Navigating Bookkeeping for Nonprofits: Tips, Tools, and Best Practices
In this episode of The NonProfit Nook, host Wendy Kidd is joined by Kelsey Gleason, co-owner of Educated Bookkeeping, to explore the distinct challenges and strategies of bookkeeping for nonprofits versus for-profit businesses. They discuss the importance of understanding financial reports, customizing chart of accounts, and the significance of training and quality control for volunteer bookkeepers. They also cover practical tips on selecting a professional bookkeeper, using QuickBooks features like classes and projects, and highlight a crucial financial metric every nonprofit board should monitor. The episode aims to provide real tools and strategies to help nonprofit leaders and boards manage their finances more effectively.
Links:
https://www.educatedbookkeeping.com
https://www.instagram.com/educatedbookkeeping/
https://www.bosslevelengaged.com/services-for-nonprofits-nonprofitnook
https://www.youtube.com/@BossLevelEngaged
https://www.instagram.com/thenonprofitnook/
00:00 Introduction to Nonprofit Bookkeeping
01:28 Meet Kelsey Gleason: From Teacher to Bookkeeper
02:05 Challenges of Nonprofit Bookkeeping
05:03 Advice for Small Nonprofits Without a Bookkeeper
05:49 Training and Software Recommendations
10:27 Hiring a Professional Bookkeeper
18:59 Understanding Financial Reports
22:08 QuickBooks Tips and Tricks
26:33 Final Thoughts and Key Takeaways
30:37 Conclusion and Farewell
Mentioned in this episode:
What's different about bookkeeping for a nonprofit
2
:versus a for-profit business?
3
:Kelsey Gleason: Okay, so from
our perspective as bookkeepers,
4
:the biggest difference is that
we're working with boards.
5
:We're not working with a, a business
owner who has financial, uh, and
6
:emotional investment in that particular
business and has a goal and objective
7
:that they're working to obtain with.
8
:With boards, obviously every
nonprofit is different with
9
:how that board is structured.
10
:Board members come and go and as they
come and go, their objectives and
11
:goals for that organization change.
12
:And as a result, sometimes our work
has to change to accommodate those
13
:changing perspectives, ideas, and
goals for the nonprofit organization.
14
:Wendy Kidd: Welcome to The NonProfit
Nook, the podcast for nonprofit
15
:leaders, board members, and community
change makers who want to build
16
:stronger, smarter organizations.
17
:I'm your host, Wendy Kidd, a longtime
business owner and nonprofit leader.
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:And I'm here to bring you real talk,
real tools and real stories to help
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:you thrive in the nonprofit world.
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:I'll be talking with local nonprofit
leaders, community change makers,
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:and experts in everything from board
development to fundraising and digital
22
:tools, sharing real stories and simple
strategies you can actually use,
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:because running a nonprofit is hard,
but you don't have to do it alone.
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:Let's get started.
25
:Today's guest is Kelsey Gleason,
co-owner of Educated Bookkeeping.
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:A former high school math teacher
turned into an entrepreneur.
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:Kelsey brings her love of numbers and
passion for helping people in the world
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:of small business and nonprofit finance.
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:Since launching Educated Bookkeeping
in:
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:She's built a thriving client list,
including nonprofits like Hugs Cafe.
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:Kelsey doesn't just manage the books.
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:She teaches business owners and
nonprofit boards how to truly
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:understand their financial reports
and use them to make smarter decisions
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:all year long, or at least we hope.
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:Kelsey Gleason: We hope.
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:Wendy Kidd: Welcome Kelsey.
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:Thank you,
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:Kelsey Gleason: Wendy.
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:Wendy Kidd: I appreciate
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:Kelsey Gleason: you having me on today.
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:Wendy Kidd: Of course.
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:I'm so excited to talk about what is most
people think as a boring subject and.
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:A nerd subject, but as I
just told a previous podcast
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:guest nerd is welcome here.
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:So
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:Kelsey Gleason: Perfect.
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:Then I'm, I'm ready and excited.
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:Wendy Kidd: Yay.
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:Okay, cool.
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:So let's start off with something
that I think most people don't even
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:understand, but they know is a thing.
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:What's different about bookkeeping for a
nonprofit versus a for-profit business?
53
:Kelsey Gleason: Okay, so from
our perspective as bookkeepers,
54
:the biggest difference is that
we're working with boards.
55
:We're not working with a, a business
owner who has financial, uh, and
56
:emotional investment in that particular
business and has a goal and objective
57
:that they're working to obtain with.
