 Welcome back to the nonprofit show. We are thrilled that you're here. This is day four of Power Week, and this entire episode is dedicated to Back to Basics. Beth, you have been a fantastic guest. Not many individuals can do a Power Week every single day. So Beth Farley, CPA and partner at iBailey, thrilled to have you back to talk to us about Back to Basics and documenting those best practices. So again, if you are joining us for the first time, go back and listen to Mondays and Tuesdays and Wednesdays episodes. So much good information here. Nonprofit Power Week is not something that we do often, about five times a year. So Julia Patrick, wanna say thank you to you CEO of the American Nonprofit Academy for allowing this platform for content. And I've always had so much fun joining as co-host. I'm Jarrett Ransom, also known as non-profit nerd and CEO of the Raven Group. Together we have produced over 900 episodes. And again, really excited when we do have these unique opportunities for a non-profit Power Week. So glad to have iBailey with us today. Also glad to have the continued support from our partners, which include Fundraising Academy at National University, Bloomerang, Your Part-Time Controller, Non-Profit Thought Leader, American Non-Profit Academy, Staffing Boutique, Non-Profit Nerd as well as Non-Profit Tech Talk. These are the companies, most of them have been with us since day one and allowed us these opportunities that Beth, you even said to us, they are different than a lecture or really listening into a webinar. So I appreciate you noticing that. And any of you can go back and watch these previous episodes that we've recorded. And even this one now will be up on these platforms in just a few hours. So you can scan the QR code and download the app. You can still find us on streaming broadcast and podcast platforms. I'm a podcast listener, Beth. What about you? Where do you typically consume? I do like to listen to the podcast. I kind of change it up just depending on which ones they're popping up, you know? But you too, probably the most, yeah. Yeah, same. You know, when I'm driving or exercising, I'm usually listening to podcasts. So all right, well, Beth, again, welcome back. I feel like, you know, we don't need an introduction, but for many of our viewers and listeners, they're probably joining us for the first time. So Beth is a partner at Ida Bailey. You've shared with us over the last several days, a little bit of the intricacies with Ida Bailey, but tell us a little bit about where you're based and if you would, the customers, clients, the sector that you particularly get to work with. Yeah, so I'm based out of the Reno, Nevada office. However, I work with clients all over. So that's kind of the unique thing. As you've said, you know, when you started this, everybody was a little different and then COVID happened and we've all realized how much we can work remotely with a client all over the place. So we work with nonprofits as a firm across the entire United States and some internationally as well. We have locations in about 15 states. We're sort of Nebraska West all the way, but we do still service clients on the East Coast as well. I really have loved a lot of different nonprofits and worked with a variety of different ones. I think one that I really find interesting is community foundations. Those are so unique in how they service the communities that they're in. So that's always a fun one to work with. But really, I mean, any kind of nonprofit, they just really enjoy working with because I love to see what they're doing for our community and how they're the backbone of our communities. Absolutely, cannot shout that louder. So thank you for saying that. The nonprofit community plays a critical role throughout our globe. So so grateful to have I Bailey in this space dedicated working with these amazing leaders. So again, Beth, you have just wowed us. Julie and I both continue to educate us. So this entire week, you've really taken us back to basics and a big piece of back to basics has been that documentation. So let's dive even deeper, right? Day four of nonprofit Power Week, share with us about documentation. Here's an acronym, TOC and Responsible Champions. First of all, what does TOC stand for? Your table of contents. In this instance, that's what it's gonna stand for. So your table of contents, you wanna have your documentation process organized in a way that it's easily accessible for everybody. That may mean it's all in one document, one PDF, one word. And because you're gonna start with word, but you're gonna probably parent to the PDF, so it's people using it, they're not making changes without the firm, the organization as a whole kind of agreeing to those changes. But maybe you don't have it all in one PDF because that would just be time-consuming to do that, but you do wanna have a main page that shows where everything is. So you're gonna have on there, okay, your counts payable, you're gonna have your counts receivable, you're gonna have your payroll, and maybe those are three separate documents that are being worked with, but you're gonna have one main area that says, okay, here's where they are, and then this is everything that we have, because what if you're new to the organization, you're like, okay, travel policy? How do we do travel reimbursement? And you don't wanna go searching through six different documents to try to find that. And then it'd be really great to have that table of contents that's gonna show what one of the documents includes travel policy. So making it very clear where everything is. I appreciate that so much. One of my roles that I've served in, Beth, is an interim executive leader. And if there is no documentation for me to see or put my hands in, I'm asking so many questions. And if there's a document that I can control F as one of my favorite shortcuts, right? Oh, yes. If I can find it in a document, I think that would really help with the learning curve for new individuals. You talked about yesterday, when we're really looking at perhaps onboarding a new team member, it's not simply because someone's left, it could be because of a promotion. So having these documents available and that TOC, that table of contents. I learned Sally from you, same as last year, now table of contents. I'm more curious too, how do we make it accessible, right? Like what do we need to do to make this documentation accessible? I don't know if it was yesterday, the day before yesterday, you and I both shared, right? Like when we started, yes, these were in three ring binders and they were needed to us. We had flipped the pages. What's accessibility to this documentation look like now? Yeah. So one thing I'm gonna mention too is just your document retention and destruction policy, which should be part of these policies you're dealing with. And we get a lot of questions about how long we should we keep documents? How long this type of document versus this? And there's some policies out there you can get for that. The key important part about that