 Welcome to the nonprofit show. We are so glad you're here. And if you joined us for our green room chatter, you were privy to the technology challenges that we've been experiencing. Nonetheless, no fear, we figured it out. And today we are excited because we have another esteemed guest from your part-time controller joining us today, Carol Melvin. And Carol joins as a regional director at YPTC. She's here to talk to us about why outsourcing makes sense for your nonprofit. So really excited, Carol, to learn from you. And again, for those of you that might have joined us in the green room chatter, you heard me mention that your colleague, Geraldine Dressler, had joined us previously on an episode talking about the lack of professional accountants and bookkeepers and finance experts. So I'm really excited for this. But before we dive deep with you, Carol, we want to remind our viewers and our listeners who we are, if we haven't had the pleasure of meeting you yet. So Julia Patrick is here, of course. Julia is the CEO of the American Nonprofit Academy. And we have you, my friend, to thank for this amazing platform where I get to serve alongside as the co-host, day in and day out. I'm Jarrett Ransom, also known as Nonprofit Nerd and CEO of the Raven Group. We are truly honored alongside with YPTC to have other amazing presenting sponsors that allow us these opportunities. So thank you to Bloomerang American Nonprofit Academy, Bunraising Academy at National University, Nonprofit Thought Leader, Your Part-Time Controller, Staffing Boutique, Nonprofit Nerd, as well as Nonprofit Tech Talk. Truly many of these companies, if not all of them, have been with us from the very beginning as we marched towards 1,000 episodes. If you've joined us before, we kept touting 900. Well, we've passed 900. And you can find all of these episodes on our archive platforms. So go ahead and pull out that smartphone. I know you're either on it right now or it's right next to you. You can download the app. You can also still find us on podcast and streaming broadcast platforms. And just later this afternoon, you will have today's episode uploaded on these platforms. So Carol, now is when we turn the tables. I want to reintroduce you to all of our viewers and listeners around the globe. So again, today, thrilled to have Carol Melvin with us from your Part-Time Controller. Welcome to you. Thank you so much, Jared and Julia. So pleased to join that esteemed group of fellow YPTCers and all the amazing guests you've had over the last four years. It's really, thank you for this platform. It's a great resource. Well, thanks. It's so funny because just in a little bit more than three years and we're moving in towards our fourth year, the dialogue and the things that we talk about, Jared, don't you agree they've changed so much? I mean, we still talk about like, accounting and finance, but now we're having this conversation about a new way to think about how we even work with these providers. And so let's dig into it first and let's start with what is outsourcing and how does it work? Because this is not just an accounting financing. We're seeing this with HR, we're seeing this with programming, marketing. So give us that overall view, if you will. Yeah, and I love that opening Julia because I hope that people do look at outsourcing as a new way. There's some myths about outsourcing that I hope to bust today, but really talk about there's lots of ways that you can look at outsourcing. So outsourcing, of course, is a business practice where an organization contracts out certain functions to an external service provider rather than handling them in-house. And this is done to leverage specialized services, often to reduce costs, improve efficiency and to really focus on the core business activities, which for our nonprofits are programming and fundraising. And how it works is really, first, a nonprofit has to identify the need. And for many of our clients, they need a CFO, a controller, an accountant or a bookkeeper, but it might not be on a full-time basis. So for some nonprofits, having a permanent part-time solution for their finance and accounting makes sense. And this is where this dovetails with what Geraldine Dressler was talking about on your show not that long ago, about there is sometimes an inability to attract really qualified staff, especially to perform some of those intermediate or advanced accounting. So those are some cases where you might think about sourcing in that sort of permanent part-time way, but there's lots of other ways that outsourcing can address some of the financial challenges that nonprofits have. And some examples of those are annual tasks, such as the upcoming audit. And there's not enough time to get ready or what happens a lot of times is it takes you off, all your regular work that you have to do and you end up getting behind. And that just sort of sets you up to be behind for the next year. So think about outsourcing that audit work. A lot of firms like ours, we're ex-auditors, many of us, not everyone, but a lot of us know exactly what those auditors are looking for and what our audit friends want and need. So that's a great way to leverage outsourced accounting. Another annual task is budgeting. This is something that, whether it's an operating budget or maybe a capital or campaign budget or even your programming budgets, this is something where you can outsource the creation of the budget and maybe even take it to a next level, include scenario planning, cash forecasting. Those are just a few examples of where outsourcing makes sense. This is an interesting comment because I have never, ever, ever, ever thought of outsourcing the budgeting. Have you seen that, Jarrett? You know, I don't know that I have seen it. I've seen an outsourced finance professional and I've seen many YPTC at work that have taken elements of this and budgeting being one of those. But what I really love in this space, Carol, is how the outsourced professional can take perhaps that intermediate expert level task responsibility because nonprofit finances are different, right? They're different