How LDB accountants bring value to the not-for-profit (NFP) sector
Not-for-profit (NFP) organisations are a central part of Australian life and Australians love to support them, not only indirectly, but by participating within them and actively contributing to their communities.
While they exist for social purpose, rather than financial gain, management of finances and good governance is still crucial.
Best-practice management of the finance function allows an NFP to run smoothly, achieve its goals and ensure optimum and careful use of public donations and grant money.
This can be a tricky task for organisations that are tightly resourced, often volunteer-run, and incredibly busy. Here’s how LDB can support non-profits:
Services tailored to the NFP sector
LDB Group works closely with a variety of NFP organisations to help them navigate all aspects of financial management.
LDB’s Accounting Principal Daniel Dubois states that the firm has developed expert services, tailored to meet the specific needs of NFPs, as well as the regulations they operate under.
“We understand that generally not-for-profit groups are run by passionate people who may not have business training,” he articulated.
“Many are volunteers and, for the most part, their skill sets are usually focused on their social purpose rather than financial processes or accounting programs.”
“We can be that necessary support, freeing decision makers within organisations to get on with their essential service.”
That support comes in many forms, from setting up entities through to independent support for the board.
LDB can also act as an outsourced CFO (chief financial officer) at an affordable cost who pull it all together for groups who may not be in a position to afford a CFO.
Staying accountable and transparent
Regular audits may not only be required by an organisation’s constitution, or by law, but are also the surest way to ensure open, transparent use of money and good financial management.
“At LDB, we offer more than assurance that your obligations are being met through our auditing services,” said Nicky Postan, LDB’s Audit Principal.
“Should we identify any areas that could be improved, we actively help address them and develop processes and procedures that improve performance and mitigate risk.”
Backup for boards
LDB has wide experience working with boards of non-profits, helping to break down their specific needs to identify short and long-term goals.
“Included in the identification of these goals should be the creation of a risk register identifying risks from extreme impact on the entity to low impact on the entity, thereby clearly identifying risks and how to mitigate these,” Ms Postan said.
LDB’s independent financial expertise can:
- Review monthly or quarterly financial reports along with annual financial statements
- Develop reporting mechanisms and dashboards.
- Evaluate funding and grant proposals
- Develop fraud mitigation strategies
- Assist in the development of a risk register.
Mr Dubois notes that NFP boards are comprised of dedicated, busy people trying to make a difference in their communities.
“However, they may not be financially literate. What we do is provide that expertise and assurance that the board and executive can be held accountable,” he said.
And the assistance from LDB is not simply intervention, but rather an educational experience.
“We seek to develop the financial, corporate governance and related knowledge of all stakeholders involved. We also provide an interface between the executive and other stakeholders,” Mr Dubois said.
Easing the accounting burden
LDB can tailor assistance to the needs of the organisation, including but not limited to preparing profit and loss and cashflow modelling, reviewing feasibility studies, evaluating costs, and preparing a business plan.
“For obvious reasons, many non-profits don’t spend big on administration. LDB can provide effective additional support to ease the burden of accounting,” Mr Dubois said.
- Setting up and providing support for online accounting systems (e.g. MYOB, Xero, QuickBooks)
- Reviewing accounts for alignment with key metrics and board reporting needs
- Guidance on current standards
- Preparing periodic management accounts and annual financial statements
- Cashflow management guidance and oversight
- Preparing annual operating and cashflow budgets
- GST compliance assistance.
Helping NFPs with tricky tax laws
Like every organisation, not-for-profits must negotiate tax laws, but need to do so with regard to their charitable status.
The ever-changing tax rules for NFPs make it a daunting challenge for boards, including understanding which tax concessions a non-profit organisation is entitled to. LDB’s experts are equipped to guide an NFP through this terrain.
Corporate governance and treasury support are also aspects of running an NFP that LDB will tailor solutions for.
“As LDB has worked with a number of not-for-profits, we understand the diverse and unique needs of these types of organisations,” Mr Dubois said.
“A not-for-profit should see us as an outsourced CFO – someone to back up the committee with expertise and with an educational approach.”
Speak to the tax, audit and business advisory experts at LDB
If your not-for-profit (NFP) organisation needs any assistance when it comes to tax, finance and business advice, give our expert team a call on (03) 9875 2900 or complete the contact form below and we’ll be in touch.