<![CDATA[ - Blog- Nonprofits]]>Sat, 24 Jun 2017 22:12:13 -0800Weebly<![CDATA[Nonprofit Organization-- Basic Operational Areas]]>Mon, 24 Apr 2017 00:29:21 GMThttp://webshanker.com/1/post/2017/04/nonprofit-organization-basic-operational-areas.htmlAre you starting or organizing your nonprofit?  Any business needs a setup to operate effectively, and nonprofits are no different. A basic organization may be a no-brainer for some people, but may not be that obvious many as well. 

As in any business sector, there is a need for an effective infrastructure working behind the scenes to keep things running smoothly. This is especially true in the nonprofit sector where operations support the organization in a number of functional areas, including: 

·   office management,

·   accounting and finance,

·   administration,

·    human resources,

·   information technology,

·   marketing and development.

Across all of these functional areas there is one objective: to make sure the organization is operating efficiently and to its full potential in providing goods and services to a community.

One of the challenges of nonprofits is to create and manage a structure that works well. Many founders of nonprofits are not managers and do not have a background in management. They are “program” people. They created the nonprofit to fulfill a goal, a dream that they are familiar with, but management is not their expertise.  Knowing the basic structure of a nonprofit can only help in setting up an organization that is functional.

It is important for founders and boards of directors to realize this issue and to find proper personnel or volunteers to fill out the needed spots. I have seen new, small organizations fail to follow their mission statements because they didn’t have a basic infrastructure, management, personnel to deal with proper insurance, and other risk factors.

A common structure is for nonprofit operations to be divided into  three  areas,  all  supervised  by  the  board  of directors that could have an executive director to manage the daily operations.

  • Programs/ Services -- MOST IMPORTANT       
  • Management and General -- usually overhead
  • Fundraising

Identification of the three main areas of nonprofit operations is crucial to set up proper accounting systems, internal controls, reporting, and management.  If you have an area of operations, it must follow this organization. Sometimes it’s not that obvious.  For example, someone working in contract compliance is most likely part of management, even though the work relates to programs as well.

BEWARE>>> Note that tax returns and most financial reports are classified by these three areas.

 
Read about donations details that matter
Read about volunteer retention ideas
Check out 'Nonprofit Finance: A Practical Guide" -- Nominated for the McAdam Book Award
Website: www.webshanker.com

 

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<![CDATA[Quick Tips on Internal Controls]]>Sat, 08 Apr 2017 00:07:26 GMThttp://webshanker.com/1/post/2017/04/quick-tips-on-internal-controls.htmlInternal controls does not mean a convoluted way of doing daily transactions. You do not need to spend a fortune to have good controls at a small environment, including small businesses and nonprofit organizations.  

Below are some more ideas that can be implemented easily:

1- Have bank statements sent to the home of the executive director or a board member who is not involved in accounting. This person can take a quick look at the statement and at copies of checks for any unusual activity. Then he can give the statements to accounting personnel.  Since many use online banking, someone apart from accounting can take a look online at bank transactions, even before statements are mailed out.  

2- Always have two people counting cash. One person can count first while another witness and then the other person counts it, writing down the total and then securing cash with a rubber band and/or an envelope. Keep it in a safe before depositing it in the bank, not in a drawer or in an obvious place. If needed, get a safe and have it bolted to the floor or wall.

3- Wire transfers must be done by two people- one to initiate the transfer and another one to approve it. Both could have passwords or PIN numbers for extra security.  In the case on online payments where the bank pays someone directly, at least one person outside the process should approve this before it is done.  You can set this up with your bank.

4- Petty cash is kept in a safe- again, not in a desk drawer. Thieves know that drawers may contain petty cash and they go there first.  Keep petty cash small and replenish often, checking on receipts.

5- Review bank reconciliations monthly with no delays and look at odd deposits that have not cleared the bank and old checks that are still outstanding.  Check on deposit amounts on the books and on the bank to make sure they are the same. Also, look at checks being cashed to see if the amount and payee make sense. Many online banks allow you to actually see a copy of the check online, which can be very helpful.

6- Give receipts to everyone giving your organization money, specially cash. The receipt book should have duplicates so that the top receipt goes to donor and the copy stays in the book. Depending on the amount, the person receiving the money could sign a receipt to make sure the organization have proper records.

7- If using faxed forms for donations or payments, mark the original faxed page as "Original" in red. This is especially important in credit card donations. Otherwise it is too easy to charge a card multiple times for one donation. Make sure that donors know that faxed forms are NOT to be mailed. A good option here is to handle most cash inflows through a website.

