Top 5 Financial Tips Nonprofits Need to Know

Discover five key financial strategies for nonprofit success and start saving NOW with exclusive discounts and tips!

Last updated 20 September, 2024

In this article:
  1. Simplify Your Accounting 
  2. Use Charitable Discounts 
  3. Leverage Xero for Cash Flow 
  4. Go Paperless 
  5. Invest in Financial Management Tools 
2024 Finance for nonprofits Finance solutions Xero Charitable Discounts

Reading time: 3 minutes

In today's rapidly changing financial landscape, with increasing economic pressures and the shift toward digital solutions, staying on top of financial management has never been more important.

To help you navigate these challenges, we asked our finance team for their financial tips. Here's what they had to say: 

1. Simplify Your Accounting 

Managing multiple journals each month is tedious, especially when manually moving money between accounts without moving cash. To simplify this, use tracking categories—a feature in many accounting software platforms that allows you to organise and categorise transactions more efficiently. This significantly reduces the time and effort spent on monthly accounting, freeing you up to focus on your mission. 

Let's face it, accounting is already complicated enough as it is, so why should we make it harder for ourselves?!

Adding Tracking Categories in Xero:  

Case Study: Reducing Accounting time by 45%

Our client ILS – Independent Living Services was spending hours each month manually posting multiple journals. After implementing tracking categories, they reduced their accounting time by 45% (from taking 7 days, to now only 4 days to post journals). This allows them more time to focus on their mission

2. Use Charitable Discounts 

Did you know there are discounted rates for nonprofits?  

Tools like Xero (accounting software), ApprovalMax (approval workflow tool), and Lightspeed (point-of-sale system) offer special rates. These charitable discounts can help you save, allowing you to allocate more resources directly toward your cause. 

XP are experts at obtaining these rates for our clients. You could save thousands of dollars very easily (yay!). 

Case Study: Saving a client $650 

ILS was also unaware of the charitable discounts available for their software subscriptions. We helped them secure discounts for Xero, ApprovalMax, and Lightspeed, saving them over $650 annually. 

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3. Leverage Xero for Cash Flow 

Did you know that Xero, an accounting software, has features designed for managing cash flow? This tool helps you keep track of your income and expenses, ensuring that your organisation stays financially healthy. We've helped many organisations implement Xero’s advanced features, and we stay up-to-date with the latest certifications to help you get the most out of this software. 

4. Go Paperless 

Still dealing with paper-based receipts and bills? It’s time to make the shift to digital. Going paperless not only ensures that you never lose important documents, but it also streamlines your approval processes, making everything run more smoothly and efficiently. This is especially beneficial during remote work situations, where physical access to documents may be limited. 

Plus - nobody wants to use a shredder anymore, it's 2024, people!

Case Study: 50% Faster Approval Process

Another valued client – Paralympics New Zealand struggled with paper-based receipts and bills, which slowed down their approval processes. Additionally, during COVID, they lost access to all their files as they could not access the physical copies. We digitised their entire system, resulting in a 50% faster approval process and more accessible records during remote work. 

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5. Invest in Financial Management Tools 

If your current financial systems are outdated or holding you back, consider investing in new financial management tools. For example, a Point of Sale (P.O.S.) system that integrates seamlessly with your accounting software can streamline transactions and financial reporting. Customised approval rules or specialised accounting tools can also improve efficiency and accuracy, helping your organisation thrive even during challenging times, like staff absences or economic crises.  

Upgrade Your Financial Tools 

Conclusion 

By implementing these strategies, your nonprofit can enhance its financial management practices, ensuring long-term sustainability and a greater impact on your mission. 

Ready to elevate your nonprofit’s financial management?

Reach out for a no-obligation chat about your financial goals and discover how we can help you achieve them.

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