With sources of revenue declining and costs increasing, it is important for nonprofits to have effective financial procedures in place to safeguard the organization’s cash. Documenting and assessing your finance operations formally can identify issues your organization is experiencing and those that have not yet been detected.
To protect the organization’s cash, financial procedures should include:
- Efficient, streamlined workflow
- Effective internal controls
- Timely monitoring and reconciling bank account activity
- Safeguarding physical cash
5 Questions Your Organization Should Consider
Bank Reconciliations
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Are monthly bank reconciliations performed and approved in a timely manner?
Monthly bank reconciliations performed in a timely manner can identify unauthorized or fraudulent activity that needs to be corrected immediately. Reconciliations should be reviewed and approved by an individual other than the one performing the reconciliations.
Cash Disbursements
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Is organizational spending properly reviewed and approved?
All organizational spending should have supervisory review and approval to ensure that the organization’s funds are used only for valid business purposes in accordance with its mission.
Business Credit Cards
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Is there a Credit Card Policy for your organization’s credit card program?
An effective credit card policy ensures that only authorized staff receive credit cards and the cards are used only for business expenses that are properly documented and approved.
Physical Cash
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Is physical cash received properly secured and accounted for?
Cash received should be kept in a safe with access given only to authorized personnel. The cash, along with a proper accounting, should be sent to the finance department for deposit and recording in the financial records.
Cash Receipts
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Are there effective checks and balances for the receipt of the organization’s funds?
Having separate staff responsible for the receipt and processing of funds and for recording the funds in the financial records creates effective internal controls that safeguard the organization’s cash.
Roberta Katz Consulting is working with many nonprofits to implement efficient and effective operating procedures and policies to ensure the ongoing operation of their finance departments. Schedule a complimentary consultation to discuss how I can provide your organization with an impartial evaluation of your finance department.
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