and I see this all the time and again, I have just an inkling of accounting experience. I feel like I've learned it via Google, right? And through forums, but really looking at it from there's some really expert tasks that need to happen that not your average Joe or Jill has that experience. And budgeting, Julia might be absolutely one of them. And if you think about someone in-house is only doing budgeting once a year, where you bring out that outside specialist, they're doing that at multiple clients. So they're bringing the benefit of all that experience with them into looking at your budget and helping with that. Yeah, and there's some other examples that we see certain financial challenges. This one is pretty common is the CFO and the controller are getting ready to retire. And there is a need, we're seeing a lot of that. And there's need for that interim support sometimes because we know it takes a long time to find that right person and you need to make a really good decision. So sometimes bringing in an outsourced accountant to help first spend time with that outgoing person and really learn the business and what they're doing and then bridge that gap while you do a very thorough search for the next person and then help onboard that new person and really help train them and set them up for success. So that's a great way to leverage outside support. Caroline, let's skew this and maybe this is on your myth list. I've heard this multiple times, right? Is that, oh no, we can't outsource finance. We need the person in the office eight to five, right? Five days a week, we really need them. And as Julia and I have said before, we need them in the office, but we're also gonna put them in the back corner where the lights are off and there's no windows. We're gonna talk to us about outsourcing and the benefits, whether the person resides on campus or on site versus virtual. Yeah, yeah, that's a great question. And well, there are many, many benefits but one thing you wanna look for in an outsource account is are they going to work with how you work? So if you are working all remotely, can they work that way? Or if you're going to be in the office or hybrid, can they also come in and do that? Because one of the keys to a successful outsource situation is really that collaboration and really working together. You don't want your outsourced accountant to be sitting in the back room necessarily because you want them to understand the business, right? You want, because that's the way they're really best going to be able to help. But when we talk about some of the benefits, we've kind of touched on that expertise and specialization. And what comes along with that is sometimes a fresh perspective. So someone coming from outside, looking at your processes and procedures and maybe your technology, maybe they can bring in fresh light and fresh eyes to look at that and really help bring you along again with the benefit of all their experience. We talked about cost savings. One thing about an outsourced accountant is especially if you don't need full time is you only pay for what you need. What is it? Is it Liberty Insurance that has that? They only pay for what you need, but that's exactly the way it works here. Another big benefit is scalability. So you can add or reduce work without that challenge of hiring or having to lay off employees because sometimes it's just a temporary need or short-term project. So that's a great way to build extra capacity. Also, let's talk about this because you are the finance and accounting expert. So I got a drill down on the money side. And I think, and Jared, I don't know if you hear this as well, but I think a lot of people are like, oh no, we can't afford that. It's gonna be crazy expensive. And what does that look like to you? You said something really interesting that I hadn't thought of in this context. And again, this goes under the umbrella of outsourcing. So whether it's HR or marketing, anything, you can scale this according to what you need. But yet when you have somebody, as Jared mentioned in that dark dank corner in the back, you're like, what are you guys doing over there? You sometimes make work for them. And so kind of what does that look like in terms of saving money or being cost-effective? Yeah, yeah, great question. And that is one, you're right, that is one of the myths that we hear. We'll hear nonprofits say, I can't afford an outsourced accounting firm. But most outsourced accounting firms are firm. We're accountants. We are very conscious of the organization's budget. So we're gonna work within your budget. And we're gonna, we don't wanna bust the budget. So I wanna bust that myth that you can afford it because what you wanna do is figure out what the greatest need is, right? And then direct those resources to that need. But to go to your question, Julia, about does outsourcing save money or increase costs? And outsourcing, it can often be more cost-effective than maintaining an in-house accounting department. Reduced labor costs, you can save money. We know it takes a lot of money and effort and time to hire. So you're not hiring. The trainings, training the staff, professional development is expensive. So these folks from outsourced accounting are coming in with that training and that knowledge. So those are costs that you're not gonna have not to mention benefits. And sometimes, if you're working in-person, avoiding those infrastructure costs like an office space, even if it is a dark dank corner or equipment, they often are coming with their own equipment, right? So you don't have those costs and all of that maintenance as well. And really what you said, Julia, is the flexibility. It allows you to scale up or down as needed. Or an outsourced accounting firm should have that, be able to be flexible with you. And because things change, needs change. We certainly have seen that over the last three years. So you wanna have that flexibility. And that way you can save costs when you don't need that extra help. Yeah. One thing I've witnessed to this space, Carol, truly is bringing in an outsourced expert in the finance