58
:With boards, obviously every
nonprofit is different with
59
:how that board is structured.
60
:Board members come and go and as they
come and go, their objectives and
61
:goals for that organization change.
62
:And as a result, sometimes our work
has to change to accommodate those
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:changing perspectives, ideas, and
goals for the nonprofit organization.
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:Wendy Kidd: I can only imagine because
as an event planner I have been through
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:that with working with just the bride
or working with the bride and the
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:groom and the mom and the other mom
and the other dad and the stepdad.
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:And it becomes a board in and of itself,
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:Kelsey Gleason: you're managing
a lot of different personalities.
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:They all kind of bring their own
agendas and ideas to the table.
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:And that can be great for collaboration.
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:The group as a whole isn't,
, isn't quite able to assimilate
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:that into a single vision.
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:It can make juggling that those many
personality dynamics, a little bit more
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:challenging than it can be when you're
just working with a single owner of.
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:A business.
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:Wendy Kidd: Well, and I'm sure you're also
dealing with a lot of board members and or
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:staff members that don't even realize what
a financial report is or how to read it.
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:So they certainly don't know what
their goal is for reading that
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:report and what it should look like.
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:So thus the name, I'm
sure, Educated Bookkeeping.
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:Yes.
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:Kelsey Gleason: A lot of it,
what we do is especially, uh, at
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:the onset of a partnership with.
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:Either a business or an organization
is first of all sitting down trying
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:to understand what their objectives
and goals are, and trying to make
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:sure that those reports reflect in
a nice, easy, user friendly way.
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:What those goals are.
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:Um, and we typically like to sit down with
them, uh, at least a few times during the
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:first couple rounds of months and make
sure that what we're presenting them with
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:from a financial report standpoint aligns
with the information they they need.
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:Often times most of these softwares
come with generic charts of accounts
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:that are set up just to hit the
high points, but aren't necessarily
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:designed specifically for what that
organization or business needs.
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:And so, um, making sure you take the
time to customize those items to really
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:reflect the needs of the organization
or business is super important to
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:make those reports far more useful.
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:Wendy Kidd: Yeah, and we're gonna
talk a little bit more about that in
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:a minute, but first I want to ask for
those, those little tiny nonprofits
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:who have not hired a bookkeeper.
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:They've, they don't have anybody in
house to do it and or they don't have
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:an outsourced, what, what can we do?
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:What can we talk about to help them?
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:What are your recommendations for
those people who are basically dealing
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:with the bookkeeping themselves?
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:Kelsey Gleason: Right?
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:So, always one of those things.
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:I think it, it's.
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:It can be super challenging.
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:Often times it's a volunteer stepping into
that role who may or may not have, uh,
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:any kind of background or education in,
business finance or nonprofit accounting.
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:And, and they, they just want
to be, helpful and do the best
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:job that they can, but we're not
sure necessarily where to go.
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:I would encourage.
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:I would encourage any board that
is putting this onto a volunteer
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:to get them some training.
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:Yeah.
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:If this is something they really
want to do as a way to help the
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:organization, give them the tools
they need to be successful at it.
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:Guessing and checking or looking up
on YouTube is, is fine to a certain
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:extent, but it's extremely time consuming
and any volunteer needs to be using
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:their time in a inefficient manner
to help support that organization.
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:Um, so first start with training.
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:When it comes to softwares,
there's tons out there.
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:I mean, there's tons of free ones
like Wave, um, and there's, uh,
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:like FreshBooks and HoneyBook, and,
and popular ones like QuickBooks.
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:But regardless of what you're working
with, if you haven't checked out
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:something like Tech Soup, where
tons of softwares are available
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:at reduced costs to nonprofits.
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:I really encourage you to go there.
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:QuickBooks is the one accounting software
that they, they offer up, up there.
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:And the QuickBooks plus subscription,
which is typically $80 to a hundred
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:dollars a month through QuickBooks, you
can get for $80 for the entire year.
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:So it's a pretty steep discount for
a software that is going to be with
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:the organization for the long term.
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:It also offers plenty of other
things like donor management systems
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:at significantly reduced costs.
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:But, , if you haven't
checked out tech Soup.
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:Do that.
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:You may find that it has far
more than you can imagine.
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:And you know, as a nonprofit, spending
that donor money is super important.
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:You want to be fiscally responsible
about it, make good choices, and
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:use all the resources available
to you so that you can find.
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:Wendy Kidd: Yeah, for sure.
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:And we want to just, for those who don't
know what TechSoup is, it is a wonderful,
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:wonderful website for nonprofits that
gives them discounts or free software.