8-People working with cash and accounting should take vacations. Many fraud cases are discovered when the perpetrator is home sick or away and someone else takes over for a few days. It's good to have more than one person trained in certain accounting tasks, so that if something does happen, someone can fit in with minimum training.

9- Make sure your insurance policy covers losses, such as fraud, just in case. This policy should also cover volunteers and part-timers. Be sure to double check with your insurance company regarding any special events or programs that may require a special rider. 

10- Consider getting background checks on everybody handling financial tasks. It's not that expensive and you can decide about hiring the person upon reviewing the background check. These checks are often required by insurance companies, so it's usually not a big deal.

Read about donations details that matter
Read about volunteer retention ideas
Check out 'Nonprofit Finance: A Practical Guide" -- Nominated for the McAdam Book Award
Website: www.webshanker.com


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<![CDATA[Nonprofits In-kind Contributions-- Basic Financial Issues]]>Mon, 03 Apr 2017 19:22:31 GMThttp://webshanker.com/1/post/2017/04/nonprofits-in-kind-contributions-basic-financial-issues.htmlOrganizations do not get cash donations only. Many times they get furniture, equipment and other items that are valuable, but are not in form of cash, check or credit cards funds. These types of donations are considered to be in-kind contributions. If an item is expensive, for example $5,000 and over, a formal appraisal may be needed, not just for accounting purposes, but for taxes as well. Often enough donors help to pay for the appraisals because they want the deduction in their income tax returns.

Donated in-kind contributions are booked as both expenses and revenues. The journal entry is:

Debit Equipment expense-In-kind 3,000

Credit Donations- In-kind 3,000

Donated in-kind contributions can also be booked as a debit to assets, in the case of items that can be capitalized, usually expensive, such as donation of costly computer servers.. The journal entry then would be:

Debit Asset- In-kind 10,000

Credit Donations- In-kind 10,000

Capitalized assets are often depreciated over the useful life of such asset.

The other type of in-kind contribution is related to donated services. Per accounting rules, only professional services can be recognized. For example, if volunteers work at special events as ushers and receptionists, their time is not recognized by accounting. However, if a doctor provides services or a lawyer volunteer his time with professional services, then the time is accounted for using a reasonable hourly rate. For example, a CPA may provide high level accounting services for free and an hourly rate of $150 would be reasonable. If an lawyer provides legal services usually billed at $200/hour, but charging the organization only $30/ hour, the difference- $170- is considered in-kind donation. The journal entry to book this contribution for 10 hours will be:

Debit Legal expenses - In-kind 1,700

Credit Donations- In-kind 1,700

In order to substantiate in-kind services, the professional could send the non-profit a note with his time spent. The organizations could send the professional a thank you note acknowledging his donated time. Note that services donated are not deductible in income tax returns.

Overall, nonprofits should have policies and procedures to define in-kind contributions, what should be expensed instead of capitalized and other detail. It's important to keep the accounting of in-kind contributions consistent.

Read about donations details that matter
Read about volunteer retention ideas
Check out 'Nonprofit Finance: A Practical Guide" -- Nominated for the McAdam Book Award
Website: www.webshanker.com





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<![CDATA[Paying your Bills Online-- Options]]>Sun, 02 Apr 2017 19:24:12 GMThttp://webshanker.com/1/post/2017/04/paying-your-bills-online-options.htmlMany people, businesses, including nonprofits, have stopped paying their bills using checks, envelopes and postage; instead, they prefer to use the Internet to make payments. It can be very convenient. When paying bills online, you have a few options, such as bank-generated payments and vendor-generated payments.

Bank Generated Payments

Many banks offer bill paying services for free. You enter the vendor's name, address and an amount at the bank's website and a check is issued on a specified date. Every month you must log in the bank site and change the amount to be paid. It's simple and straightforward. 

This system is great for people who travel a lot, and want to have control over bill payments. this also works well for small or one-person accounting departments. Depending on your bank, you can sign up for checks to be issued for certain amounts every month, such as for mortgage or rent expenses. When you use this method, payments go out without you having to log in and authorize them individually. Be sure to schedule payments in advance of due dates, and beware that sometimes payments are not received by vendors and are returned to the bank. Test the system by sending payments many days before they are due, so that if they don't go through, you don' t use the bank service. Usually, if the first bank payment goes through, chances for problems down the road are slim.  

