Need customer service? Tips to get satisfaction

Many small businesses need help in setting up new equipment or have problems with other purchases, prompting them to contact customer service. This could be issues with computers, software, or assembling furniture.

The idea is for customer service to provide guidance or solutions to the problem, which seems simple, but oftentimes customer service representatives don’t meet expectations. The customer service representatives can be pleasant and patient, but the experience can be exasperating with employees and small business owners spending hours or even days trying to resolve a problem, creating stress and possible loss of income.

So what can you as a small business owner, office manager or administrative assistant do to make sure you get the needed information or help you need? We all know about documenting the time of contact and name of the customer service representative, but what else can you do?

Here are some ideas you may consider when you contact customer service:

https://www.quill.com/blog/tutorials/how-to-get-satisfaction-with-customer-service.html

Is Your Nonprofit Data Safe?

Many nonprofits keep confidential information on their computers, including sensitive data and items that cannot be lost. Membership or donor information, accounting data, and other confidential information should be safeguarded against snooping eyes.

A typical control here is to have a disaster preparedness plan, which includes a recovery strategy for the nonprofit’s functions. But that’s not enough.  Organizations should consider the following issues with software, hardware, and the cloud.

Software

Risks when dealing with software include unauthorized entry, loss of data, and confidentiality issues. Some internal control mechanisms to minimize these risks are:

  • Use anti-virus and firewall programs to prevent malware from infiltrating the system.
  • Do daily backups of all systems and keep the backed up file outside the premises.
  • Require IDs and passwords on all systems.
  • Acquire programs to identify and stop unauthorized entry using the Internet and other means.
  • Require information system’s authorization for program purchases to be sure the program is indeed needed and is compatible with existing software.
  • Once employees leave the organization, they should not have access to the nonprofit’s systems
  • Include security to prevent information systems personnel access to passwords or confidential information.
  • Create policies and procedures about computer usage and safety.

Hardware

The risks with hardware involve theft, maintenance, and obsolescence of the machines. Below are some controls to minimize these risks:

  • Place all equipment, including servers and printers, in a safe location.
  • Label all equipment with numbers and create a list of all equipment using the number and description.
  • Maintain this list, doing physical audits to identify equipment disappearances, losses and damages.
  • Centralize maintenance services and schedule them regularly.
  • IT management should approve purchases, retirement or sales of hardware.
  • Dispositions of old computers must be done carefully since they contain confidential information that may be recovered unless the nonprofit takes certain
  • Dispositions of old computers and peripherals must comply with laws to avoid poisoning the environment and possible fines.

Using the Cloud

Many nonprofits have been using accounting and other programs “in the cloud.” This means that organizations’ management and staff access these computerized programs through the Internet, making the software very convenient since employees can access the system anywhere as long as they have proper online connections, login IDs, and passwords.

-Organizations using old, unreliable equipment may benefit from the cloud since the data is not saved locally. If the server or individual computers stop working, the information is not lost and is still available.

However, there are risks associated with the cloud system. For example, the program may not be available online for long periods. So, before selecting a cloud system, check its reliability through Internet searches and word-of-mouth.

Once the organization decides to go online, management must trust the Internet provider to provide adequate security for the data, which may include donor information. Not surprisingly, data security of cloud systems is a major concern for both for-profit and nonprofit users.

Another issue with the cloud is the data transfer. If a nonprofit employs the cloud and then moves to another system, the existing data will need to be downloaded and transferred to another program. The cloud provider should allow for such transfers and help the organization in this matter, but some charge fees, so inquiries about this matter are beneficial to avoid surprises later.

Interested in CPE credits regarding nonprofits?  Online Practical CPE Courses

You can also check out my books:

Nonprofit Finance: A Practical Guide 2nd Edition— Nominated for a  2016 McAdam Book Award

15 Quick Tips on Becoming a Great Consultant  — Free on Kindle Unlimited

 

Another Nonprofit Exec in Jail

Not to be too paranoid here, but I just read an article about the Simi Valley Community Foundation whose former executive director stole over $45,000. According to the news, she forged a second signature on the checks used to pay her own mortgage.  Sadly, this embezzlement cost the organization its reputation as it had to stop operations, at least for now.  A total disaster.

