Organizations are always having to adapt to changes—new tax laws, new competition, and now, a new pandemic. The budget you thought you’d be running on in 2020 has to change, and you have to make some difficult choices moving forward to preserve, and perhaps even strengthen, your organization.
Following are a few ideas for building resilience into your budget, so you’re ready to adapt to whatever changes come next.
In hard times, the first question to ask is which functions are core to your mission—those are the ones your budget needs to support. Any others that are “nice to have” but not absolutely essential right now might need to be reduced or eliminated, at least in the short term.
Outsource where possible
This is a good time to consider outsourcing internal business functions, such as bookkeeping and accounting. Find out how much such a move would cost and consider the flexibility it might give you to weather future upturns and downturns.
Transitioning to an outsourcing model takes time, so carefully weigh the challenges as well as the benefits. A good outsourcing partner can walk you through the process and help you determine if it makes sense for you, and if so, where and how you should begin.
Build in flexibility
The one thing we know for sure about 2020 is that it’s unpredictable. Changes will keep coming, so make sure that you build flexibility into your budget. You’ll want to run a variety of best-case and worst-case financial scenarios, so you’re ready for whatever may come next. Use a cloud-based ERP software like Sage Intacct to give yourself greater flexibility in running these scenarios.
Look for opportunities
When times are difficult, the natural instinct is to tighten our belt. That makes sense, but it’s also important to look for new strategies and creative solutions. Are there new opportunities to, for instance, reach out to a new set of potential customers or donors, or take certain functions that used to occur in person online?
Learn from others
You’re not alone in this, so look at what other organizations are doing to adapt to current uncertainties and changes. Are there opportunities to collaborate with others? Could you team up to reduce costs, share administrative duties, or reach more people?
Insero & Co. is a public accounting firm with decades of experience working with businesses and nonprofits of all sizes. Our experts deliver customized consulting services, including serving as an extension of our clients’ accounting departments and filling specific positions to meet immediate needs.