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:So definitely go there,
definitely check out QuickBooks.
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:One of the things that you and I talked
about before also was hiring someone
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:to set the software up correctly.
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:And I think that goes hand in hand
with the training you mentioned.
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:Absolutely.
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:'Cause you can absolutely hire a
CPA or a bookkeeper to just do that.
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:You don't have to have that monthly bill.
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:Correct.
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:But you can at least have that first
setup fee of getting that chart of
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:accounts like you want it, getting
the software set up and then training
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:whoever's going to be inputting things
to be able to use that and to be able to
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:pull the reports that they need to pull.
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:And, and you also
mentioned quality control.
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:Can you talk about that a little bit?
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:Yes.
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:Kelsey Gleason: So it.
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:You know, we're all human.
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:Uh, no matter what job we're doing,
none of us are ever gonna be perfect.
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:So you've got a volunteer, who is
working on the books, who is presenting
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:your financials every single month?
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:Who is helping to make sure
that that work is accurate?
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:Are you just relying on them to make
sure that what they're presenting
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:is a hundred percent the correct
picture moving forward, or are you
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:giving them tools, uh, oversight.
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:A, a partner that can double check
their work, just so everybody
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:feels like what we're getting
out of this is actually true.
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:Mm-hmm.
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:The financial, health and wellbeing
of organization is a lot of weight
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:to put on one person, especially a
volunteer who may not be, a hundred
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:percent comfortable with that role.
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:And the more support you can give them
to help them be successful, whether
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:it is through setting up training or
having somebody review their work.
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:It, it's not meant to be
like a, Hey, I got you.
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:You know?
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:Uh, right.
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:You know, this is what you did wrong.
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:Wendy Kidd: It's not an ambush thing.
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:Yeah.
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:Kelsey Gleason: No, it's not.
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:It's meant to be just a checks
and balance just to make sure
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:that what's happening is actually.
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:Um, is actually true in that report.
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:Give them, give them the tools they
need to be as successful as possible.
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:Wendy Kidd: Absolutely.
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:Because you know, your board is
looking at your reports and they're
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:looking at, is the money being used
the way it's supposed to be used?
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:They're not necessarily looking at, did
we actually spend that much on our gala?
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:You know, they, they understand that
that's what the report tells them,
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:but they're not drilling down into
the transaction by transaction.
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:So you've gotta have somebody
else who's gonna help you balance
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:that and make sure it's correct
before the board actually sees it.
197
:Um, a lot of times I think that's
the treasurer on the board mm-hmm.
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:Is that that person who's
gonna double check things.
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:Because typically, you know, you've
got your executive director or somebody
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:who's functioning as an executive
director, whether it be volunteer or
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:not, they're doing that hard labor.
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:And then the treasurer
should be backing them up.
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:And I think.
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:It's really important for the treasurer
and that person to have a good
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:relationship, a good feedback circle,
which we have a podcast on that.
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:Check out how to do fa feedback, but you
know, have that trusting relationship
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:between the two of them so that
they're working as a team, not just as
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:somebody trying to catch the other one.
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:Kelsey Gleason: Right, right, right.
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:Absolutely.
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:Perfect.
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:Wendy Kidd: So how, you know, when
we start growing, we get bigger
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:and, you know, bookkeeping takes
up more and more of our time.
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:How do we know when they should go ahead
and hire a professional bookkeeper?
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:Kelsey Gleason: So the, the biggest
indicator is you're not getting
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:financial reports in a timely manner
to maximize your board meetings.
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:Wendy Kidd: Yeah.
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:Kelsey Gleason: If you are 2, 3,
4 months out on reports because a
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:volunteer that is working on them just
doesn't have the available free time to
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:keep up with them on a regular basis.
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:That's kind of the waving the white
flag and saying, Hey, maybe this
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:is something we need to look at
outsourcing so that we can get good
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:information timely so that we can make
good decisions for the organization.
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:Um, that's probably the biggest red flag.
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:Wendy Kidd: Absolutely.
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:And I think that that can come also from
people who are maybe not trained well.
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:Mm-hmm.
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:And causing a problem with
the financial reports.
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:'cause I've definitely been on boards
where the financial reports could not be
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:certified because they didn't make sense.
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:There were problems with them.
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:And if you're constantly having to
go back and do that, you're wasting
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:your board members' time as well.
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:Right.
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:As the staff that's dealing with it.
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:So you know, it may be
time to find a new person.
