Closing the Books Faster: Streamline Your Nonprofit's Monthly Close

Working in nonprofit accounting means taking responsibility for the monthly close process, where all accounts and transactions are carefully documented, balanced and reconciled.

Although the monthly close is undeniably important for any nonprofit, the reality is that it can also be quite time-consuming for accounting and bookkeeping team members.

The amount of time spent completing the close process each month can take away resources from other important tasks, which is why many nonprofits are exploring ways to expedite the process without sacrificing accuracy.

The Importance of Accurate and Timely Close Processes

There are many reasons as to why a quick and accurate closing process is so important to a nonprofit organization. For starters, accurate closing is essential because it sets the nonprofit up for greater financial success in the weeks and months ahead. When the closing process is handled properly, nonprofit leaders can gain a true understanding of the organization's finances and where they stand, which can influence decision-making down the road.

On the other hand, when the closing process takes too long, it can take away valuable resources that should be used on other tasks or projects. This, in turn, can have a negative impact on operations.

In a perfect world, nonprofit organizations would have the ability to complete their monthly close as efficiently as possible without sacrificing the accuracy of their work in the process. So, how can this be realistically done?

Ways to Optimize the Monthly Close Process

There are a few strategies and best practices that nonprofit organizations can implement as a means of optimizing the monthly close process.

1. Streamline Reconciliation Between Departments

First, for nonprofits that operate across many different departments, one of the main challenges is often reconciling financial information between these departments. This can be especially challenging in organizations where there is no set procedure for sharing this data.

Nonprofits looking to streamline the close process, then, should set up a universal procedure for sharing financial data before the end of the month. This system should include details on the exact information needed and monthly deadlines to send this information to the accounting team. This, in turn, can save accountants time and hassle trying to reconcile information between departments before the month's end.

2. Take Advantage of Data-Syncing Integrations

These days, there are so many innovations and technologies that help to streamline operations and make all aspects of running a nonprofit more efficient. This remains true when it comes to integrations for syncing data and saving accountants time in the monthly closing process.

Consider, for example, software that can effectively and automatically integrate a nonprofit’s financial data to a general ledger platform. This kind of application can save accountants the time and hassle of moving data manually while reducing the risk of human error. All of this leads to faster and more accurate reconciliation of financial data, as well as a faster closing process.

3. Automate Repetitive Manual Tasks

Last but not least, nonprofits looking to streamline their monthly close process can benefit from automating accounting and bookkeeping tasks that are otherwise manual and time-consuming. For example, while operating a monthly close off of an Excel checklist may “work” for now, switching to a tool that will automate the checklist could save precious time while freeing up resources for other work.

There are many aspects of the closing process that can be automated by the innovative technology and software that's out there today.

Nonprofit leaders may consider outsourcing accounting tasks to providers that cater to their specific operational requirements, helping them identify and implement tools that streamline the monthly close process effectively.

Consult with an Accounting Professional

Handling the monthly close within a nonprofit can be a busy and stressful task for any accountant or bookkeeper. The good news, of course, is that there are plenty of strategies that can help to expedite the process without sacrificing accuracy in the process.

From automating repetitive tasks to streamlining reconciliation between departments, nonprofits are encouraged to make some small operational changes now to reap the benefits in the future.

By consulting with an advisor who works specifically with nonprofits, the possibilities for improving the organization's bottom line and enhancing operations are nearly endless.

To learn more about LGT and how we can serve you, contact us here.