Money Matters

Financial automation: 7 manual finance tasks for non-profit organisations to say goodbye to 

Even if you love numbers, you know there are inescapably dull accounting tasks to do if you're not using financial automation.

Even if you love numbers, you know there are inescapably dull accounting tasks to tackle if you’re not using financial automation.

Take copy and paste.

If you’ve worked with Excel spreadsheets (and, let’s face it, in finance you probably have), copying and pasting data between Excel sheets is snooze-inducing.

As you painstakingly swap a set of numbers, you’re unavoidably aware that you’re probably going to make a mistake down the line, and you’re going to scream with anguish at your computer screen because the numbers don’t add up.

Manual processes are the bane of any financial team’s life.

You may have already had discussions about how laborious processes can drain your productivity. How the task of entering data into financial systems remains a manual and error-strewn one, one that’s probably left members of your non-profit organisation’s finance team screaming into the void.

But there are ways to overcome these challenges. And that’s where financial automation comes into play.

Here’s what we cover in this article:

Challenges non-profit organisations have with manual financial tasks

Why non-profit organisations should automate their financial tasks

7 manual tasks for non-profits to save time on, using financial automation

Final thoughts on financial automation

Non-profit organisations have way too many challenges for finance people to get sucked into time-consuming manual processes.

Your financial needs are unique to other industries. You have responsibilities that include donation management, tax-exempt accounting and government funding.

The problem is that non-profits have traditionally lacked funding, which means you may not have invested in cloud financial management software. This will leave you with a lack of:

  • Accuracy in financial reporting
  • Automation for repetitive processes
  • Proper governance
  • Efficiency across your organisation.

However, by accessing top-class technology tools such as the aforementioned cloud financial management software, you can modernise your back-office processes for the better.

Automation is just one part of a modernisation and digital transformation overhaul that non-profit organisations need to carry out to make the most data available to them.

To have maximum effectiveness, a non-profit finance team needs:

  • Real-time financial, operational and outcomes data
  • Reporting that is up-to-date, accurate and communicates critical insights
  • Automation that reduces or eliminates manual data entry and redundant tasks
  • Integration between systems that tears down data silos and enhances internal and external communication.

Through cloud financial management systems, any employee in your organisation can view, access and collaborate on data from anywhere.

With automation, you can switch from being reactive and slow-to-adapt to future-ready and resilient.

So what exactly are the manual tasks that you can save time on with cloud financial management software?

1. Manual consolidations, currency conversions and intercompany eliminations

Manual consolidation, where you combine financial data from several subsidiaries within your non-profit organisation for reporting, can be a painful task.

It’s not just a case of adding numbers, there are specific calculations and consolidation adjustments you need to make, such as currency conversions if you operate across different countries.

Non-profit finance professionals widely use spreadsheets to perform financial consolidations. But if you’re doing this, you’re risking errors when loading data from different systems and creating workbooks with multiple tabs.

You’re also not leaving easily accessible audit trails, which are necessary in today’s regulated world.

It’s much better to automate consolidations with cloud financial management software from any internet-connected location on the planet. You can routinely consolidate hundreds of entities in minutes, not days.

This type of financial automation leaves time for high-value tasks, boosting productivity by up to 50%.

2. Manual revenue recognition

Revenue recognition can be complicated for non-profit organisations, as it’s easy to struggle to account for your many revenue streams. They could include donations, gift and grants, and membership fees that are due.

Additionally unhelpful is the ambiguity and complexity often found in regulations around classing revenue.

Currently, your non-profit may manually calculate revenue recognition in Excel after exporting sales data from your customer relationship management (CRM) system.

You could make your job a lot easier by streamlining and simplifying the process by using a modern cloud accounting solution, which will reduce the complexity and time you are spending on these tasks.

3. Manual reconciliation of data between systems

Today, one of the big problems non-profit organisations have is disparate data. This is where you hold information on multiple spreadsheets, databases and data sources.

You’ve got in this situation because you’ve acquired different tools that don’t work with each other.

Suppose you’ve found yourself in this position. In that case, you’ll know about the problems with disparate data—again, rekeying data across different Excel spreadsheets isn’t how you want to spend your time on a Friday afternoon.

Instead, imagine having an ecosystem where you’re automatically integrating disparate systems.

A dream where you are synchronising the real-time data they contain between financial systems such as accounting, billing, expense management and budgeting, and other business systems, including CRM, business intelligence and fundraising.

You can work in this way. Many fortunate well-positioned non-profits already are.

4. Manual allocations

Cash allocation, where you distribute money to where you want to spend it, has traditionally been quite a long-winded and labour-intensive manual task.

Usually, it involves your staff manually identifying and allocating direct costs (such as shared programme costs) and administrative costs (such as management and organisation-wide technology costs).

It’s much more effective and efficient to automate the calculation of allocations that require data from multiple systems, such as IT costs per headcount or revenue per employee.

You should also think about automating the allocation of indirect costs, revenue contributions, assets and liability amounts across projects, departments and other critical dimensions of your organisation.

Automating allocations let you see the impact of your allocations, which will undoubtedly help your decision-making.

5. Manual vendor payment approvals

It’s common to see non-profit organisations approve vendor payments manually from one person to the next in a payment approval chain.

That’s slow, unwieldy and certainly not the most efficient way of doing it.

Instead, set up a paperless, automated approval workflow that tracks each step and stores approvals. Everything stays in the system, which means you have complete visibility into approvals and payment status.

Your staff will also save some much-needed time by not having to chase down approvals or looking through email chains.

6. Manual reporting

Manual reporting with Excel spreadsheets is still widespread in the non-profit sector. But doing your reporting in this way costs you a lot of time, resources and money.

Spreadsheets don’t work for speedy reporting. To do it properly, you need to develop metrics, gather and verify data from different systems, build data models and create formulas.

Manually, it’s a painfully slow process.

If you’re looking at saving significant chunks of time, you should undoubtedly automate your reporting above any other financial management task.

Ideally, you want to create easy-to-use reports, dashboards and visualisations to help you look forward and plan for programmes, fundraising, staffing, and more.

These time savings will allow your non-profit to move staff to more strategic tasks.

And when leaders review reports, they’ll be looking at real-time data rather than month-old information.

7. Manual audits

Audits are a prolonged, convoluted process if you have to export data from an Excel spreadsheet for your audits.

If you’re auditing manually, it’s common practice to add notes to each paper audit you scan, upload, and email. Then it’s a case of manually entering results in a spreadsheet.

You can undoubtedly see errors coming in and the hours ticking along being spent going through your paperwork.

Use cloud financial management software instead.

You’ll be able to organise transactions so you and your auditors can easily trace transactions from the financial statements to the general ledger to the sub-ledger to the supporting documents and back again. You can demonstrate the accounting path, so you and your auditor have a positive (and quicker) audit experience.

By establishing a clear and complete audit trail from transaction to report and reconciliation, auditors will be able to test your organisation’s accounting processes. Superior data organisation, transparency and tracking will reduce the time needed to complete your audit.

Less time working on spreadsheets equals lower audit costs.

As you can see, there are many reasons for non-profit organisations to pursue paperless financial automation in the cloud.

Not only will the finance team be able to work at maximum productivity, it will also be able to use staff to their highest potential instead of spending their time rekeying data.

Automation across key financial management areas will allow you to spend less time on routine tasks and more on analysis of results and planning how to do more for your mission.

The technology is there to speed up your finance team and has been for some time. Whatever money your non-profit may be saving by not buying the right software, you may well be losing when it comes to the time spent on slow manual financial processes.

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