Vendor Generated Payments

This type of online payment has been around before the Internet became so popular. The idea is to let the vendor to debit the payment from your checking account at a certain date every month. Instead of the bank making payments, the vendor pays itself by using your account. You can allow individual payments to be taken from your bank, or you could go to "auto-pay," when payments are debited from your account every month. You don't need to worry about payments -- if you have a balance in your account, payments are done behind the scenes for you. Many people use this option with credit card companies to get the minimum amount paid every month. 

Auto-pay can be a good option if you travel a lot, or you want avoid late charges.Same comment for one-person or small accounting offices. However, once you're on auto-pay and you find an error in the bill, the payment may come out of your account, and it may take time to get the issue resolved. Because of this issue, usually auto-pay using a credit card may be better since it may be easier to get money back.

Another problem with auto-pay is that you cannot stop your bank from accepting the charges. For example, if you signed up for loan payments using auto-pay, these businesses can debit your account even after you pay your loan in full. Your bank may give you credit, but the process can be a hassle to resolve. Often banks advise customers to close accounts to avoid auto-debits, which can be problematic for nonprofits and small businesses.

Special Considerations

Setup a procedure to use online payments and keep up a written list of such payments to document ALL online payments to avoid confusion. For instance, a bookkeeper may pay a bill with a check, while the same bill is paid automatically by a vendor. Accounting staff needs to be aware of all Internet payment types to avoid double paying or paying late. 

Another concern is to make sure that internal controls exist to prevent misuse and errors in online payment processing. For example, an accountant may set up auto-pay in a bank to pay a fictitious firm and nobody would know about it. To avoid this problem, make sure that someone outside accounting, such as a manager or board member logs in the bank website and review auto-payments and debits to the account at least once a month. Some banks offer the option of emails be sent to business owners or someone outside accounting to provide a form of internal control to this process.

Read about donations details that matter
Read about volunteer retention ideas
Check out 'Nonprofit Finance: A Practical Guide" -- Nominated for the McAdam Book Award
Website: www.webshanker.com




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<![CDATA[Tax Forms Nonprofit Organizations Need]]>Sun, 02 Apr 2017 19:00:11 GMThttp://webshanker.com/1/post/2017/04/tax-forms-nonprofit-organizations-need.htmlIt may come as a shock to you to learn that nonprofit organizations file tax returns and may even pay taxes on certain income. But it's the truth -- nonprofits must be aware of many tax forms at local, state and federal levels. If nonprofits fail to file the forms, they may be liable for penalties and interest, making tax compliance a priority to many organizations. This article focuses on federal and California tax forms and requirements.

Below are some tax issues and forms nonprofits should pay attention to.

Sales tax

States and local authorities may collect sales tax on fundraising efforts, including proceeds from auctioned items. Some states allow for exemption if the nonprofit files for an exemption form before the event.

In California, sales taxes are applied to certain auction items, and the nonprofit must remit the tax using the form BOE401a2. Depending on the case, you may need to file the taxes online and pay using a regular check, e-check or other method.

Payroll taxes

Nonprofit organizations must follow the law when it comes to payroll taxes, including withholdings and paying their share of Social Security tax, unless the nonprofit has its own approved retirement plan.

Nonprofits file the same payroll forms, as for-profit business do, such as the form941, Employer's Quarterly Federal Tax Return, and form 940- Employer's Annual Federal Unemployment Tax Return. A nonprofit distributes tax forms W-2 to employees in the beginning of the following year with summaries of salaries and withholding.

States also have their own payroll taxes. California has the formDE 1NP Registration Form for Nonprofit Employers and DE-9 Quarterly Contribution Return and Report of Wages.

Annual Information tax returns

Except for religious organizations and a few others, nonprofits are required to file a form within the 990 tax series a few months after year-end. Small organizations may file online the e-card 990-N, giving the IRS basic information, such as name and address of the nonprofit. Larger organizations file the forms 990 Return of Organization Exempt from Income Tax, or the 990-EZ, which are more detailed, requiring specific numbers for revenues and expenses along with information on programs and board of directors.

California has annual reporting requirements with smaller organizations filling out form FTB 199N online, and larger ones filing longer, more detailed form 199.

Unrelated Business Income tax

There are instances where nonprofit may compete unfairly with for-profit businesses, such as a nonprofit opening a restaurant with no connection to its mission. Many exceptions apply, but if the organization is deemed to have unrelated business income, it must file form 990-T with the IRS and pay the proper tax.