accounting realm they expedite, right? Like they're really, they expedite the task. They're often putting in automations, integrating systems, like really coming in to strengthen what could be done, right? That maybe the team that is currently there or the individuals that might have recently left, right? Like didn't have the knowledge. And so I really see where there's actually cost savings because you're bringing in this person at such an expert level, they're bringing also this team of resources, right? To the organization that really strengthened the infrastructure, the tech stack. I mean, there's so much that goes on here. So I know you brought a lot of myths to today's episode. And I agree with you. I think busting the, can we afford this? It's like, first of all, I wanna say you can't afford not to have this conversation about it, right? Like you have to at least invest in that conversation. But let's switch gears now into what does this process look like by way of timeline? So how long does it take the process to really work well? Once we've said, okay, we're gonna do it. We're doing this. Yes. What does it look like? Yeah. So the timeline for outsourcing to really work well, of course it can vary widely, right? It depends on the complexity of the nonprofit and its accounting. It largely depends on what the condition of the accounting records are. I know at our firm, often folks are calling us because things are messy. So if it's going to be messy, we wanna, sometimes we have to get in there to figure out, well, how messy is this? And how long is it going to take? And we try to give an estimate upfront, but sometimes this is where communication is really, really important. And why you don't want your person in the back is you wanna be understanding what, how are they spending their time? These are your resources. You wanna know how are they spending their time and really understanding if we have to refine our timeline and our deliverables. It's gonna take us longer, but like anything, preparation and planning are crucial for a timeline, right? So setting those clear goals, resetting them, like I said, if necessary, and then allowing, nonprofits should allow for some onboarding time. Sometimes our clients think that we can come in and just wave a magic wand, which sometimes it seems like we can and we often do, but if they're in a mess, they didn't get into that mess overnight and it's not going to take, we're not gonna be able to fix it overnight. So if you are thinking about outsourcing, make sure that you're coming into it with realistic expectations that it's gonna take a little bit of time and you want some of that upfront time for your outsourced accountant to onboard, really understand the business so they can be a true partner and a business advisor and not just accounting and finance, but really the whole nonprofit business as a whole. Carol, let me ask you this question as a follow up. Is there like a better time of the year to do this than another? Because what you're saying, it kind of involves the whole ecosystem of how we start our years, how we end our years, how we report all of our compliance. Can you guide us a little bit on that? Yeah, I mean, I would say that any time is a good time to think about this. I mean, certainly if you're up against a grant deadline or all of a sudden you have new federal funding say and you need help with figuring out the reporting structure and the tracking and the monitoring, there's no time like the present, bring someone in to help with that, right? Or if you're looking at a new accounting system, you might think, well, I should wait until after the fiscal year end is over, but really any time that you can bring someone in to start the process, if you're thinking about a new accounting system, you probably wanna have someone help you with the mapping and the chart of accounts and making sure that you have some sort of liaison between the systems specialist and the finance folks. And often that's another opportunity for a firm like YPTC to help with. It makes me think of the quote, right? The best time to plant a tree was 30 years ago. The second best time is today. Yes, that's exactly. Yeah, I love that quote. That absolutely applies. One of the other myths that we haven't talked about yet is when organizations are thinking about an outsourced approach, they often think, well, the outsourced accountant won't work well with my team. And this is really important part of the process when you're looking and considering different firms is how are they going to work with your team? You know, that you want them to be part of your team. And I'll share a little bit of my background before I started at YPTC. I was actually a client. So I hired YPTC to be my controller when I was the CFO of a nonprofit. And I, yes, I, you know, treated my YPTC person and she acted like she was just part of my team. So she was the controller. I had others in my finance team. And I often, you know, would forget even that she was not, you know, not an employee of the nonprofit because she integrated so well. Yeah. And that is such a great story because, you know, I've been an outsourced consultant. Julia, you have been, and I hear you Carol, like there's certain organizations that say, hey, you're a part of us. And then there's others, I felt it, right? Where it's like, you're on a need to know basis at, you know, kind of like push to the side. But really the more we're involved, the better. One thing that I wanted to ask you, how involved should this outsourced finance person be with the board? So with the board and at the meetings, what did you take on that? Yeah, that's a great question. Well, for us, you know, we all, the most important relationship is with that executive director, right? You know, we're often working, you know, with everyone in finance and maybe even in development and we're talking to program people, but really our main contact is that executive director. But the relationship with the board is important. You know, the board has a fiduciary duty to make sure that, you know, they understand that the accounting