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:It may be time to reach out to your
donors and say, Hey, for us to use
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:your money effectively, we've got
to pay for a bookkeeper to make
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:sure we're doing this correctly.
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:Right.
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:I think most people would understand that.
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:You know?
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:Absolutely.
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:Transparency is a great thing
when it comes to asking for money,
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:Kelsey Gleason:
transparency, communication.
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:Absolutely.
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:Wendy Kidd: Absolutely.
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:So when it's time to find that bookkeeper.
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:I know you have opinions on this
and I can't wait to hear them.
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:What are some questions to ask?
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:What are things to look for in
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:finding that bookkeeper?
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:Kelsey Gleason: So one of the things, when
we get an inquiry, if the first question
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:is always this, how much will it cost?
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:I typically know that they, they haven't
really had to look for a bookkeeper or
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:worked with bookkeepers, very often.
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:Yeah.
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:You know, price, I, I know obviously
we care about where our donors
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:monies go and we want to make sure
we're spending it responsibly.
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:But, uh, as they, as they often say, good
isn't cheap and often cheap isn't good.
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:So
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:Wendy Kidd: and fast is
in there, I think too.
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:Yeah, something, something in that
saying, yes, cheap is not fast, or if
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:it's not, if it's fast, it's not good.
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:Something like that.
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:Yeah.
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:Kelsey Gleason: Um.
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:So, you know, obviously price is
important, but there are really
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:five other things I encourage people
to consider and ask when they're
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:interviewing, for bookkeeping help.
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:First, how often will the
individual be working in the books?
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:A bookkeeper may work weekly, may
work monthly, may work quarterly.
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:You need to know how often they're
working in there so that you know
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:when to expect things, when you
can expect, uh, timely reports.
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:Ideally when somebody is working in your
books weekly, sometimes even daily, they
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:see on a regular basis what's going on
in the organization or the business.
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:And as a result, can ask more timely,
pertinent questions and be proactive
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:about the financial reporting and
making sure that it's accurate.
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:Uh, if they work on it once a month,
fine, quarterly, fine, but just make sure
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:you're getting that information upfront.
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:The other information you want to ask is
who is going to be working in my books?
282
:You may hire a firm, but I, I mean
there's everything from one person,
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:bookkeeping firms to large firms
with 25 staff, some nationally, some
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:internationally, some outsource and
subcontract to international firms.
285
:Yeah, it, all of those are viable
o perations for bookkeeping firms,
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:but it's important that you know who
you're going to be working with, who's
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:gonna be in there, who will you be
communicating with on a regular basis?
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:And if it is a larger firm,
how often should you expect
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:turnover in that, in that seat?
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:If you're working with an individual
bookkeeper, just a, a individual sole
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:proprietor operator, one of the big
questions for them, and even for something
292
:like a CPA firm is quality control.
293
:So we talked about that earlier for the
volunteer, that should apply also to
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:any, uh, outsourced firm that you, that
you use who is quality controlling the
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:work of the bookkeeper, especially if
it's an organization where you're going
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:to experience a couple of turnovers
and bookkeepers over the course of
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:the year, who is making sure that the
work is consistent, is accurate, and
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:in the long term will be g ood for
reporting at the end of the fiscal year.
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:Sure.
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:So quality control and making sure that
they have some kind of process in place
301
:to ensure the work is of good quality.
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:Wendy Kidd: And this is even for people
who are just one bookkeeper in their
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:business, they should have somebody
who's double checking their work.
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:Kelsey Gleason: Yes.
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:Wendy Kidd: Um, 'cause we all
know, as all small business owners
306
:have to do, we collaborate with
other small business owners.
307
:Yes.
308
:So they should be collaborating
with somebody to check their work.
309
:Kelsey Gleason: Absolutely.
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:Um, and, and again, it's not
supposed to be a a, a gotcha thing
311
:or to be a critical thing, right?
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:It's just solely meant to make sure that.
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:W what's presented.
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:Support your support.
315
:I know.
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:And what's being presented
is the best product possible.
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:Wendy Kidd: If it's your week
to work on that client and
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:you're sick, who's gonna do it?
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:Right?
320
:So we, we need to have
backup systems, right?
321
:Kelsey Gleason: Yeah.
322
:Um, so after, uh, after quality
control, the next thing to
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:ask about is deliverables.
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:So, uh, you know, a lot of people
think about end of year as being
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:the primary objective for when we
want to make sure reports are done,
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:they're accurate and we're good.
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:But if you're a, an active board
that is meeting monthly and you can't
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:get reports for the previous month,
by the time you have that meeting.