California requires that nonprofits with taxable income to fill out the form 109 Exempt Organizations Business Income Tax Return.


>>>>Be sure to double check the requirements for these forms at least once a year, since things change often and you don't want to be out of compliance. For instance, Obamacare has requirements for businesses, including nonprofits, to provide health insurance for employees if the organizations have certain number of employees.  It also may be possible for smaller nonprofits to get the Small Employer Tax Credit.  Since Obamacare may change in the future, keep an eye of it.


Read about board issues here
Read also No more Audit Freak out
Check out  the book 'Nonprofit Finance: A Practical Guide" -- Nominated for the McAdam Book Award
Also check out the book "15 Quick Tips on Becoming a Great Consultant" -- free on Kindle Unlimited
Website: www.webshanker.com







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<![CDATA[How to Set up an Accounting Department- Nonprofits and Small Businesses]]>Fri, 31 Mar 2017 20:31:57 GMThttp://webshanker.com/1/post/2017/03/how-to-set-up-an-accounting-department-nonprofits-and-small-businesses.htmlMany growing for profit and nonprofit organizations find themselves with financial reports that make no sense, "forgotten" revenues and slow bill paying processes. They may be at a point where the part-time bookkeeper is over his or her head and flooded in work. So, what can you do? You can look at accounting tasks and divide the work within these tasks. For example, a typical accounting department performs the following work:

  • Pay bills - Accounts Payable
  • Recognize revenues - Accounts Receivable
  • Process payroll - Payroll Administrator


Other tasks associated with an accounting department are: Cash management, bank reconciliations, budgets, financial reporting and taxes. In large businesses each of these functions is performed by one individual or more. In smaller firms, tasks are shared and staff is supervised by a manager or a controller, who often is responsible for financial policies and procedures for the organization.

A mistake common in growing small businesses is to assume that accounting is easy and can be done by the person who is a receptionist or works in another part of the business. Without training or education, this person should be able to perform accounting functions of a full-charge bookkeeper. That's a mistake and is not fair. Hire accounting people who have the proper education and experience. Accounting managers or controllers should have at least a bachelors' degree in accounting. Someone with a four-year degree in business, and a few years of accounting experience may also qualify.

As you organize the department, consider segregation of duties. For example, the person who opens the mail or receives money should NOT be the person who books revenues in the accounting system. If the person running accounts payable is also doing bank reconciliations, then a manager or controller should review the reconciliation and look at cashed checks. Why?  To have a form of check-and-balances, internal controls, to prevent and correct mistakes or misappropriations.  

Before hiring anybody for accounting positions, run a background check on all individuals, who should be trustworthy with a clean credit history. Of course, exceptions can be made, but they are usually rare occasions.  This also applies to volunteers as well.

Many businesses organize their accounting department using flowcharts and job descriptions. You don't want to have the same task be performed twice or three times and at the same time, you don't want to miss an important process. Some firms hire outside consultants to help them in organizing their department for maximum efficiency, while considering risks and controls. Unfortunately, this last option is usually used after a fraud or loss situation, when people are traumatized and willing to pay for professional advice.  

When considering a new accounting department, you have a few options and what works for one business may not work for another. You could organize the department yourself and then ask for an outside CPA or management firm to review your set up for internal control and efficiencies.

See more:
Nonprofit Financial Statements blog
Budgeting for Nonprofits blog
Website home: Webshanker.com
Latest book -- Nonprofit Finance: A Practical Guide- Nominated for the McAdam Book Award





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<![CDATA[Tips on Grant Management for Nonprofits]]>Fri, 31 Mar 2017 20:23:05 GMThttp://webshanker.com/1/post/2017/03/tips-on-grant-management-for-nonprofits.html
  1. Setup a summary sheet for each grant with reporting dates and other crucial date information. This summary is updated for each new grant and is reviewed every week to make sure nothing falls through the cracks.
  2. Develop your own standard template for each grant. Every write-up should look the same with a couple of sentences about the purpose of the grant and then fields for dates, specific requirements and other compliance issues in detail, such as staff education level requirements. The template could be setup in a spreadsheet or in a database to facilitate access and reporting.
  3. Make sure the accounting system captures revenues and expenses on each grant. You could identify grants through the chart of accounts by reserving a couple of digits towards specific grants or through "classes" or other method specific to your software. You may also need to train your accounts receivable and payable staff to recognize grant funds coming in and out so they can code them properly. If items are not coded properly, you will have a nightmarish time providing reports to grantors and other interested parties.
  4. Develop a good filing system. Be sure to download and print all OMB Circulars and other documentation relevant to grant control, including notes on meetings and phone conversations. Keep them filed and accessible at all times. You can make a summary listing of all non-allowable costs that you are likely to have and keep it handy.
  5. Establish a budget for the organization based on grant budgets. Every grant funded project should have its own budget, which is entered in your accounting system. Review reports on each project monthly to be identify errors and monitor financial compliance.
  6. Review documentation on journal entries associated with grants. It is easy to make mistakes in journal entries and a regular review can identify and correct the mistakes. All journal entries should have proper documentation attached to them explaining clearly the purpose of the entry and how numbers were derived.

