Most non-profit organizations face the same challenge: a scarcity of resources. Unlike private stakeholder or shareholder value, non-profits create public value, so their investment in technology tends to focus on furthering a core mission. At an art museum, for example, this can mean enhancing the visitor experience and making art more accessible through digitization. Non-profits often lack the funding to take advantage of technology for administrative functions like accounting and finance. As a result, CFOs at these organizations must get creative and invest judiciously in financial technology that is not only self-funding but actually creates numerous opportunities for savings.
Although non-profits have unique reporting and compliance requirements, they share the same back-office needs and functionality as for-profits, and they should take advantage of the multiple tools currently available for this purpose. Some of the best technological instruments perform automated high-volume, “high-touch” manual activities, such as payment processing and cashiering. Vendor payment automation covers all types of payments, including check, wire, ACH, and credit card. Paying vendors by check incurs several additional expenses— mailing, printing, and checks costs—that can be avoided through automation, which also helps save on processing time. In addition, using credit cards to pay vendors creates income potential through cash rebates.
Most financial software companies offer customization, but organizations can maximize both cost savings and earnings potential by using the software as designed.
Automation also has another invaluable outcome: data. The transparency it creates around financial processes is a goldmine for savings and income potential. Non-profits would be wise to automate in these areas before considering investments in tools that specifically address reporting and compliance needs. After all, better data always makes for better reporting.
And not all technology advances are exclusively software based. Cash recyclers, for example, use a combination of hardware and software. The hardware automates the cash-counting function by accepting and dispensing cash, which enables savings by reducing shrinkage. Less cash is needed on hand as the machine “recycles” lower denomination bills for daily needs and stores higher denominations in a cassette. The software then interfaces with banks to provide provisional credit. This results in fewer armored car trips and more interest earned, or less interest paid on borrowings.
Most financial software companies offer customization, but organizations can maximize both cost savings and earnings potential by using the software as designed. Rather that customizing to suit their specific back-office needs and ways of working, they should update their processes, which must begin with getting buy-in from the users. This is not always an easy task; staff members often worry about being made redundant by automation. To counter this, team members should be integrally involved with creation of the new automation processes. Organizations would do well to properly train their employees in the new software and encourage them to learn new skills to enhance their marketability, which will not only allay staff anxiety but also discourage the creation of shadow systems or other ways of hindering the benefits of the new tools. In this case, attrition provides the best potential for savings.
Limited funding doesn’t have to mean using antiquated systems. While large non-profit institutions are not generally known for their nimbleness, any effort put into acquiring and training staff in the use of newer financial technologies is very likely to pay off for an organization’s bottom line.