Incomplete & Inaccurate Accounting

CFO_for_Hire_7

Challenge: Incomplete & Inaccurate Accounting

Initial Status:
This not-for-profit client had a small office staff, a Board of Directors, and several committees including an executive committee and a finance committee. The organization had a Business Manager and an accounting “consultant,” but was in need of a bookkeeper to address general accounting and bookkeeping duties. The client had also recently undergone a particularly challenging audit, for which auditors spent an exorbitant amount of time working through the available material to even produce a financial report to begin the audit process. The auditors recommended that the organization seek the services of a skilled bookkeeper. While the accounting consultant had some expertise, the individual did not possess the skill set necessary to handle all of the daily procedures, establish processes to input information, or keep track of the many different revenue sources or expenditures.

Initial Solutions:
CFO for Hire met with the organization and began work roughly four months before the end of the organization’s fiscal year, with a goal of reconciling and balancing each and every item of the client’s financial statement. Bank accounts were unreconciled since the completion of the audit. All bank accounts were reconciled; all deposits, sales, payroll and other statements were thoroughly documented and balanced, and a process was developed with the organization’s management to ensure continuity. Additionally, processes were developed to address the client’s many revenue sources, including sales, grants, and deferred or pre-paid revenue.

Results:
The organization is now able to present accurate and complete representations of their finances to their Board, Committees and auditors. Prior to CFO for Hire’s intervention, 50 journal entries were needed to balance financial statements for their annual audit. After the first year working with CFO for Hire, they required only 10 journal entries. For this year’s audit, they are anticipating less than 5. The accounting and financial software has been set up with appropriate administrative privileges. A procedural, step-by-step system has been implemented for all departments; monthly balance sheets are reconciled, with work papers for every item. In addition, the organization can now prepare budgets with a full understanding of accurate financial status and statements.

Ongoing Opportunities:
The organization continues to seek CFO for Hire’s assistance in future projects, including analysis, evaluation of specific areas of revenue and expense, and ‘top level’ financial consulting.