How online accounting drives nonprofit growth

Summary:

• Established in 2011, Xcelerate is a cloud-based accounting firm specializing in churches and nonprofits.
• South Fellowship Church needed an accounting strategy to match their future growth.
• Xcelerate leveraged QuickBooks Online Advanced to help South Fellowship Church eliminate inefficiencies, prepare for audits, and communicate with stakeholders.

In 2018, South Fellowship Church in Littleton, Colorado, faced an accounting setback. Larry Boatright, the church’s executive pastor, received a phone call from his accountant bearing bad news: he was leaving to pursue a different opportunity.

Larry had no choice but to assume the church’s bookkeeping duties on top of his pastoral and educational responsibilities. But he knew this would not be sustainable. Searching for answers, Larry hopped on a video meeting with Xcelerate Business Solutions, a cloud-based accounting firm that specializes in working with churches and nonprofit organizations across the country.

Larry was wowed right off the bat. Within six months, Xcelerate showed Larry and the rest of his organization that there was a better way to operate South Fellowship Church—and it started with QuickBooks Online Advanced.

Nonprofits have unique accounting needs

Nonprofit accounting isn’t compatible with plug-and-play tactics. Each organization has nuances that go beyond traditional revenue- and sales-oriented accounting. Here are just a few of the factors that make nonprofit accounting unique:

• Most staff members are either part-time employees or volunteers.
• All donations—whether $1 or $1 million—must be meticulously tracked.
• Yearly audits require the books to be above reproach.
• Shoestring budgets offer minimal, if any, leeway.
• Board members request explanations for how every dollar is spent.

Nonprofits, especially churches , need an accounting strategy that not only keeps the organization in the black but also aligns with their growth strategy. “Churches typically operate in survival mode: paycheck to paycheck,” says Jessica Daley, Xcelerate’s CFO. “Our job is to seamlessly integrate bookkeeping and strategy.”

One of the most vital aspects of nonprofit accounting, where bookkeeping and strategy intersect, is often the most crucial: audits.

No more sleepless nights over audits

Audits can bolster the reputation of a nonprofit and protect its personnel from malpractice—but they can also be a source of stress for everyone involved.

“Many churches and nonprofits dread audits because they’re concerned they might not be able to provide every piece of information that’s going to be requested,” says Adrienne Weir, one of Xcelerate’s co-founders.

However, with QuickBooks Online Advanced , Xcelerate improved South Fellowship’s auditing process. When auditors requested specific documents, the church staff used to scramble to track down paperwork. Now QuickBooks Online Advanced keeps every document in one place for easy, organized access.

“By the time we get to the audit, the firm looks at our books and says, ‘This all looks great.’” says Larry. “I don’t lose sleep over audits anymore.”

Throughout the year, Xcelerate also coaches Larry and the rest of the church staff on how to manage their finances and leverage features in QuickBooks Online Advanced. That way, nobody is unprepared when audit season comes around. That’s not the only way Xcelerate keeps South Fellowship Church ahead of the curve.

Using data to tell visual stories to multiple stakeholders

Nonprofit leaders face all types of challenging questions: Do I have enough volunteers? Will my congregation maintain their donations? Are we growing too fast or not fast enough?

Having a system in place to contextualize and form a narrative around data is crucial. Otherwise, numbers can cause more confusion than clarity. Unfortunately, South Fellowship Church learned that the hard way.

“In the past, we relied on Excel spreadsheets to organize our metrics,” says Larry. “But when we tried to present that to board members, their eyes would glaze over—I could physically see them disengage.”

When Xcelerate collaborated with South Fellowship Church, Jessica knew her team could help Larry explain the financial status of the church in a clear snapshot that was simple yet informative. One of the tools Xcelerate used to accomplish that was the cash flow dashboard in QuickBooks Online Advanced.

Cash flow can make or break a nonprofit. It’s also one of the most difficult reports to pull as an accountant because it blends multiple data sets. “You can’t accurately show what’s happening with cash on a profit and loss report or a balance sheet alone,” says Adrienne.

The cash flow dashboard equipped South Fellowship Church with real-time visual interpretations of their data to show how much money was going in and out at any given time. For example, Xcelerate spotted a dip in cash leading up to Christmas, prompting the church to act immediately to stay on track.

“Getting an accurate look in real-time at cash flow doesn’t just give me peace of mind,” says Larry. “It helps our church make evidence-based predictions.”

Moreover, the revenue streams dashboard provided additional clarity by enabling South Fellowship Church to see all of its revenue streams at a granular level in one place: donations, coffee shop sales, and preschool tuition.

“Before we used the revenue streams dashboard, we would send Larry a basic report with the income that came in for the month,” says Adrienne. “Now we send him an easy to view, easy to manipulate dashboard; so he can see not only the total income, but how it’s broken down by event, ministry, or donors.”

South Fellowship Church is accountable to several groups of individuals, all of which need different reports:

• Quarterly reports for board members
• Spending reports for ministry leaders
• Annual reports for the congregation

In the past, gathering the data for these reports took a lot of time. Fortunately, smart reporting consolidates everything into a sleek document that’s easily digested without sifting through columns of data.

All of these features enable South Fellowship Church to make data actionable rather than relying on guesswork and scattered spreadsheets. “QuickBooks Online Advanced takes accounting to the next level because it tells stories that users naturally want and need to see,” says Adrienne.

Providing the right information to the right people

Between staff, volunteers, and auditors, there are dozens of people within the South Fellowship Church’s network who need data to do their jobs. Rather than granting everyone access to the same information, Xcelerate utilizes custom roles in QuickBooks Online Advanced to clearly define who has access to specific data.

“Previously, we would administer one set of login credentials and employees might have been able to see what payroll is for certain staff members, and we didn’t want that,” says Larry.

Instead of locking users into static permissions, custom roles adapt to the needs of the organization, so each team member has access only to the information they need to do their job effectively. In addition, custom roles let South Fellowship Church delegate and manage up to 25 users, so the organization can grow while remaining flexible.

“Custom roles with QuickBooks Online Advanced is a game-changer. Segregating duties allows our team to work smarter, while also protecting the integrity of our data.”

Integrating accounting and strategy to produce growth

Whether for-profit or nonprofit, every organization aims to grow. But growth without an accounting strategy is a recipe for chaos. Fortunately, Xcelerate and South Fellowship Church teamed up to leverage QuickBooks Online Advanced in a way that complements their future plans. For instance, customers receive comprehensive account management that includes premium technical support, online training, and a dedicated account manager.

“I have complete confidence that South Fellowship Church can grow immensely with QuickBooks Online Advanced,” says Jessica. “Much of that is due to the wide array of features available on the platform.”

Larry shares a similar sentiment: “The thing I love about QuickBooks Online Advanced is that it can scale with us. With the tools we have at our fingertips, I can look down the road and see us achieving significant growth without stretching ourselves thin.”