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:That's a, that's a concern.
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:Then you're always working on data
that is 6, 7, 8 weeks delayed.
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:So you want to be able to ask
them, so when are you going to
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:officially close each month?
333
:Mm-hmm.
334
:Do you have a guaranteed closing date?
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:Do you have a guaranteed date
that I will get financial reports?
336
:Now in our firm, our financial
delivery date is the 15th.
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:Now we do have some boards that meet, uh,
on like the second Tuesday of every month.
338
:Well, sometimes that's
day eight of a month.
339
:And as a result, we will reshift
our process to accommodate that.
340
:So that board has the most updated
financials for that meeting.
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:It's something you need to really
communicate and ask of whatever
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:bookkeeping firm you are, you are, you're
talking to, to make sure that you've
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:got those firm deadlines presented.
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:Yeah.
345
:Um, you want to make sure you're
going into it with eyes wide open so
346
:that you get through the first month
and you're like, okay, I'm ready.
347
:Can't wait to see these great financials.
348
:And they're like, oh, it'll
be another two, three weeks.
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:Wendy Kidd: Well, and that would
be a red flag for them to look for.
350
:And a bookkeeper is if the
bookkeeper doesn't ask them upfront.
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:Yes.
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:When do you need these reports?
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:Yes.
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:So, yeah.
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:Kelsey Gleason: Yeah.
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:Uh, and then lastly, just security.
357
:So do they have a secure portal that will
allow us to share sensitive information?
358
:If you're accepting, if they're accepting
sensitive documents over email, that would
359
:kind of be a little bit of a red flag.
360
:'cause I, I mean, group email is,
is just not, it's not safe, secure.
361
:Yeah.
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:So we should all know this.
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:Wendy Kidd: Our emails get hacked all
the time and unfortunately there's so
364
:much part of information on our emails.
365
:Kelsey Gleason: Yes.
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:So, yeah.
367
:So if they are that flippant about
receiving sensitive documents.
368
:Before you've even hired them, how
is that, how are they gonna treat
369
:that sensitive information long term?
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:Yeah.
371
:So you want to ask about what kind
of security systems they have in
372
:place to receive that sec sensitive
documentation, and the care
373
:that they're treating that with.
374
:Yeah, just again, another protective
measure for your organization.
375
:So those are really the five things
outside of price you should consider
376
:when looking for a new bookkeeper.
377
:Wendy Kidd: I have to say, even
though I've had many a bookkeeper,
378
:'cause I've been in business
for over 20 years, I didn't know
379
:these things until you told me.
380
:And I was like, oh, that makes sense.
381
:Kelsey Gleason: Well, I, I mean, I think
it's one of those things where finances
382
:can sometimes intimidate and scare a
lot of people, and so Oh, absolutely.
383
:Yes.
384
:And so they don't want to be,
they don't know what to ask.
385
:Mm-hmm.
386
:Or, uh, they don't know
what to expect because.
387
:There, there are no real, set standards
for bookkeepers or bookkeeping firms.
388
:Yeah.
389
:So, you know, you're really kind of
going in blind and unless you have, a
390
:lot of prior experience where you can
pull on that bad experience and that bad
391
:experience and that bad experience and
say, okay, I'm gonna ask all of these
392
:questions of my next hire, so I know I
don't have that bad experience again.
393
:It's almost like you're just
learning from experience instead
394
:of just learning right up front.
395
:Wendy Kidd: And if you haven't
had a good experience, you still
396
:don't know the right questions.
397
:That's true.
398
:I'm just say it.
399
:Just say it.
400
:But um, you bring up a really
good point and that actually,
401
:it gives me a good segue because
people do find this intimidating.
402
:People don't like talking
about the financial numbers.
403
:And it's so funny because.
404
:In a nonprofit world, the number
one responsibility of a board
405
:member is making sure that the
nonprofit is fiscally responsible.
406
:Mm-hmm.
407
:And I can't tell you how many
times board members have told me, I
408
:don't know what this report means.
409
:Mm-hmm.
410
:I have no idea what I'm looking at.
411
:I have no idea what I'm looking for.
412
:Right.
413
:What should I be doing?
414
:And so how do you approach.
415
:Teaching your clients, especially
the nonprofit boards about financial
416
:reports in a way that makes the numbers
less intimidating and helps them
417
:understand what they should be doing?
418
:Kelsey Gleason: Sure.
419
:Uh, a lot of it has to do with first
coming to them talking about what their
420
:objectives and goals are, what information
do they want out of the report.
