As a non-accounting person, I'm vaguely aware that accounting can be complicated. Since starting in my ED role about two months ago, though, I'm not sure that our operation is complicated enough to warrant what we spend for a large external accounting firm. This is not related to auditing, which is done separately.
Many more details about our specific circumstances inside.
For general context: one of our part-time staff puts about 10 hours a week into bookkeeping on our end -- issuing invoices, checking that things have been paid, double-checking instructor hours, etc.
We've basically got two functions that seem to be where most of the accounting energy goes:
Payroll
We have two salaried employees and about 20 instructors on casual contracts (mostly as instructors, some have some additional office duties). There are varied pay rates depending on duties (online instruction pays less than on-site, for instance).
We:
Our casual staff all enter their worked hours into a form we manage that details which hours were worked in which categories, on which days. We review that information for accuracy, make sure it is organized in an easy to understand way, and hand it off to the accounting firm.
They:
Transpose what we give them into a payroll system, and remit pay through direct deposit, creating pay slips. They calculate and manage remittances for things like taxes, employment insurance, etc.
Vendors
We have eight monthly payments (HubSpot, our course-booking software, rent, phone, etc.) and ten other services that are paid once a year on varying months (DNS registration, web hosting, Zoom, etc.).
About once every two months, we have expenses that need to be reimbursed (buying food or supplies out of pocket for a tournament, etc.), where employees pay out of pocket and bring in receipts to get paid back.
We:
Receive, scan (if not digital), and upload all invoices to a system called Dext, where we code and categorize each expense.
They:
Publish Dext-loaded transactions to Quickbooks (if we're missing a source document or category, we have to double-check that in a system called UnCat), and then payables are pushed to another SAAS called Plooto.
We:
Log into Plooto and (re)validate all the expenses we have previously submitted in Dext for payment.
Plooto:
Takes the money out of our account, and then over the course of several business days, pays the bills we've approved for payment.
Revenues:
This is pretty straightforward: we have parents who book classes through an online system that remits that revenue regularly into our bank account, minus their cut. Schools pay us by direct deposit or mail in cheques, which we deposit in our account.
Taxes:
Not applicable to us, but just in case anyone was wondering -- registered charity, so we don't have any GST/HST complexities or remittances.
I'm not an accountant, much less a CPA. When I've asked casually about this with some other non-profits, the reaction frequently seems to be "this is something you must outsource, there are so many rules and it's so incredibly complicated to run a non-profit's finances."
This is usually accompanied by "there's no way I could take this on, I'm far too busy," and/or "I have an arts degree and don't do numbers!"
But I'm not sure if this is a legitimate "this takes way too much time and can't be done" or if there's just a general fear of numbers in my very arts-leaning sector.
If our instructors are logging their hours and we're double-checking them before sending, shouldn't a simple payroll calculator be able to pull the deductions, remit them, generate pay slips and direct deposit pay?
If we're meticulously capturing, categorizing, keeping and uploading all receipts and invoices into a system, couldn't we just pay our vendors directly and keep a good spreadsheet / file folders for source docs?
If we know exactly where our revenue comes in and we're getting it all logged and managed by the booking software, and/or have to photograph and document every cheque to deposit it anyway, what's left to manage there?
I'm... just not sure what all the fuss is about, really. If we have a p/t fianance person putitng in 10-12 hours a week prepping all this information for the accounting firm, it feels like we're just 2-3 hours away from being able to manage the payroll remittance / sending the direct deposits; ditto with paying vendors. |
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