There are many challenges in managing an association. Especially a small one that doesn’t have endless resources or a need for numerous full-time staff members. For a small association in particular, the accounting most likely does not require the work of a full-time accountant. However, it’s still important to ensure the association finds someone with the right expertise to avoid mistakes down the line.
A solution might be to hire a professional accountant! But how do you know when this is right for your association?
A professional accountant will be able to help you understand exactly what the government requires your association to file. They will know what deadlines to meet and how to avoid situations where you may need to be audited. Most people think of an accountant as someone who helps fix a problem after it has occurred. However, there are things that can be done to easily avoid raising red flags in the first place.
Save Time, Money and Sanity!
Board members might think it’s best to hire a part-time bookkeeper to perform the association’s accounting duties. However, considering the time and energy it requires to fix possible errors, the benefits definitely outweigh the costs. This is especially true if the association has experienced growth or a change in systems, having someone that has experience in these areas is well worth the cost. Hiring a professional accountant on a part-time basis or contract term will help avoid headaches in the long run.
Quality Financial Reporting
Financial reporting is crucial to a well-run association. Having an accountant that is properly trained in compiling and reading financial reports can be invaluable. Many accounting software programs these days make it easy to click a button and get financial reports but understanding them is another story. A professional accountant will have the experience necessary to know what to look for on financial statements and how to analyze that data using various ratios or other experience they have gained from all the previous reports they have analyzed in the past.
Also, a professional accountant is someone familiar with the review engagement/audit process and can make preparing for these engagements an easy process. They will know what external accountants are looking for, format-wise, to provide the information that is as seamless as possible. For more information on how to prepare for your annual audit click here.
Budgeting is an important process for any association. Having someone that understands the process of setting up and managing a budget is a valuable asset. An accountant will know what they are looking at and can help set measurable goals and report on the progress towards achieving them.
Plan for the Future
One of the biggest benefits to hiring a professional accountant is getting advice on how to plan for the future. An accountant will know which calculations to do and what reports to look at to help you determine the right decisions to be made for your association for the long term.
How to Find What You Need
When you are looking for someone qualified to do the accounting for your association it is a good idea to look for someone with an accounting designation such as Chartered Professional Accountant (CPA) (previously Chartered Accountant (CA), Certified General Accountant (CGA), or Certified Management Accountant (CMA)). Previous experience in an accountant is usually a vital piece of information in knowing whether someone has the skill set required and the fact that they have a designation will ensure that sufficient experience has been obtained.
In particular, professional accountants can help smaller associations stay on track, but they should not be the only ones who are involved in the daily financials, reporting and budgeting processes. For these associations, it is important to involve board members, volunteers and staff so they understand how their involvement affects the association’s bottom line as well. Read my past article on boosting your association’s financial knowledge here.
The right accountant and a well managed accounting system will save you time and money in the long run. It will allow you to focus on what must be done from a management or board focus. All in all, the right accountant can position your association for maximum profitability and success.