421
:Then through our setup process or cleanup
process, restructuring that chart of
422
:accounts, so it reflects those goals.
423
:Wording everything in user friendly
language that is clearly identifying
424
:whether we're working at the gala.
425
:Are these gala's expenses, are these
an outreach initiative expenses?
426
:And making sure that that's spelled out
in all of the reports so they can clearly
427
:see, oh, hey, these donations came out
for this back to school outreach event.
428
:These are the expenses we spent on that.
429
:Uh, do those align?
430
:Oh, I can see very clearly in the
reports that we still have $500
431
:left of that specific donation,
that restricted donation, how are we
432
:gonna utilize that moving forward?
433
:Yeah.
434
:Um, I, I think the more clearly you
structure the reports, the more user
435
:friendly it makes them so that when
you have those, that first, second,
436
:or third sit down with the board and
you go through what the structure
437
:is now for the reports and you can
talk through, Hey, this is this.
438
:This is that and drill down into
saying, okay, hat you've noticed this
439
:shift in this particular category.
440
:This is why we saw this increase in
gross wages s ignificantly this month.
441
:A, we were running payroll weekly and
this month was a five week payroll run.
442
:And then, or we had a significant
amount of overtime on staff and
443
:that's why you see the jump there.
444
:Yeah.
445
:Making sure that you're talking to the
board through the numbers about anomalies,
446
:or oddities that may jump out of them.
447
:We like to specifically break
down items like the statement of
448
:activity into monthly sections
so that they can see how the
449
:organization's health has been monthly.
450
:Yeah.
451
:Um, and then that also helps to, drill
down about, you know, when an organization
452
:has a specific event, whether it is
something like a gala or an, or an
453
:outreach or driven or mission driven,
they can see how those expenses affected
454
:the overall bottom line of the nonprofit.
455
:Through the course of the year.
456
:Wendy Kidd: Absolutely.
457
:I, I a hundred percent.
458
:Um, I think it's very important to
orient new board members so that
459
:they understand what they're doing.
460
:And something else to, to throw into that
is you want to make sure you go back to
461
:your bookkeeper when something comes up,
such as we have this new grant and they,
462
:they're going to expect X on the report.
463
:Mm-hmm.
464
:Can you help us figure
out how to report that?
465
:Yes.
466
:Um, so, you know, this is a, I think
this is a constant conversation.
467
:I don't think this is a set
it and forget it situation.
468
:So people need to remember they have
the, having a good relationship with
469
:your bookkeeper is very important.
470
:Absolutely.
471
:And that comes back to communication.
472
:And whoever is in touch with
the bookkeeper needs to know.
473
:These are things that are
important to tell them.
474
:Mm-hmm.
475
:So you can't assume that,
you know, your ED knows.
476
:Mm-hmm.
477
:That they need to go back to the
bookkeeper and tell them, Hey, we have a
478
:new grant and here's what's the report is.
479
:And you can't assume that the board
member knew to do that either.
480
:Right.
481
:Or the treasurer knew to do that either.
482
:So lots of communication there.
483
:I know that you also gave me some really
fancy tips and tricks for QuickBooks,
484
:so I really want you to share those.
485
:What are the things that you like to have
them set up in QuickBooks that make it
486
:easier to get the reports that they need?
487
:Kelsey Gleason: So, there's plenty
of times where I'll take a look at,
488
:uh, a set of books for, I mean, a
business or a nonprofit, and you've
489
:got a chart of accounts that is a
hundred, 150, uh, categories long.
490
:It's incredibly overwhelming.
491
:It makes the reports
two, three pages long.
492
:It, it just is not, um, it's
not a user friendly experience.
493
:And a lot of times they do that because
they are really breaking down at a micro
494
:level, the expenses associated with
this event or that event, or, uh, this
495
:volunteer appreciation or this gala
moment, or this outreach or this mission.
496
:And so something that is, you know,
supplies, which is really just a single
497
:item gets broken down into five or
six other other categories, and it's
498
:now really expanding that report.
499
:Instead of doing that with QuickBooks,
you can actually use classes.
500
:Yes, as long as you have the QuickBooks
Plus subscription, which you can get
501
:discounted through TechSoup, you can
use classes and instead assign, uh,
502
:assign classes to every, donation
to every expense, and then run your
503
:statement of activity by classes,
and then it'll pull those events.
504
:Outreach mission galas things out and
say, okay, these were all of the, this
505
:was all the income assigned to the gala.
506
:This, these were all the expenses
assigned to the gala, and here's
507
:a report that breaks that down.