Read about board issues here
Read also No more Audit Freak out
Check out  the book 'Nonprofit Finance: A Practical Guide" -- Nominated for the McAdam Book Award
Also check out the book "15 Quick Tips on Becoming a Great Consultant" -- free on Kindle Unlimited
Website: www.webshanker.com






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<![CDATA[5 Quick Tips on Nonprofit Planning]]>Fri, 24 Mar 2017 23:53:00 GMThttp://webshanker.com/1/post/2017/03/5-quick-tips-on-nonprofit-planning.htmlEach organization is different, but every nonprofit faces challenges when planning for the future. Cash flow is crucial --no business, including a nonprofit, survives without proper funding. However, oftentimes, people are concerned about the day to day activities of an organization and don't pay attention to planning for the future. This issue has become even more important now that FASB released a new guideline requiring nonprofits to basically show how they can pay their bills in the next 12 months. This guideline is effective for organizations with fiscal year beginning after December 15, 2017.

Check out 5 ideas that nonprofit managers may consider when conducting financial planning for an organization:

1- Use a budget

Budgets should be prepared before the year starts. Small organizations could use the prior year's income and expense numbers as a budget number for the following year. Running a nonprofit without a budget is like shooting in the dark. It's too easy to forget details and to end up with no money at the end of the year.  Once a budget is setup, then income and expenses should be compared to the numbers to be sure the organization is on target financially.

2- Pay attention to the timing of your cash flow

Cash is king in the nonprofit world. Without cash, an organization cannot pay its bills and must close. Timing is crucial, not just the amount of funding.  For example, if an organization has a big bill to pay in August, but the money to cover this expense will be received in November, the nonprofit must deal with this shortage and start planning for it months in advance.

3- Consider getting a line of credit BEFORE you need it

Since funding can be cut or reduced, nonprofits should get a line of credit from its bank. the best time to apply and get a line of credit is before the nonprofit needs it. This money could be used if funding is delayed or to cover a planned short-term cash shortage. Inquire about lines of credit for nonprofits, which may have a lower interest rate and more favorable terms.

4- Educate your board of directors on financial literacy

Many organizations have very involved directors and officers, but they don't really have the knowledge required to run a nonprofit. Such leaders should get a basic understanding of finance to evaluate reports and to hire and staff the accounting department properly. Some boards hire an outside consultant to come in a few hours a month or a week to supervise staff and resolve any problems before they become major. It's an option, but the board must understand what is going on.
5- Allow for surplus

When planning ahead, be sure to consider getting a cushion for the unexpected. This could be 2-10% of the total budget for a year, or an amount or percentage agreed by the board. This surplus, also known as "reserve," is to be used for emergencies or unexpected costs, and is usually replenished once used up. The plan should be NOT to use these funds, but to have them, "just in case."

Financial planning for a nonprofit can be a bit of a challenge, but it should be done to maximize the chances for survival and growth of a nonprofit. Without planning, small organizations may get by, but may not be ready for unexpected funding cuts or events. Making financial planning a priority can help your nonprofit to go in the right direction and make a difference in the community.

See more:
Nonprofit Financial Statements blog
Budgeting for Nonprofits blog
Website home: Webshanker.com
Latest book -- Nonprofit Finance: A Practical Guide- Nominated for the McAdam Book Award





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<![CDATA[Nonprofits- Why to Follow Accounting Requirements]]>Fri, 24 Mar 2017 23:24:22 GMThttp://webshanker.com/1/post/2017/03/nonprofits-why-to-follow-accounting-requirements.htmlMany managers get aggravated with demands from the accounting department.  However, nonprofits have a lot to gain by following proper accounting requirements, such as requesting proper receipts or approvals. The requirements may seem a bit burdensome, but they serve important purposes within a nonprofit organization's operations. 

