For nonprofit executive directors looking ahead to yet another audit, it may be worth remembering the author Glennon Doyle’s favorite phrase: “We can do hard things.”
Indeed, audits can be hard. Very hard. But, as we detail below, audits are also doable, if you put in the work to prepare for them.
If you’re wondering when you should start preparing for your next audit, unfortunately you’re already late. That is, you need to be preparing for your next audit all year long—there is no downtime.
If that seems daunting, don’t despair. By integrating year-round processes for audit preparation into your everyday operations, you can avoid the last-month or last-minute scrambling that is stressful and disruptive.
Prepare the right information
To prepare for your next audit, you need to get your ducks in a row, which means:
Discussing with the auditor what they will need and any new guidance or requirements you should be aware of
Collecting all necessary documents, including insurance policies, board and committee meeting minutes, financial management policies, tax exemption letters, grant agreements, and much more
Analyzing, reviewing, and reconciling your balance sheet accounts on a regular basis
If collecting all that information seems overwhelming, don’t fret: There are two things you can do right now to reduce your stress—not only for your next audit but for all future audits.
The first action to consider is investing in best-in-class financial management software like Sage Intacct, which provides comprehensive grant tracking and billing, automated nonprofit revenue recognition, easy-to-use reporting and dashboards, as well as a clear audit trail.
The second stress-busting step you can take right now is to invest in outsourced accounting assistance from a provider that specializes in audit preparation. They can review your financials on a regular basis to identify potential audit issues before they cause any last-minute headaches.
Outsourced professionals can also help you maintain schedules and compile necessary documentation throughout the year, so you and your team can stay focused on mission-critical activities, even when your next audit is right around the corner.
Get the help you need
Insero & Co. is a public accounting firm with over 40 years of experience serving businesses and nonprofits. Our Nonprofit Solutions Group includes Certified Public Accountants who specialize in understanding the needs and requirements of the nonprofit environment and provide traditional accounting services, auditing, and specialized financial consulting and advice.
Do you have questions or want to talk?
Call us at (800) 232-9547 or fill out the form below and we’ll contact you to discuss your specific situation.