508
:Yes, it
509
:helps keep the overall report nice,
clean and simple, but still allows
510
:you the detail that you may want in
order to analyze the success and the
511
:viability of some of the programs
that the organization is initiating.
512
:Wendy Kidd: Yeah, absolutely.
513
:So people think about it.
514
:Think about your gala.
515
:Because we all have one.
516
:We all have that moneymaker thing.
517
:You want to track that.
518
:You want to be able to see what
you can improve money-wise.
519
:You've gotta be able to
use classes to do that.
520
:If you are initiating a new program, a new
service that you're putting out, you need
521
:to track what did it cost you to do that?
522
:So make sure you have these
little, little classes.
523
:They're just a little thing.
524
:Mm-hmm.
525
:But they make it so much easier,
so you don't have to go line
526
:item by line item to figure out.
527
:Is this working or not,
528
:Kelsey Gleason: right?
529
:Yeah.
530
:And the other thing is projects.
531
:Another feature of the QuickBooks
Plus subscription is the
532
:capability to track projects.
533
:When you have a restricted grant that
has specific requirements that have
534
:to report, be reported on a regular
basis on how that money was spent.
535
:Um, if you make that grant a project
in QuickBooks, you can run a statement
536
:of activity solely for that grant.
537
:There you go.
538
:Just right off the bat, it's super quick.
539
:You don't have to go through and dig
through all of the transactions from the
540
:past year and try and figure it out, or
like some of those chart of accounts.
541
:Track it in something that's,
you know, three pages long.
542
:You can just track it as a
project, assign a project to every
543
:expense that it's associated with.
544
:Same thing with the donation,
and, and go from there.
545
:Wendy Kidd: Okay?
546
:All the grant writers are gonna
have a big sigh of relief.
547
:If you do this, so whoever is writing
your grants, you need to tell them
548
:that this is something you can do.
549
:And then whoever is talking to
the bookkeeper, go tell them
550
:that this is something we need
to do so that we can make.
551
:These grants wonderful.
552
:Right?
553
:You know, all these applications
and all these reports that we
554
:gotta turn in as nonprofits, this
is crucial for saving time people.
555
:So do this
556
:Kelsey Gleason: crucial for saving time.
557
:Crucial for making sure you're
staying compliant, uh, and give that
558
:grant paperwork to your bookkeeper.
559
:Yes.
560
:So they can review it.
561
:Make sure they know exactly what's
allowed to be counted towards this grant.
562
:That help they can, they can help you
stay compliant and make sure that those
563
:transactions go against that grant report.
564
:Wendy Kidd: Absolutely.
565
:I love this.
566
:These are things that I think don't
get talked about enough, and it's just.
567
:Day-to-day operations, that makes
it so much easier for everyone.
568
:Kelsey Gleason: Yeah, and it's, and it's
definitely one of those things as someone,
569
:if you're a smaller organization, that
again, doesn't necessitate outsourcing,
570
:make sure that you're giving the person
who's doing the work, the support
571
:they need to utilize these tools.
572
:If you're paying for the software, use
the tools that it possesses to help
573
:make your life, the board's life, the
volunteer's life, So much easier.
574
:Wendy Kidd: Again, invest
in training for people.
575
:Yeah.
576
:Don't just send them to YouTube.
577
:Don't just send them to Google.
578
:Come on people.
579
:I'm looking at you.
580
:I'm looking at you.
581
:Make sure that you are giving
them the support they need
582
:by getting them training.
583
:Yeah, for sure.
584
:All right, so I'm gonna ask you one
last question because I think this
585
:is one that everybody wants to hear.
586
:Who, for people who aren't numbers
people, the nonprofit leaders that just
587
:don't, their numbers are not their gig.
588
:'cause I can't tell you how
many of 'em, they tell me that.
589
:What's one report or metric
you think that they should
590
:absolutely understand and monitor?
591
:Kelsey Gleason: So overhead expenses
yes, are almost always a, a relatively
592
:fixed expense for most operations.
593
:You want to know what that
bottom line number is?
594
:To keep the doors open on a monthly basis?
595
:Yes.
596
:Otherwise, how can you accurately
project how valuable those donations are?
597
:Yeah.
598
:You should know what your rent
costs, what your insurance costs,
599
:what your bookkeeper costs.
600
:You should have all of those, uh,
itemized and clear so that you know,
601
:okay, if we don't bring in at least
$10,000 in donations this month.
602
:We are operating the
red at the very least.
603
:Yes, yes.
604
:Um, so I, I think that's a, a
clear starting metric that's a
605
:great place for, any organization
or any business to start with.