It’s not clear how exactly the theft was discovered, but board members noted something odd, hired a forensic accountant to review the records, and went to the police with evidence of embezzlement. So, I give credit to the board for finding this out, but this theft had been going on for awhile.

So, what can a board do to prevent or identify financial fraud faster?

1- Knowledge –Get people on the board who understand financial matters and can ask the right questions. The board cannot have the obligation to fundraise and provide oversight only. Board members should have different backgrounds with least one person having the education and experience to really understand the information provided and ask good questions. Had this person been on the board of this Simi Valley nonprofit, the fraud may have been identified earlier.

2- Online Access –Have someone from the board check on the bank accounts of the organization online. He or she should review checks and deposits, looking for checks that don’t look right. Just having a policy about this review may deter fraud. Employees may think twice before forging signatures or doing something odd when they know that someone would be looking at the bank transactions regularly.

3- Pay attention –Listen to complaints from staff, donor, and vendors. Oftentimes, information that could be construed as gossip can be useful in pointing you in the right direction. People talk. Even though it’s not clear how the board of the nonprofit became aware of something wrong, my bet is that someone saw something and talked about it. Some nonprofits have started using hotlines for people to report possible fraud anonymously, a very good idea.

4- Variances –Pay attention to the actual vs. budget reports. Looking at this fraud, one may wonder how the $45,000 theft was classified and shown on the financial reports. The amount didn’t show up all at once, but it was likely classified as a budget item. So, if an overage is noted, the board should ask for back up documentations, such as bills.Talk only doesn’t explain financial issues.

5- System reports –Review new vendor/change vendor reports once a month to question any odd new vendor or changes. In this situation, the bank where the mortgage was paid to would have been added at a certain point to the accounting system. Had this report been reviewed, it may have flagged the bank as an odd vendor. Some accounting systems can send an email whenever a new vendor is added or changed, making this task automatic.

6- Bank reconciliations — Check on bank reconciliations, making sure they are done monthly. Keep an eye on deposits that are recognized in the accounting records, but don’t seem to be in the bank.  Also, look at the detailed outstanding checklist. This can be done online using the accounting system and can be emailed to someone at the board. If a check shows up at the bank, but not on the accounting records of the organization, it could be a red flag.

7- Self-reliance –Don’t count on auditors to notice embezzlement. Audits are designed to assure reasonableness of financial statements and they may identify fraud, but not always, especially when done by management. When something seems wrong, not it, and don’t wait for the auditors to figure it out. Insiders are the first people to note things that don’t seem right.

8- Education — Educate all employees on fraud and embezzlement. Nonprofits should have this topic on its policies and procedures documentation and not be embarrassed about it. Fraud happens not just with stealing funds, but in other areas as well, such as equipment theft and overtime pay without authorization. Just showing this awareness and clarity over fraud may prevent it in the first place.

It’s a shame that nonprofit boards must be always on alert for fraud and embezzlement, but that’s the reality of the situation.  Once a scandal happens, it’s hard for the organization to regain the trust and respect of donors, making it hard to move forward.

So, it’s time to talk about this issue openly and set up written policies and procedures with tasks specifically designed to prevent and identify fraud and theft.  The ideas presented here won’t assure boards that they are safe from this issue, but are steps in the right direction.  Each organization is different and I’m sure many will need more control features than the ones presented here.  The crucial point here is that fraud signs cannot be ignored by the board.

Interested on CPE credits regarding nonprofits?  Online Practical CPE Courses

You can also check out my books:

Nonprofit Finance: A Practical Guide — Second Edition 

Nonprofit Finance: A Practical Guide — Nominated for a  2016 McAdam Book Award

15 Quick Tips on Becoming a Great Consultant  — Free on Kindle Unlimited

Nonprofit Budgets Explained

Budgets are financial guidelines to make sure the organizations are going in the right direction. Like any other business, nonprofits need to plan ahead using budgets, often based on prior financial data and expectations for the future. This process, done a few months before the new year starts, involves managers and board members, to make sure the budget is reasonable and attainable.

