The top 5 financial management risks for not-for-profits
Published: April 25, 2019
Updated: April 26, 2023
Financial management is of critical importance for not-for-profit boards―ambitions to fulfil important mandates can be limitless, while resources are not.
There are five financial management risks not-for-profit boards especially need to consider:
The lack of segregation of duties in many not-for profits makes fraud and theft possible, maybe even probable! What internal controls―risk management―exist in your organization? Do your board members have strong financial literacy and operational savvy? BDO offers checks and balances―helping reduce risk from segregation issues.
Payroll and GST/HST rules for not-for-profits are complex. What is the level of expertise of the person filing your payroll tax? Has your organization had a GST/HST risk assessment? BDO Cloud Accounting can connect you with in-house tax specialists and HR professionals who can help your board meet regulatory requirements―and avoid personal liability for inaccurate or late tax filings.
Does your board get accurate monthly statements to track expenditures against budget? Does your board have enough in the operating fund to protect restricted donations? Is your board able to innovate on delivery of your core mission and strategy―or is it pulled down by day-to day operations and by unstable funding? BDO Cloud Accounting is trusted, accurate, and cloud-based—so you can blue sky and fly to new heights as an organization.
Inaccurate bookkeeping costs not-for-profit boards. It costs in audits that take longer. It costs in lost opportunities to make a difference. BDO Cloud Accounting often costs less than a part-time bookkeeper―and it saves your organization the cost of tangible and intangible expenses associated with errors and omissions.
Not-for-profits should be driven by core missions and values―making financial decisions without keeping your organization’s key initiatives and purpose front-and-centre can put you on a collision course. Spending outside your mandate could cause you to lose your ‘license’ to operate―your charitable or not-for-profit status could be revoked. Keep your focus: BDO Cloud Accounting offers an accurate dashboard to guide spending decisions, so you can have an eye on where you want to go.
Contact BDO to learn more about our not-for-profit services