Monday, June 14, 2010

Changing Treasurers = Loss of Accounting Records?

One of the questions I am regularly asked about is how smaller nonprofits keep control of their accounting records when treasurers change so regularly – usually every year.


Issues I have been asked about include:
  • The Treasurer uses his/her own accounting software on his/her home computer. In this case how does the board control the security of the information (eg. viruses on the computer), loss of the information (eg. damage to the computer hard drive) or the computer being stolen if the house was broken into? There is also the issue of the organisation potentially not using licensed software.
  • The Treasurer does not hand back the accounting records when ceasing in the position. If the only records available are those held by the accountant / auditor it can be difficult to budget for the next year.
  • The Treasurer does not give the rest of the board access to the accounting records. This can mean a number of problems from the Treasurer wanting absolute control, to fraud.
How do you resolve a situation like this? The organisation should consider and investigate online accounting software. Some accounting software (some of which is well known and widely used) is now available online. This means that as one Treasurer leaves and a new Treasurer takes over, the data is available. It also mean that it can be accessed (even if it is read only) by other members of the board, the external accountant / auditor and is backed up properly by the software provider.
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2 comments:

  1. UnknownJune 14, 2010 at 7:22 PM

    There is one lesson learned based on this blog spot: nonprofit organization board members should not allow the treasurer to use his or her own accounting software on his or her personal computer. That scenario will surely cause loss of accounting records. It is wise to use nonprofit fundraising software or SAGE fundraising software from a reputable accounting firm in order to meet the organization's fund accounting, fund raising and payroll/HR needs. Lastly, I agree that investigating online accounting software for possible application is an option.

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  2. neridagillJune 15, 2010 at 10:55 AM

    Thanks for your post about this important topic Lisa. It is indeed why we developed Admin Bandit online accounting software specifically for community organisations. All too often we saw treasurers not hand over the information or using software owned by them which made it difficult to hand on to a new treasurer. Worse still a treasure lost everything in the circumstances you describe. All their efforts wasted.
    Admin Bandit software is located on a secure server in a purpose built building and is also backed up to another server with a different service provider as a double security measure.
    Dropping the financial ball for an organisation can lead to it's demise and online accounting software is a great way to avoid the situation.

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