Below are a few important reasons for nonprofits to follow accounting requirements:

1- Accounting/financial requirements may be mandatory for recipients of federal and other government funding. In order to avoid errors and misappropriations, grant providers often use certain requirements and procedures, including reports. There is really no choice-either the nonprofit follows the proscribed requirements, or funding stops.

2- The IRS inquires about financial tasks on the tax form 990, the information return filed by nonprofits. For instance, the return explicitly inquires about the number of items reported on the 1096, the Annual Summary and Transmittal of U.S. Information Returns. This is usually related to reporting payments to contractors over a certain amount. To comply with this inquiry properly, the nonprofit should have financial rules to capture this information.

3- The nonprofit must also follow all local, State and federal laws. For example, employees may need to file time sheets to be paid correctly. If they don't follow this accounting rule, paychecks may be printed incorrectly, putting the nonprofit at risk for fines and penalties. So, accounting folks must require proper documentation and approvals so that this process run smoothly. 

4- Following accounting guidelines protect the nonprofits from errors and fraud. An example would be the popular procedure of requiring approvals on all invoices to be paid. Usually, a supervisor approves such invoices to avoid payments for fake or wrong items or services. Compliance with accounting requirements can save the nonprofit lots of money.

5- Compliance with accounting requirements, including financial processes, are often evaluated by auditors to assess the risks of nonprofits. If an accounting requirement is for monthly cash reconciliations, for instance, but the auditors note that they are actually done once every four months, most likely the audit risk will increase along with the costs of such audit. So, accounting requirements are to be followed ALL THE TIME to avoid problems.

6- Accounting rules can help in building a nonprofit's competence, while minimizing confusion. For example, a rule to pay bills on only certain days every week may give employees the sense that there is  set order and process to do certain tasks. One cannot walk in there and expect that a check be ready within minutes. Financial rules can instill confidence and controls within a nonprofit.

Accounting, taxes change throughout the years, so don't be surprised if the requirements change. 
For example, starting effectively in 2018, nonprofits must prove that they can pay their bills short term. This is a new  requirement of FASB, the organization that dictates accounting rules for nonprofits. So, expect some new requirements from accounting regarding this new guideline and others coming down the pipe.

Read about board issues here
Read also No more Audit Freak out
Check out  the book 'Nonprofit Finance: A Practical Guide" -- Nominated for the McAdam Book Award
Also check out the book "15 Quick Tips on Becoming a Great Consultant" -- free on Kindle Unlimited
Website: www.webshanker.com



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<![CDATA[Don't Approve this Bill-- Wait]]>Fri, 24 Mar 2017 18:51:07 GMThttp://webshanker.com/1/post/2017/03/2.htmlYou’re an executive director or a manager, and you receive a request for payment on a bill or a stack of bills. You look up the backup documentation, see authorizations and all the proper paperwork and you're done. Simple enough, right? Hold on a minute. Many managers really don’t question anything, but look at a bill and go on auto-mode on approving bills. This can be quite risky, and if something goes wrong, blaming someone for your wrong approval or payment will not go well. Below are some ideas about what to do to avoid issues paying bills.

 1- Ask for a vendor change/new vendor report from your computerized system. Most software can give you this information. The idea here is to make sure the vendor exists. I (and probably you) have heard about employees making up vendors and depositing checks in their own accounts. It could be an odd name that could be someone’s grandma or a name similar to other vendors. The step of reviewing new or changed vendor information regularly may prevent this issue.

 2- Have a policy of requiring two signatures on payments of over a certain amount, say $5,000. It’s always good to have two pairs of eyes looking at the documentation. One or both people could be members of the board of directors or managers in different departments. Many nonprofits have more than two people allowed to sign on payments to vendors, so that if one person is not available, another one may be. Additionally, make sure that whoever signs checks or make online payments is not connected with the accounting area to assure proper segregation of duties. 

 3- Review your bank account online once a week, looking at a sample checks to make sure they look familiar. Unfortunately, it’s possible for checks and other payments to be modified after they are signed off. Zeroes can be added afterward or payee can be changed a bit. So, having someone not involved with accounting take a look online at the checking account can prevent problems down the road. Also consider using “positive pay,” a bank system that only pays checks on a list. Review this list regularly, if your nonprofit uses this system.  ]]>