Automating your Business Functions

2020 has been a relentless year of change so far for businesses across all industries. The abrupt “pause” in March experienced by New York businesses was rather disruptive, as no one expected a once in a century pandemic to shutdown day-to-day life not just locally but globally. This caused many nonprofit organizations that were not prepared to handle business virtually scrambling to try to implement systems and new technologies on the fly, while still trying to deliver some semblance of service to those in need. While the pandemic has been devastating, it did provide somewhat of a wake-up call to nonprofits to innovate, automate, collaborate and move into the 21st century by embracing new techniques to work remotely, rethink their service delivery, switch fundraising to virtual platforms and consider new technologies for communication and back-office functionality. Nonprofit organization historically have been behind the times with respect to technology, so in many respects, they have had a harder time automating their systems.

One of the most effective ways to create operating efficiencies is by automating your day-to-day business functions. This may sound intimidating, especially for traditional nonprofits that have operated the same way for what seems like forever, but it does not have to be. The main point is automation does not need to be, nor should be, complicated to be effective. Complicated systems require more maintenance, more staff training, and more manpower to run. This could result in more breakdowns which can discourage and un-motivate you and your team to continue to explore automation, or in the loss of abilities if turnover occurs. Start simple and build momentum. This will naturally begin creating a culture within your nonprofit that embraces increased automation. Small milestones and successes in the beginning will snowball and become infectious among team members.

So where do you start? Effective brainstorming and identifying areas where automation may be most beneficial. First identify your major business functions/cycles such as service delivery, payroll, sales/revenue, accounts payable cycle, reporting, information tracking, communications, fundraising, marketing, etc. Carefully look at each step in the functions/cycles you identified and look for problems or breakdowns that are occurring. For instance: Is there repetition in any of these areas that can be eliminated? Are there very labor-intensive components that can be streamlined? Is key decision-making information not available or not appropriately tracked? Is information not readily available to staff working off-site? Make sure that when you hold your brainstorming sessions, all stakeholders are present. Too often we see brainstorming sessions not include lower level staff that are in the trenches who can be invaluable in pointing out where potential problems might be.

Ultimately, your goal is to see where you can automate in each system. Here are some ideas in three of the core fiscal systems.

Payroll

Times have changed. The old punch in and out systems have been replaced with new technology and mobile solutions where employees can be geo-fenced to clock in and out directly from their own device within a certain geographical area (this is very important for employees that do not report to a centralized office every day). For additional security, a physical unit such as a bio-metric system, where a simple palm print, fingerprint, or even a retinal scan, can be used to identify employees and ensure no one is clocking in and out of your business for someone else. Time management systems are more sophisticated these days to break down information by department, by employee job codes (if employee has multiple job titles), and are even able to handle PTO requests. Many times, this information is being tracked using spreadsheets, which are not only susceptible to human error but also add additional time and energy to ensure it is accurate. Time management systems can now be set up to handle all this information where employees can request their PTO in a single place, an automatic notification is sent to their direct supervisor, in real time, requiring review and approval, and it is then logged and tracked. This is a huge time saver as the whole process is now in a single location, no paperwork to worry about, and it is stored in a central location. In addition, many time management systems can be integrated with most payroll providers so that all information can be transferred directly to payroll records, resulting in a much more streamlined payroll process. Furthermore, most payroll providers can integrate directly with various accounting systems allowing for a seamless recordkeeping and recording of payroll. These are only some of the many examples of how the payroll process can be automated to save your organization time and money and increase overall accuracy.

Revenue

Organizations can vary greatly as to the type and number of revenue transactions that are booked into their accounting records; however, they all need to insure that these transactions are properly recorded in such a way as to supply management the information necessary to make appropriate operational decisions and to ensure that proper information is available for appropriate financial reporting. Most nonprofit accounting software has the ability to track this information, but often it takes extra staff time to do so. What if you were now able to automate that process, importing the information directly from your service delivery, fundraising, or billing software into your accounting system, resulting in a shorter close out period and better data with which to perform financial analysis. As most billing migrates from paper to paperless billing portals, it is likely that the billing system is able to generate a useful report that can be formatted to feed either directly or via a bridge into your accounting system. This may sound complicated, but there are many consultants out there that can create interfaces for different applications that will allow them to seamlessly push information from your front-end software to your accounting software. Streamlining tasks like this can increase the analyses that can be performed, giving management more insight to make timely decisions based upon more meaningful and up-to-date data.

Accounts Payable

Tired of opening mail/e-mail, sorting what is junk and what is necessary, then having to go through the process of entering invoices into your accounting software? Some organizations take weeks to process accounts payable as they need to perform a myriad of checks and balances (e.g. Were the goods ordered received? What department should the expense be charged to? Etc.). This is another prime area for automation. Cloud-based resources exist whereby vendors can email their invoices to the cloud-based resource which will identify the invoice and record all the important information and then send an automatic notification to your payables administrator that invoices are ready for review and approval. Sound like fantasy? Resources such as Bill.com and Certify AP, to name a couple, do exactly that. Once you begin processing your AP through these resources, the system can automatically identify the types of purchases you are making from a vendor, code them to the appropriate GL account, and generate a periodic report that you can import directly into your accounting software. Think about the efficiencies that can be created by being able to validate transactions electronically and then automatically have them post within your accounting records.

The functions/cycles and automation ideas that were presented are only a few of the many ways that technology and automation solutions can streamline your organization. As unique as your organization is, so too are the resources that are out there to help you. By investing the time and money into brainstorming, identifying, and training, you will be able to create quicker, more cost-effective, and more accurate information than you currently have. Take your time and consider seeking outsourced assistance in coming up with an effective plan for automating your business functions/cycles. An outsider perspective can lend fresh ideas, focus, and knowledge to your internal team. Remember, start simple and build upon the ideas, complicated systems will lead to discouragement and breakdown. Also, research affordable solutions and technologies that may be out there at a discount for nonprofits from places like techsoup.org and make sure you align yourself with the right technology partners and solutions.

Written By Albert Borghese, CPA
Manager at Cerini and Associates

Albert is a member of Cerini & Associates’ audit and consulting practice where he focuses on serving the firm’s special education and nonprofit clients. Albert is also involved in the marketing and development of the firm, and frequently participates in recruiting efforts, and research.