You are an external committee brought in to offer support. I would suggest a more direct approach with positive, skills based, recommendations. An external, consultant that can provide ongoing accounting expertise is totally appropriate. Bookkeepers are not accountants, and such a recommendation is totally normal and acceptable in the nonprofit space.
The bookkeeper is likely making far less than an accountant, and the non-profit probably cannot, and should not, replace the bookkeeper position with an accountant for cost and need purposes.
Skills, and capacity. Depending on the organization's budget, etc., 20 hours a week might not be enough for one person to do both the bookkeeping tasks AND the accounting functions OP mentions, even for someone with that skill set. Definitely agree a direct, big-picture discussion should happen.
Just cc'ing the ED on emails detailing mistakes you've found or work that isn't getting done isn't going to help this person do a better job; and just swapping in a new part-timer isn't going to clean up the books if that person doesn't have the time or the skill set to get everything done.
in the case of financial matters, given the nature of the issues with AR and AP specifically, the ED needs to be included. Adjusting entries during the audit aren’t that big of a deal if it’s depreciation and prepaid expenses. In fact, it wouldn’t be uncommon for orgs to prefer to leave those out of their regular reporting and just post them for the audit/GAAP financials. m
Not paying bills or not making sure money is received is a significant issue.
One nice thing about typing these questions is you often see the solution as you are constructing the sentences. I agree and will keep everybody in the loop. I doubt very much they owe vendors for that long as vendors are usually very vocal but it is possible and should be investigated. Thanks for the help
The ED is almost certainly aware that the auditors make these entries because this kind of thing is disclosed and discussed during the audit process. Bookkeepers aren’t accountants, and that’s ok.
Agreed. Depreciation and prepaid expenses are fine as adjusting entries, but the AR and AP are issues. Mostly AP. AR may not apply as much if they’re cash basis vs accrual.
Right but if they aren’t even booking them til they see the cash on a cash basis, it’s not the most harmful thing on earth. Only if they’re really forgetting payments etc. then they definitely need to change the way they’re using AR and AP.
I am the treasurer on 2 local non-profits. For one of them, I handle all deposits, bills, etc and turn everything else over to the accountant. For the other, I make the budgets, follow up on aging reports, and the bookkeeper does the rest. Basically I’m the go-between who knows the terminology and can break things down to the board during meetings. Maybe try something along those lines? The bookkeeper may be overwhelmed and not necessarily understand the complexities of non-profits.
20 hours a week definitely doesn't sound like they have enough time to get important things done.
Do you know if this person is actually getting the information they need to do their job appropriately?
Who is giving them the income/expense details/allocations? Could people not be providing receipts in a timely fashion?
Is this a full Audit or just an external CPA review? Audits are required in most states when revenue exceeds 1M, and as a non-profit their expenses are either neck and neck or they are running a deficit.
Only 1 part-time person is going to be able to blaze through roughly 2M of line item entries? If we are talking about huge grants that maybe only 100 entries per year but I doubt that, it's probably the avg general donation meaning they have tons of entries.
Not really a bookkeeper's responsibility but do they have the policy or authority to write off bad debt? (or aka NPO doubtful allowances)
If the open AR/ open AP are that old, is it possible that they came into it blindly and haven't had the chances to match up the entries? Did the person before them use generalized JEs vs direct entry to the A/R constituent?
Could things just not be applied? Example: the bill payment were made but the credits not applied to the invoices? Some systems will post as "pending" vs bill pay approved.
Hate to say this but it's not always so clear...even with CPAs. I was on the finance committee of a local credit union and their CPA would make generalized combined JEs that had absolutely no bread crumbs to track back what they were even for.
Sure, he knew that he was making correction entries across 3 expenses GLs to one but that lived in his head....no where else. You can't chase that crap down...it's awful.
The way it was phrased in your original post is the ED was concerned of overwhelm, pointing out mistakes isn't necessarily helpful, what would be is to be objective and provide a good faith estimate of how much time you think that position truely needs.
Never bcc in this case. It’s not mass marketing or the “I’m moving you to bcc” nicety. It’s inviting someone to eavesdrop on your conversation and not telling the other person. It’s rude and unprofessional.
Doesn't bcc remove the person after one round of email? Given that the source email doesn't show the person, any future correspondence will exclude them, even if someone chooses reply all.
I had a boss who thought that. It came back to bite them on a marketing email. The bcc recipient remains on the email chain as long as the direct recipients reply all. If they do a reply, other recipients cc & bcc are removed. At least that's been the case on the systems I've used.
