Case Study

Supporting an Organization Through Change

SUMMARY/OVERVIEW

How BDO Helped a Nonprofit Overcome Finance and Accounting Growing Pains

A nonprofit’s success depends largely on the financial resources that support the efforts of its dedicated staff. For one organization, a large grant improved its ability to assist its constituents, yet it also triggered major changes to grant management and general accounting policies. Outsourcing finance and accounting functions to a new provider ushered in fresh approaches intended to overcome both new and recurring challenges.

Key Takeaways

Increased grant management efficiency and cash flow management

Updated the client’s technology and improved financial reporting

Improved ability to budget and forecast despite funding changes  

The Challenge

A Major Award Brings New Realities

In conversations with BDO's outsourcing team, the client's leaders pinpointed finance and accounting challenges in several key areas. When the client's finance and accounting provider struggled with the new challenges, leaders turned to BDO.

The Approach

Using a Holistic Strategy Brought Improvements on Several Levels

Our team listened as executive leadership described the client’s financial pain points, including the lack of visibility on spending at the project level. While reviewing existing processes and procedures, we also considered the client’s future finance and accounting needs. 

In response to the shift in funding toward increased government resources, we recommended adding new dimensions to grant management processes. A standardized review process, together with a dashboard tailored to this organization, would enable better revenue management regardless of the revenue source. 

In addition:

  1. For the new grant, BDO’s team gained an understanding of reporting and cost allowability, then shared what they had learned with the client’s internal teams.

  2. For general finance and accounting functions, our team responded to the client’s desire for better financial reporting. Our accounting professionals reviewed the organization’s chart of accounts and recommended relevant changes. Additionally, we created a cash flow projection report that enhanced cash flow management by giving the client a 12-to-18-month view of its revenue and expenses. 

  3. To improve the organization’s technology, our team recommended upgrades and the implementation of best-in-class technology. These technological enhancements were designed to better equip the client to handle both current and evolving finance and accounting concerns.

A man giving a presentation
The Results

A Multi-Pronged Approach Yielded Results

With our assistance, the client has improved its finance and accounting functions across the organization.

  • Overall, grant management has improved and triggered additional benefits.

  • As our team cleared the backlog of work related to the new grant, the client’s accounts receivable outlook rallied. This led to better cash flow management.

  • The updated chart of accounts and clear reporting requirements have resulted in greater transparency for stakeholders. 

  • Streamlined finance and accounting processes, as well as the new dashboard, have made financials easier to understand and have improved efficiency for the client’s internal teams.

  • The client can use its cash flow projection report to develop practical budgets and identify potential funding gaps. This, in turn, will help shape the client’s fundraising goals and support financial aspects of all its projects.

Change within an organization can often reveal challenges in other areas. For our client, a welcome infusion of new funds prompted an assessment of its current finance and accounting functions. With the help of our experienced team, the client overcame existing challenges and enhanced its financial management, enabling it to continue serving its communities.

Our work with this nonprofit client extended beyond addressing immediate challenges. After receiving a large grant, the client requested our assistance to improve its grant management. In response, we streamlined existing processes and built new capabilities designed to promote long-term success. Our team developed a customized dashboard that enhanced grant management and created a cash flow projection report, providing the client with tools that support informed decision making and improved resource management. We continue to support this client as its outsourced accounting and finance provider.
Henry Lopez
Assurance Managing Director, Accounting Advisory & Outsourcing, F&A Outsourcing