and finance team are in good hands. So we, you know, it's important for them to talk with the accountants at least once a year at the very least, but probably even more often than that, you know, being able to ask questions, being able to really understand the finances and the internal controls. Carol, I'm curious, this is kind of a crystal ball moment, but we mentioned, we namedrop Geraldine Dressler earlier, right? And we were talking about how there's really a shortage of finance professionals, perhaps because many of them truly are retiring. You know, we've seen this earlier in the pandemic. So many professionals, you know, stayed past what they wanted to stay by way of their own kind of retirement timeline. But I'm curious what your crystal ball is showing as we move forward. We're wrapping up this year, moving into 2024. What are you predicting, right? This is just yours. You're speaking on your behalf, but what are you predicting by way of outsourced, you know, financial experts? Is that something, a trend we're gonna see grow? I mean, what are you seeing in this space overall? Yeah, yeah. I think we are going to see a trend. And, you know, we've been seeing that over the last several years. And I think it's going to continue because, you know, because of that flexibility and that scalability, you know, on the nonprofit side, you know, all nonprofits are really in the last couple of years, they've had to take a really hard look at their budgets and their resources and really being able to, you know, to focus on the things that matter and outsourcing, you know, helps make sense of that. And I think in terms of on the accountant side, I think the accounting profession is sort of getting the message and is, you know, is looking at changing and being more flexible, being, you know, more amenable to work-life balance. And I think that's all positive. Yeah, I need to change. I've gotta believe that organizations that outsource and with their accounting and finance, that might be the first time they've done it. And I've gotta believe that if it's a good environment, they're gonna outsource some other things, you know, all the way from HR to marketing. IT. Yeah, IT part of programming, compliance. I mean, I can just see this really becoming a way of doing business where we didn't talk about it, right? Yeah, exactly, Julia. We see that, you know, often, you know, you're right, the accounting will be the first thing that they will outsource because of that specialization. And then often it's HR, it's IT, yeah, in those things because they can see that it works. And, you know, a couple of those other myths that we haven't hit on yet, one of them is often nonprofits will say, well, we don't have time to train someone, you know, meaning even when you bring an outsource account and they recognize that there is that onboarding process. And that's where, again, when you're vetting, looking at outsourced firms, you know, that's something to make sure that you're understanding, you know, that usually they can get up to speed very quickly because they've been doing this, you know, at so many different clients. And, you know, we like to say, you're not just hiring one person, you're hiring the whole firm, right? So you're getting the benefit of all of that knowledge. And even if your part-time controller maybe doesn't have that specific experience, you've got a firm that has, you know, has that knowledge that can help build that capacity. You know, we've been thrilled to have you come in and share with us Carol Melvin, regional director of your part-time controller. What an interesting, I said, Jared, I gotta believe this is like cutting edge in that there're gonna be a lot of other people that watch this episode or listen and say, yeah, I can do that in other parts of my business because it's such an awesome way to grow or respond to the needs of your business without stressing out about where are we gonna put them? How do we get them on our technology? How do we find the parking space? I mean, you know, all those things that we think about when we grow our nonprofits. Well, even things that Carol mentioned as we wrap up, things like the overhead, right? So like the health insurance, the days off, the vacation, the equipment, right? Like there's a lot that goes into this. So clearly Carol has helped us to bust a lot of myths and also see the benefits of outsourcing and why it makes sense for your nonprofit. If you're interested in chatting with Carol or anyone from the YPTC team, check them out. Their website is YPTC. It stands for your part-time controller.com. Also, if you joined us in our green room chatter, you heard me say that I have been tempted to join these career meetups. So YPTC is hiring, they did not ask me to share that, but I'm always tempted to join those meetups because the team is fantastic across the nation, serving exclusively nonprofits, which again, like really sets you apart because you can hire a bookkeeper, you can hire an accountant, but to hire a nonprofit expert right in that space, that's what really sets you apart. So Carol Melvin, you have been fantastic. Thank you so much for joining us today. We're always lucky because once a month we get a representative to join Julia and I here on the show from YPTC. So thank you for being part of that today. And again, as we wrap up, we wanna say thank you. We're still in the gratitude train and saying our gratitudes. So thank you to Bloomerang, American Nonprofit Academy, Fundraising Academy at National University, Nonprofit Thought Leader, your part-time controller, staffing boutique, nonprofit nerd as well as nonprofit tech talks. So just as you heard from Carol, you will hear from each representative or a representative, I should say from each of these companies every single month. So thank you for joining us today. And as we sign off today's episode, as we've signed off all episodes, well, first of all, we wanna remind you to join us tomorrow because this is a daily broadcast. Thank you. Yes, of course. But also we wanna remind you to stay well so you can do well. Thank you, Carol. Thank you so much.