More Investment, New Technology Could Relieve Drain on Finance
Technology isn’t the answer to everything, but it may be for challenges facing nonprofits’ finance departments, according to a new study.
Investment in new technology could help solve some of the problems a new Abila study found plague finance and accounting professionals in nonprofits.
The largest problem facing the finance division is interruptions from other departments. However, according to the survey of 350 nonprofit finance and accounting professionals, other trends also pose obstacles. Those include the reliance on smaller finance teams, the slow move to cloud technology, and a higher staff turnover rate among younger employees.
The report from Abila, a software and service provider for associations, revealed that 49 percent of respondents said their work was often interrupted by other departments. While seasoned veterans in finance possess strategic thinking skills to help propel the organization forward, they are so bogged down by tasks for other departments that they cannot meaningfully contribute, Abila’s director of product marketing Erika May McNichol said in an interview with Associations Now.
She suggested implementing technology in an organization to allow other departments to look up their own financial reports to limit disruptions.
“If we can allow those folks to self-serve that reporting versus having to go through the finance and accounting department, then we’ve suddenly created an additional hour, two hours per day for them and the financial accounting groups to formulate and execute the strategy that will ensure the ongoing success of the organization,” she said.
This problem is magnified by the leanness of financial teams. Following the recession, organizations were less willing to invest in hiring, McNichol said. As a result, 80 percent of nonprofits have small financial teams, which often cannot meet the demand for service.
Many teams also lack the best technology to perform their work. New technology, such as migrating to the cloud, would allow for more efficiency and better data processing in the department. Plus, it is more cost-effective by requiring less investment in hardware and better protects sensitive data.
“You’ve got a lot of people that are working nights and weekends in order to make sure that their vision and organizations can continue forward with tools that might not be well-suited for that,” McNichol said.
While the survey found 62 percent of nonprofits are already moving to cloud technologies, McNichol says those same organizations’ finance departments are lagging behind.
And this lack of adoption may be costing them in terms of employees. Moving to the cloud enables remote access, a feature that allows for more flexibility for workers. The option to work remotely also is key for recruiting and retaining younger employees, so offering the option could help decrease the higher-than-usual turnover rate among young finance staffers.
“Finance and accounting at a nonprofit organization has many different layers of complexity and nuance not often found in the for-profit world,” McNichol said in a statement. “What we found is that many of the finance and accounting professionals at nonprofits face some unique challenges.”