What is non-profit accounting?Nonprofit
Non-profit organizations do a lot of good for those who need the most help in society, but they are sometimes targeted by people who are engaged in fraud and embezzlement schemes. Some non-profit leaders believe that they are immune from this type of activity, but the unfortunate fact is that they are targeted just like any other type of business. It is important for non-profit companies to take steps to reduce the risk of fraud. Having strong non-profit accounting practices in place may help to catch fraud early and to stop it before it can cause significant harm.
What is non-profit accounting?
The non-profit accounting sector keeps meticulous records of all funds that come in as well as all expenses that go out. Everything must be documented and recorded thoroughly and entered into the company’s accounting programs. Non-profit organizations are subject to regular audits, and it is important for their books to be in tiptop shape. Companies that receive government funds may need to take additional steps to show how the money is spent. Some non-profits outsource their accounting needs to third parties in the non-profit accounting sector while others handle their own accounting with internal accounting departments.
How can expense management software help non-profits save more money?
Some non-profit agencies may lag behind in embracing technology and use outdated accounting systems that include such things as reimbursement requests and approvals, petty cash systems and doing the books by hand. These methods leave substantial room for errors and for fraud. Non-profits should instead consider automating their accounting practices as much as possible by choosing a good expense management software program.
Expense management software can help to reduce the time that people in your company must spend entering and documenting information. The software may be integrated with such things as your non-profit credit or debit cards so that the transactions appear automatically in the non-profit accounting software. This is important for identifying non-profit fraud. When a non-profit has strong internal controls in place, fraud can be lessened or prevented.
Expense management software may be one tool that might help to discover internal accounting fraud such as a case in which a bookkeeper wrote counterfeit checks to herself for $100,000. In addition to the expense management software, reconciling the accounts with the books every month and having multiple people responsible for maintaining the books can help to prevent such schemes from occurring.
Where can a non-profit accounting department look for expense tracking and management solutions?
Having strong non-profit accounting and expense management practices in place is vital for non-profits to help to protect them from waste and fraud. In addition to good internal controls and expense management software, non-profits may benefit by switching from paper-based systems to paperless methods such as credit cards or debit cards. One of the problems with accounting for non-profit organizations when they use credit cards, is that they may be difficult for them to obtain one if they do not have substantial credit histories.
Business Visa debit cards for non-profits from Bento for Business might be a better option. The cards do not require credit approvals and do not charge interest on the balances. They also come with strong built-in controls, allowing your organization to restrict the types of spending that can be completed with each card. Choosing business debit cards can allow your organization to get rid of check writing and reimbursement processes so that you can prevent theft. Please call us at 866.220.8455 to find out more or signup for our free 60 day trial.