How to Choose the Right Nonprofit Accounting Firm
Do you need help finding a qualified nonprofit accounting firm? If so, you're not alone. Many organizations struggle to find the right firm for their specific needs. There are many factors to consider when making this decision, such as size, experience and specialization. In this blog post, we will discuss some of the most important qualifications to look for when choosing a nonprofit accounting firm.
Size of the Firm
The size of the accounting firm you hire can make a difference in the quality, personalization, timeliness of services, and cost.
Generally, the larger the firm the more resources the firm will have—meaning that it might be able to handle more complex or unusual transactions more easily. This can be great if something out of the ordinary arises such as a merger or acquisition or the need for a business valuation. Smaller firms may lack these types of resources but can often call on a firm that they partner with or provide a referral for services that are outside their scope of business.
With a smaller firm you are likely to get more personalized service. You may even work directly with the owner such as with me here at Silver Spring Accounting LLC. Because of this personalized experience you may have to spend less time reintroducing yourself and your organization to new staff. This provides can save you time and help cut down on miscommunication.
While we all want to get our work done as timely as possible this can be a challenge for any size firm. A larger firm may often push off work for smaller clients to focus on their larger clients. A small firm may at times find they are understaffed and need to adjust timetables. One thing I can tell you is that being the owner of the firm means that every client's satisfaction is important to me, while a staff at a larger firm likely does not have the same investment in the clients they serve.
Cost can be a major factor when deciding on an accounting firm and size plays a role in the pricing of services. A larger firm will often have higher overhead costs to cover things such as office space, training, employee turnover, events, and various employee benefits. A smaller firm can often provide a lower cost of service because it does not have as extensive of overhead costs.
Experience and Specialization
When choosing a nonprofit accounting firm, experience and specialization are important factors to consider. Accounting firms that have experience with nonprofit organizations can provide valuable insight and guidance when it comes to financial reporting, budgeting, and other areas specific to the nonprofit sector.
In addition, it is important to consider the firm's areas of specialization. While some firms may have individuals experienced with nonprofits, they may not specialize in nonprofits. Many firms simply try to get as many clients as they can and do not specialize in any particular types of clients or industries. This is why I have narrowed the focus of Silver Spring Accounting to only three types of clients. By narrowing the focus, or specializing, a firm is able to provide more consistent quality and knowledgeable service.
Qualifications
When selecting an accounting firm, it is important to consider the qualifications of the individuals who will be working on your account. The staff at the firm should have experience in nonprofit accounting and be familiar with the unique financial reporting requirements of nonprofits.
While it is not necessary to use a Certified Public Accountant (CPA), you may find that using a bookkeeper may not provide you with the same peace of mind. CPAs are licensed by the state in which we practice and must adhere to strict ethical standards. CPAs must obtain continuing education every year which means that hiring a CPA helps to ensure that your financials comply with GAAP.
In Summary
When choosing a nonprofit accounting firm, it is important to consider the size of the firm, cost, experience and qualifications of the individuals who will be working on your account. Consider your organization's current needs and how the organization may grow in the future. The most important thing is that you are comfortable with your decision and with the individuals you end up working with.