Maintaining accurate financial records and strategic oversight is fundamental for any non-profit organization. Without effective financial leadership, an organization can face significant operational risks and lose the confidence of its board and stakeholders. This case study examines how a non-profit foundation addressed a critical gap in its accounting function by engaging outsourced controller services.

Challenge

A non-profit foundation focused on providing health services and mission-related grants encountered a significant operational hurdle when its experienced in-house accountant retired. The responsibilities for bookkeeping were transferred to an existing employee who, despite their dedication, did not have a background in accounting.

This transition led to a substantial backlog in financial processing. With several months of transactions left unrecorded, the foundation’s leadership recognized that this internal arrangement was not a long-term solution. The lack of up-to-date financial data created uncertainty and posed a risk to both daily operations and the foundation’s ability to report to its Board of Directors.

Our Approach

To resolve the issue, the foundation partnered PBMares’ Outsourced Accounting team to provide professional controllership and bookkeeping services. The primary objective was to restore order to the financial records and establish a stable, ongoing accounting process.

The engagement was structured in three distinct phases:

  1. Financial Reconciliation: The initial step involved a comprehensive catch-up of all outstanding financial data. This required processing several months of transactions to bring the foundation’s financial statements and records to a current and accurate state.
  2. Process Implementation: Once the historical data was reconciled, we established a structured, regular month-end closing process. This created a predictable and reliable schedule for financial reporting, ensuring that the books would remain current moving forward.
  3. Process Optimization: With the foundational accounting work complete and stabilized, the focus shifted to improving the efficiency of the accounting processes. This involved a review of existing workflows to identify opportunities for enhancement.

Following the successful completion of these phases, the foundation chose to continue the engagement with the outsourced controller, forgoing the search for a new full-time in-house accountant.

Our Approach

The project presented two main obstacles that required careful management and expertise.

Obstacle 1: Incomplete Financial Information
The most immediate challenge was the lack of recorded data for several months. The departure of the previous accountant and the interim bookkeeper’s unfamiliarity with the transactions meant there was limited internal knowledge to draw upon.

Resolution: Our Outsourced Accounting team undertook a detailed review of the general ledger, analyzing nearly a year’s worth of transaction history to understand the foundation’s financial activities. To reconstruct the missing revenue data, we meticulously cross-referenced bank statements with all available client documentation. Fortunately, the foundation was already using a bill payment system for expenses, which provided a clear record of outgoing funds.

Obstacle 2: Board of Directors’ Expectations
The foundation’s Board of Directors required a swift resolution to the accounting backlog. This placed considerable pressure on the leadership team and created a tense environment at the start of the engagement.

Resolution: As our team systematically brought the financial records up to date, the foundation’s leadership and Board began to see tangible progress. This built trust in the process and in the capabilities of the outsourced controller. The subsequent optimization of accounting workflows further solidified this relationship, as the Board recognized the value of the improved systems and the reliability of the financial data presented.

Results

By partnering with an Outsourced Accounting service, the foundation realized several important benefits that addressed its initial challenges and provided long-term value:

  • Continuity of Operations: The foundation avoided the lengthy and costly process of recruiting, hiring, and training a new in-house accountant, ensuring financial operations continued without interruption.
  • Enhanced Efficiency and Insight: The optimization of accounting systems led to more efficient workflows and provided new insights into the foundation’s financial health.
  • Increased Board Confidence: With accurate and timely financial statements, the Board of Directors gained renewed confidence in the organization’s financial stewardship.
  • Access to Specialized Systems: The foundation benefited from access to a suite of established financial information systems for accounts payable, accounting, and expense management, without needing to procure and implement them independently.

Learn More

Explore how PBMares can support your nonprofit organization with outsourced accounting and financial services. Contact us today to learn more.