606
:Absolutely.
607
:Wendy Kidd: It's, it's so crucial
for so many things because number
608
:one, it's the thing that they
least are likely to fundraise for.
609
:Mm-hmm.
610
:Because so many grants don't want
to pay for overhead expenses,
611
:which don't even get me started,
that's a whole nother podcast.
612
:But I think that it's also the
easiest trackable, and the easiest
613
:red flag that you will see in your
P&L reports because it's gonna be
614
:the first thing that gets changed
that they don't think you're gonna.
615
:Right, right.
616
:So if you don't have an explanation
for whoever made that change, this
617
:is your easy way to catch, Hey,
why did our rent go up by $200?
618
:Why did our payroll double last month?
619
:Right.
620
:Did we bring in some contractors
and we weren't aware of it?
621
:Did we go over like, what happened?
622
:You know, did I start a new
project and it required way more
623
:time than we ever thought it did.
624
:Do we need to streamline something?
625
:Is there a digital tool that could
make that easier and faster for
626
:us so we can pay $50 a month for
that tool versus $300 in labor?
627
:You know?
628
:Right.
629
:Like operating expenses are huge and
they just get overlooked so easily.
630
:Kelsey Gleason: They, they do.
631
:I I, I had a, a, a case one time
where we found that there was.
632
:That, uh, the organization had
been paying for a storage unit Yes.
633
:From many years back, but the
board had changed so much.
634
:Nobody had considered it.
635
:So when we went through and drilled
through overhead expenses and we
636
:saw it, we're like, what is this?
637
:I was like, I, I mean, I don't know.
638
:It's been the same expense for
the last, you know, five years.
639
:Wendy Kidd: They forgot
about their storage unit.
640
:Kelsey Gleason: They did.
641
:Wendy Kidd: Oh, poor babies.
642
:Kelsey Gleason: But it, it was an expense
they were paying for from an overhead
643
:perspective that they didn't need.
644
:Yeah,
645
:yeah.
646
:Now they were able to
resolve it, which is great.
647
:But, making sure you do that
health check every once in a while
648
:on what those overhead expenses.
649
:Uh, are, especially as you
have changes within the board,
650
:Wendy Kidd: if nothing else, do it
once a year when you do your budget.
651
:Yes.
652
:It's part of your budgeting process
to look at your operating expenses and
653
:see if you can change them in any way.
654
:Kelsey Gleason: Yes.
655
:Wendy Kidd: So, you know, and I, not
to say that you should absolutely
656
:go with the cheapest of whatever
the thing is, I'm not a fan of that.
657
:I believe in paying for
what things are worth.
658
:Right.
659
:But as a nonprofit, we all know
that price tends to drive us a lot.
660
:Yes.
661
:But look at that, those overhead
expenses at least once a year, if
662
:not more, but keep an eye out open.
663
:Keep an ear open for things that can
help with those operating expenses
664
:and make sure you're communicating
to your board members, right, and
665
:you're telling them, I'm gonna save
you money here, or I think we need to
666
:spend an extra $20 here or whatever.
667
:'cause we all know that you're
trying to get your budget approved
668
:once a year so you don't have to
go back for each little thing.
669
:Mm-hmm.
670
:But at least do it once a
year when you do that budget.
671
:Yes.
672
:So, yeah.
673
:All right.
674
:Was there anything else that
you would like to cover today?
675
:I, I think we hit all the
things we talked about.
676
:We did.
677
:Yeah.
678
:Okay, cool.
679
:Well, this was fabulous.
680
:I hope everyone gets as much
out of this as I did at least
681
:learn how to hire a bookkeeper.
682
:This is clearly, I did not, I
knew people were good for certain
683
:reasons, but I didn't know all
the reasons I should be looking.
684
:So thank you so much for
being here with us, Kelsey.
685
:Kelsey Gleason: Of course.
686
:Thank you so much for having me on.
687
:It was such a pleasure
speaking with you today.
688
:Wendy Kidd: Absolutely.
689
:All right, guys.
690
:Thanks so much.
691
:We'll see you next time.
692
:Thanks for listening
to The NonProfit Nook.
693
:We're building better nonprofits together.
694
:If you found today's episode
helpful, please subscribe, leave
695
:a review, and share it with other
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696
:Follow The NonProfit Nook on social
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697
:list for extra tips and updates.
698
:You can also visit The NonProfit Nook.com
699
:to see the show notes and leave a comment
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700
:Your feedback shapes the show.
701
:See you next time.