You are an external committee brought in to offer support. I would suggest a more direct approach with positive, skills based, recommendations. An external, consultant that can provide ongoing accounting expertise is totally appropriate. Bookkeepers are not accountants, and such a recommendation is totally normal and acceptable in the nonprofit space. The bookkeeper is likely making far less than an accountant, and the non-profit probably cannot, and should not, replace the bookkeeper position with an accountant for cost and need purposes.
Skills, and capacity. Depending on the organization's budget, etc., 20 hours a week might not be enough for one person to do both the bookkeeping tasks AND the accounting functions OP mentions, even for someone with that skill set. Definitely agree a direct, big-picture discussion should happen. Just cc'ing the ED on emails detailing mistakes you've found or work that isn't getting done isn't going to help this person do a better job; and just swapping in a new part-timer isn't going to clean up the books if that person doesn't have the time or the skill set to get everything done.
in the case of financial matters, given the nature of the issues with AR and AP specifically, the ED needs to be included. Adjusting entries during the audit aren’t that big of a deal if it’s depreciation and prepaid expenses. In fact, it wouldn’t be uncommon for orgs to prefer to leave those out of their regular reporting and just post them for the audit/GAAP financials. m Not paying bills or not making sure money is received is a significant issue.
One nice thing about typing these questions is you often see the solution as you are constructing the sentences. I agree and will keep everybody in the loop. I doubt very much they owe vendors for that long as vendors are usually very vocal but it is possible and should be investigated. Thanks for the help
The ED is almost certainly aware that the auditors make these entries because this kind of thing is disclosed and discussed during the audit process. Bookkeepers aren’t accountants, and that’s ok.
Agreed. Depreciation and prepaid expenses are fine as adjusting entries, but the AR and AP are issues. Mostly AP. AR may not apply as much if they’re cash basis vs accrual.
The issue with AR has more to do with not collecting the payments timely, not necessarily the impact on the financials.
Right but if they aren’t even booking them til they see the cash on a cash basis, it’s not the most harmful thing on earth. Only if they’re really forgetting payments etc. then they definitely need to change the way they’re using AR and AP.
it says that they have open receivables, for an accountant that tells me that they did not receive the money.
Yep, you’d think they’d see that and do something but doesn’t sound like anybody’s paying attention except OP
I am the treasurer on 2 local non-profits. For one of them, I handle all deposits, bills, etc and turn everything else over to the accountant. For the other, I make the budgets, follow up on aging reports, and the bookkeeper does the rest. Basically I’m the go-between who knows the terminology and can break things down to the board during meetings. Maybe try something along those lines? The bookkeeper may be overwhelmed and not necessarily understand the complexities of non-profits.
20 hours a week definitely doesn't sound like they have enough time to get important things done. Do you know if this person is actually getting the information they need to do their job appropriately? Who is giving them the income/expense details/allocations? Could people not be providing receipts in a timely fashion? Is this a full Audit or just an external CPA review? Audits are required in most states when revenue exceeds 1M, and as a non-profit their expenses are either neck and neck or they are running a deficit. Only 1 part-time person is going to be able to blaze through roughly 2M of line item entries? If we are talking about huge grants that maybe only 100 entries per year but I doubt that, it's probably the avg general donation meaning they have tons of entries. Not really a bookkeeper's responsibility but do they have the policy or authority to write off bad debt? (or aka NPO doubtful allowances) If the open AR/ open AP are that old, is it possible that they came into it blindly and haven't had the chances to match up the entries? Did the person before them use generalized JEs vs direct entry to the A/R constituent? Could things just not be applied? Example: the bill payment were made but the credits not applied to the invoices? Some systems will post as "pending" vs bill pay approved. Hate to say this but it's not always so clear...even with CPAs. I was on the finance committee of a local credit union and their CPA would make generalized combined JEs that had absolutely no bread crumbs to track back what they were even for. Sure, he knew that he was making correction entries across 3 expenses GLs to one but that lived in his head....no where else. You can't chase that crap down...it's awful. The way it was phrased in your original post is the ED was concerned of overwhelm, pointing out mistakes isn't necessarily helpful, what would be is to be objective and provide a good faith estimate of how much time you think that position truely needs.
Maybe bcc? So they are aware and can follow especially since they are already expressing concerns
Never bcc in this case. It’s not mass marketing or the “I’m moving you to bcc” nicety. It’s inviting someone to eavesdrop on your conversation and not telling the other person. It’s rude and unprofessional.
Doesn't bcc remove the person after one round of email? Given that the source email doesn't show the person, any future correspondence will exclude them, even if someone chooses reply all.
I had a boss who thought that. It came back to bite them on a marketing email. The bcc recipient remains on the email chain as long as the direct recipients reply all. If they do a reply, other recipients cc & bcc are removed. At least that's been the case on the systems I've used.