're getting in your system. And how can you make that a little more processed? Can you create, say, a Microsoft form or a Google form rather than an email announcement? You know what? Let's enter it here. Here's the information I need is fiscal or finance. Can you just put it in this spreadsheet and that's my notification along with a link to the actual contract? Something simple. Let's make it simple on people to do it. So thinking about those four things are really a starting point for thinking about how to modify that revenue cycle. And it probably will lead to more changes, more process changes, more system changes, more software changes. But these four things can really get to the heart of our revenue cycle. How can we get design an end to end that there's more structure? Because like I said, there's always gonna be emergency. There's always gonna be things that work or don't work. There's always gonna be last minute requests. It happens. Funders, because they're giving us money, get to demand a lot of things. So how can we really make this more structured? Alright. So I have successfully gotten inside your head. We've thought about some things. We've made it better. You know what? I just found myself with, like, let's just say even two hours a week. What am I gonna do with that time? Now we all think about those things that I have a whiteboard right here. So my son is seven months old. There are things on this whiteboard I wanted to do that are from before he was born because there is just not enough hours in the day. But But thinking about what we're we're gonna do with that time. You have time for analysis. And now, like I said, getting away from data entry and actually reviewing the work rather than, spending all your time coding and classifying. Being able to review budget actuals by grant, by contract, and make sure that we're on track. Proactive drawdown management. Track schedules. Make sure we're on track to spend the whole grant. And it really goes back to that permission versus forgiveness. Make sure that you are asking for things in advance rather than after a grant ends going back to a 100 and say, hey. Can we modify the budget or can we modify it? I I was working with an organization. They just asked last week to modify a budget for a state contract from fiscal year twenty twenty four because they had not done the reporting. They had not prepared properly. Making sure you're having that strategic grant evaluation is not all money is good money. Depending on what strings are attached being what depending on what you're being asked to do. Making sure that the money you are going after as an organization is truly a need and going to further the organization, but not take too many resources within your admin, within your program teams on reporting. And I know that's a hard conversation to have and most executive directors and program teams think would think it would be blasphemous if you ever said, hey. Maybe we shouldn't do this. But it's something you need to think about. And making sure that you have the capacity to take on new things as they come up. You the last thing you wanna do is get a new shiny new grant or contract. Everybody's all excited and USP will go, yeah. We can't service this. We either need to outsource that servicing or hire new people, and then all the money you just earned is going to admin. And really building that confidence within that finance department, I think, is key. So where should you start? And I always think this is big to explain and I always try to do it is sometimes this can be overwhelming. We have the four diagnostic questions. Write them down and maybe even sit your team down. Buy lunch. Have a have a brainstorming day like, hey. We're gonna go through these four things. Where are the where are the holes in our process? Where are things wrong? Let's have a brainstorming day. Throw everything at the wall that's not working. Pick one revenue type. What's your biggest? Where is your where is your most reporting requirements? What's most complex? Think about how to fix that one. And the biggest part of this is step three. Document what you're doing today. Even if you think you have the worst process that has ever been invented, I wanna hear about it because I don't think it is. I've seen the worst process ever invented. Map out every single step. Who does it? What system it touches? Where the data depends they are? How long it takes? Sometimes seeing it on paper, you can you will you'll reveal duplicative effort. You'll reveal bottlenecks. You'll reveal things you didn't even know. And it will help you design a new process because you'll make sure you're not losing anything. Anybody's ever heard me talk hears me talk about the sync example with my old credit card system, but do it. And a great way I see some in the chat, you wanna document your process. I say this is the best use case for AI as it exists today. Have your people open up a Teams or a Zoom. Hit record and talk through the process. Screen share. Record that. Take that recording, pop it into AI, and say, hey. Can you make me a process map based off what you said? It's not gonna be perfect. There's gonna be a lot of errors. But you know what you're gonna have is a starting point to review. And sometimes that's even best best, practice. Then start coming up with that coding guide. And maybe it's as simple as taking the budget you have for each grant contract and putting the account codes by the line items. Simple as that. Let's start there. Let's tell people where they should code things. And I think the step five is key. As you're doing all this, make sure you're using you're bringing in development. You're bringing in programs. If finance designs this process alone, the process will not survive. But if you're bringing in other departments, you're bringing in other voices, that's where you're gonna get some some buy in. You're gonna get people working with you. So what what are the takeaways today? Problem is not structural structural. It's not personal. I think as you go into this process, think about it, redesign it. A key is no one's doing anything wrong. We are just trying to do it better. I think another thing is people have their spreadsheet. You know what? It works. I've seen some very complex spreadsheets. I've seen some spreadsheets that I actually can't even make better, but they come with a hidden cost. And eventually, every spreadsheet will break. I guarantee it. Or one drive will fail or Google Drive will fail or Box will fail because it didn't sync and it didn't save. Six starts with clarity, not software. There are great softwares out here. We are looking we are here today with a great software company that can do so many things. But if you do not look at your process, map it out, and fix it first, even the best software is going to be a waste of money. You do not want a Corvette that you have to push. And that that leads to number four. Start with a workflow audit, not a tech audit. Map out your workflow. See what you're doing today before you start examining new systems and technologies. It can go hand in hand, but putting what you're doing today in a new system is not gonna fix it. It's just gonna make you mad in a new system. And this is not perfect. There is no straightforward way to do this. Every organization is do it different, but start slowly. Process goes piece by piece. It's a slow, painful process. So that about wraps us up today. So there is my information. If you ever need anything, I am here. So just to give you an idea, so Fitivate for good, I am certified in about six different accounting systems. The goal is to help us as nonprofits get the most out of what you're using today. And if we've hit the limits of the systems because I know them inside and out, it's helping you through that process to find a new system by first mapping out your processes. If you don't need my help but enjoyed yourself today, I would and you have the means. There's a QR code to make a donation to my nonprofit to thank my executive director for letting me take the time out of today to do this webinar. We'll get the questions. Caroline, anything as we wrap up here? Awesome. Thank you, Andrew. Yeah. So I've just pulled out, two poll questions that you guys can feel free to answer. And then just to kinda go over some of our resources again, we have a few blog posts and white papers that we thought you'd find helpful. And then I know we've got a lot of Financial Edge NXT users in the room, but for those of you who are not current Financial NXT users, I want to draw your attention just to the product tour that we have linked out in the resources section. And if you wanna take this conversation a step further and explore exactly how we handle these workflows in our software, the product tour is a great place to start. So, again, that's in the docs tab. And thank you guys all so much. Let's see. Are there any questions? I think, there was a question. yeah, is, there is it possible to get a copy of the presentation? That is also, in the docs tab, and then it also will be emailed to you, after this presentation as well. And I would I would also say, another question of how to get started, and I think we hit on some of this. But find that I would say if you're no idea how to start start, take a simple grant contract you have and take a complex one. Put them together and literally buy your team lunch and let's sit down and let's say, hey. Can we create a process that would give us reporting for both of these? Because if you can create a process for your most complex and your least complex, then you're well on your way to designing a repeatable standard process for your revenue management. Just check the chat one more time. No. I think we're good. Well, thank you everybody for joining us, and, looking forward to to seeing you all next month. Have a good rest of your day. Awesome. Thank you, guys.