The Benefits of an Audit for Your Nonprofit
In this blog, we will discuss the benefits that come along with your nonprofit having an audit
An audit can seem like a scary term, one that drives nerves up and down your body. You start thinking about all the documents you have to gather and all the items you have to tidy up. Mentally envisioning how you will answer certain questions that the auditors will ask. Yes, there is without a doubt that an audit is a process that is time-consuming and will require a great deal of effort to complete. You can check out how to do these processes and how to do them more efficiently by checking out our other auditing blogs here. However, no matter how daunting or long an audit may be it does come with benefits.
An audit is an examination of the financial information of any entity, and with that will come feedback about where your organization stands in regard to your finances. It can serve as a guide for the improvements that you have to make and it will help your organization in the long run. These are the benefits that come with your organization’s audit:
Quality of Your Internal Controls
Every organization has its own set of internal controls in place, but do you know how effective they are? Throughout the course of a year and even longer it is easy to get caught up in finishing the work that has to be done and forget about the quality of your internal controls. An audit will provide you with insight as to how things are running within your organization and will help you make the right decisions on how to move forward.
Do you keep the same procedures in place? Do you make minor adjustments? Do you do a complete overhaul? These are the questions that can be answered with the valuable information that will be provided to you from the audit. A great step after an audit would be to read the management letter you get from the auditors and sit down with decision-makers within the organization to discuss how operations can run better.
Providing an Outside Perspective
Having a clear and objective pair of eyes reviewing how your organization is operating is quite a beneficial situation to find yourself in. It is one thing to do an internal review with your own employees and or volunteers, however, there are always certain biases that exist and it is much harder to critique your own work than someone else’s.
The auditors will go into the process with any preconceived notions and will be able to evaluate the organization through an impartial lens. Whereas if done internally, who knows what information can be overlooked? It is good to do internal reviews periodically just to make sure things are running efficiently and that you can make changes every now and again to ensure operations are running to their most effective. However, getting an outside party’s thoughts is what will help your organization truly improve.
See Where Costs Can be Saved
Having an accounting firm help you understand the feedback of the audit can prove very beneficial and guide your organization to new heights as there is very crucial information that you can receive from the auditors. By having access to your financial records, they can see where your money is going and how it is being utilized. As a nonprofit you want your money to be used to the maximum extent to support your cause to the best of your ability. The better money is spent, the more lives that can be improved.
By using the data given to you from the audit, you can pinpoint where cost-saving methods can be implemented, this can be done efficiently with the help of an accounting firm. When you save on costs it also is impressive to potential future donors as many people who would like to contribute to nonprofits want to see their money is not just being burned. They want to see their donations are being used wisely and efficiently towards furthering the organization’s cause. Doing this will impress current donors and set up more down the road.
An audit will always be a word that lets a bell go off in our heads, whether it be a reminder to get things in order or that time will have to be committed to it. An audit should not just be seen as a review, but as an opportunity as well. Your organization will gain information that will improve operations and efficiency. Be sure to make the most of your audit and the knowledge taken from it, do not dismiss the positives that come from one. It very well could be one of the best things for your organization.
If you have any questions on how MBSATA can help your organization during the audit process, reach out to us at firstname.lastname@example.org