There are many ways to start the budgeting process. Many organizations develop budgets based on income first and then expenses, while others start with expenses and then work on the revenue — it depends on the nature of the organization. For example, when a nonprofit receives most of its income from grants, it’s easier to estimate income first and then work on expenses.

Budgeting is a group effort

In order to develop a good budget, you need to be realistic and detailed-oriented.  A lot of research is required, and not just financial, but programmatic as well — is the nonprofit going to expand or shrink certain programs?  Are there any plans for construction or another capital improvement?  You cannot do it in a bubble –you need a lot of information from the past and from the future, and that usually involves many meetings and discussions.

Use prior financial reports

The first step to create a budget is to print out current revenue and expense detailed report by account and use that as your basis for the future. For example, if you see rent expense of $1,000 a month, then you should budget for this amount for the following year unless you know that the rent will increase or decrease in the near future. Look at each account and try to forecast the best you can about the following year. This type of work is often done during the last months of the prior year so that any trends or new information is included in the budget.

Consider major changes and grants

Although budgets are usually done once a year and then the numbers remain static, there are instances where budgets are changed and re-approved by the Board during the year. This may happen when a nonprofit loses or gains major funding by surprise, making the original budget obsolete.

Nonprofits receiving government funds incorporate grant budgets as their own. It doesn’t make sense to use multiple budgets — it creates confusion.  Organizations also need to consider government cuts and how that would affect operations.  As a rule, budgeting for a bit more revenue than expenses, allowing for cuts and unexpected expenses is a sensible approach. It’s always good to have a bit of a financial cushion.

Budget follow up is a must

Once budget numbers are approved by the Board and entered in the accounting system, the next step is to get actual vs. budget reports starting with the first month of the new year. Be sure to look at budget variances for the month and year-to-date. If you only look at monthly numbers, you may miss variances that may be small on a month-by-month basis, but significant for the year. For instance, if you see that your revenue is down $10,000 this month, it may not mean much, but if you compare year-to-date actual to budget numbers, you may have a $100,000 hole in the budget that needs to be corrected by using funds from prior years or by cutting down expenses.

Note that many nonprofits count on restricted funds to operate and that’s when confusion may start up. When developing an operating budget, differentiate between restricted revenues and others and be sure that donor documentation supports the decision to use restricted funds. You cannot unilaterally decide to use restricted funds — the donor must have given express permission for the money to be used a certain way.

More than one budget

Some organizations have separate budgets for capital expenditures to be used in major construction or another major project, which can be a sensible budget approach. Keep the operating budget separate and review both, looking for discrepancies and double counting. For instance, you may receive funds to construct a school and that should go towards the capital budget only — not towards operations. In some cases, the same funding may show up in two different budgets by mistake. Look out for those that can create a major problem.

Keep good documentation

As discussions are done and decisions are made regarding the budgets, keep good records that are always important when looking at budget vs. actual reports. If numbers are not going according to plan, it’s crucial to look at the reasons for the budget amounts. For example, if expenses for postage are way over budget, maybe the budget numbers didn’t account for a new campaign or for all campaign expenses.  This can help budgets be more accurate in the future.  Documentation can also help management in analyzing the financial reports to identify areas of real problem.

>>>BEWARE  Accounting or the financial department folks should NOT prepare the budget by themselves —- they need to contact others within the organization to finalize the budget process.
Check out the book “Nonprofit Finance: A Practical Guide” –– Nominated for the 2016 McAdam Book Award

What You Need to Know to Organize Your Nonprofit

Are 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 at its full potential in providing goods and services to a community.  If a bill needs to be paid, people within the organization will know where the bill should go to, not just into a pile that once in awhile someone looks at.  Having a well and clear organization where functions are performed in accordance with a plan is a must for any nonprofit to survive and flourish.

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 in having proper accounting systems, internal controls, reporting, and management.  If you have an area of operations, it must follow this setup. 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.

 

Check out the book “Nonprofit Finance: A Practical Guide” –– Nominated for the McAdam Book Award

 

Grant Management Ideas

When a nonprofit receives grants, either from government entities or foundations, management needs to keep records well organized for questions or reviews. This can be tricky in the case of multiple funders with their own reporting and compliance issues. Even smaller funders may want to know what happened to their money and require some reporting, even if informal.  Showing disorganization and lack of controls may discourage donors to keep on giving, spelling disaster to nonprofits.

Below are some ideas that are likely to help you in this process.

  • Set up a summary sheet for each grant with reporting dates and other crucial information, such as education requirement of staff covered on each grant that is updated for each new grant and is reviewed every week to make sure nothing falls through the cracks. This could be done on paper or online, but make sure others within the organization have access to this information easily in case people go on vacations or leave the nonprofit. A template could be created so that all summary sheets look alike, making it easy to find information.
  • 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 another 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 not, you will have a nightmarish time providing reports to grantors and other interested parties.
  • 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.
  • Establish a budget for the organization based on grant budgets. Every grant-funded project should have its own budget numbers entered in your accounting system.
  • Review reports on each project monthly to identify errors and monitor financial compliance.  The Board and upper management usually receive summary reports, but other managers should review financial reports by grant source.
  • Review documentation on journal entries, accounting entries, associated with grants. Each expense and revenue should be justified with proper documentation. If you see a number that doesn’t make sense, ask to see the backup paperwork related to the number.

 

Check out the book “Nonprofit Finance: A Practical Guide” –– Nominated for the 2016 McAdam Book Award

 

Accounting Helping You?

“Business is great” is not as effective as “Business has had sales of $10,000 per month,” and you presenting a financial report with the numbers on it. The more precise you are, the more credibility you have. And to be precise, you need a way to compile, classify data — that’s the role of accounting in businesses, including nonprofits.

Without accounting, you really don’t know if your business is doing well, and you cannot answer simple questions, such as how much you paid for office supplies this year. If you’re small, you may get away by using your checkbook as an accounting system, but as you grow, you will see how hard it can be to control expenses and analyze transactions without a more formalized system.  Accounting software is so affordable and easy to use now that it makes little sense to be operating in the dark — without proper financial information.

Below are some compelling reasons to employ some form of accounting:

Objectivity:

Accounting is objective, rational, unbiased with no feelings attached to it. That’s why it’s so valued by managers who want data that is real and not based on gossips or recollections. Since these numbers are backed up by documentation, oftentimes the accounting department becomes the go-to place for many areas within a business. Of course, we have accounting fraud and bad accountants that make up numbers, but overall, if you have a well-run accounting department with proper controls, the information is good and reliable.

Accuracy:

The more accurate the information, the better off you are. It may not be 100%, but often financial reports can be relied upon for management to make decisions and plan for the future. You may have good intuition and make decisions based on that, but having something to validate someone’s intuition doesn’t hurt. For example, if you thought you had a great month and received about $100,000 in revenues, but the accounting system tells you that you made only $30,000, then you may need to re-think your estimation or look for reasons why the accounting system shows such a low number — it could be something you didn’t consider.

Organization:

Managers often use accounting to find specific information. Accounting organizes data so that it can be found easily. For example, if you want to find how much you spent on food for a program, you can go to a food account and see all food expenses there, organized. Because of accounting, all relevant data is in one place, in a certain order. Without an accounting system, you will need to look for paper docs, add them up and maybe miss a couple of those, making this task clumsy and ineffective.

Many people are scared of accounting, assuming it’s difficult and cumbersome.  But in reality, it‘s not.  Many popular programs, such as QuickBooks and PeachTree, have free online tutorials and help groups, making accounting accessible to many people with no accounting background. From experience, often the accounting system becomes the main information system of an organization with people relying on it for other functions, such as a customer service or membership information. Because of this need, many accounting systems offer other modules or add-ons to gather information besides financial data.

Check out the book “Nonprofit Finance: A Practical Guide- Second Edition” –– First edition was nominated for the 2016 McAdam Book Award.