policy or any of your other documentation or policies that you have is that it shouldn't matter if you're keeping that in a paper form in real life or you're keeping that in the cloud, they should be easily found and accessible the same way. So, and what it really drives down to is the IRS had said this too, they don't care if you only keep things as a PDF form. As long as they say, we're gonna go look at this, we need you to go pull it up. Same thing as auditors. If we say, hey, we're gonna audit something and we wanna look at this, we don't want you to have to go digging through and it takes you three months to finally find it because there was no organization to that. So you kind of have to consider the same way that you think about it as like folders or binders on your desktop, on your actual physical desk, you're gonna do the same thing in the cloud. You're gonna have folders and binders, however that looks, that might be multiple different ways depending if you're using software or just the explorer on your computer. But it's gotta be the same thing. So methodology is the same regardless. Like in our advanced technology world and it's only going to advance further that copies are really becoming obsolete, right? Like for me, it's just easier to have a live document if you will, that if there is a process that changed because you talked about having the policy is different than the process, right? So that differs. So I wonder, is that hard copy still relevant? Is that something we should still have or is the digital form like the way to go? I think the digital form is probably the way to go because it's accessible by everybody in your organization as it grows, regardless if you're sitting in the same office or not or if somebody's working from home. So if you have a physical document only and somebody has to come into the office and see it there, then that can delay possibly moving on to the next step or something like that. So I would recommend looking at your organization and determining if you can do that. What you wanna make sure as you're going through these that you don't lose any of that. So, of course, like we talked about is through and bring but let's talk about like an invoice being paid you used to stamp it and somebody would sign it that was paying for the check number and it's all kind of right there to show how it was approved and paid. Now, if you just scan it and it's sitting in a folder, there's no documentation of that review. So you've gotta have some sort of process for that. So everything you were doing in real life, you have to be able to duplicate in the cloud. And so that's the important part. You don't wanna lose any of your internal control segregation of duties because you're moving it to the cloud. Beth, you remember the enter office envelope that would go around and we would have to initial, right? Like, yes, here's the answer. Scratched off a name, put the next name down because they had the hundreds of lines, yes. And I feel like you're right. So how do we mimic that into the cloud? One of my questions I would love to ask you, I know that I Bailey is also doing some fractional work, some operations, accounting, things like that. What is it like to document these processes when we're also working with a fractional entity or even as you mentioned, perhaps a bookkeeper that's not on staff per se, what does that look like by way of documentation? So one of my favorite ways is using a software that can do that for you. So if your accounting program does that for you, if not, there's lots of different softwares out there and I don't wanna highlight one versus the other but there's a software that you can utilize that you scan the invoice in, then the person who puts that into there puts what account number it's gonna be posted to and classification or whatever else that detail is. Then you can have it assigned to somebody that it's gonna be advanced to, they can approve it. Once it's been approved, then it advanced to your signer and then the signer can actually push it forward to get paid and those systems, I mean, it's kinda like paying your bills through your bank. Like most people are familiar with that, it's similar to that, but the software allows the approval to be documented as well. And so those are really great systems because you're not having to send an email that says I approved this and somebody has to print that email to a PDF, that can work and that can be one of the things to do that, but then you have to remember every single time to print the PDF and make sure it got approved. Whereas if you have a system that's doing it for you, then it won't let you pay it until that approval has happened, which really puts a good internal control process in there. Now, this might be a curve ball question, but where does automation find its place, if you will, into documentation? Cause as you mentioned, this might be a sample process. I'm sure some of this is also automated. So what role does automation play in this? So there's one of the systems that we have used with a lot of our clients, that you can email that invoice can be directly emailed into the system is there. And then as you're doing that, it exports directly into QuickBooks online. So you're not having to then enter it multiple times because it's sort of doing that for you and you've got that history of the approval within the software, but then you've got the detail also in QuickBooks online as well. So some of those programs can do that. Some are more sophisticated than other, but you really want to evaluate that and determine where that automation, because honestly the automation too in that is that you're not having to print a check and go find signers, go track them down for physical signatures and get that in the mail. The software is doing that for you, which does save a significant amount of time. And we saw that a lot of clients adopt that during COVID because they couldn't go physically get the signers anymore and they've just kept it because now they don't have to pay for those checks. That's why everybody's like, well, there's a cost to it. Well, yeah, but you don't have to pay for the check or the stamp. So you've saved some money there. Balance is out and there's a lot of distributed workforce now. So even past the height of the pandemic looking at distributed workforce, having the documentation, having it accessible, all of that is really so, so very important. So let's talk about, you know, what about reviewing documentation strategies? How does that show up? And what are the things that we need to do to really review the strategies of documentation? Yeah, so you wanna make sure that it's being reviewed, we say as a minimum annually because things can change within that year. The other way at times that you're gonna have a minimum change needed is that if you add a position or remove a position that's part of those key internal control processes that you have. And this is, I know we mentioned briefly the word champion earlier, you know, there should be a position within your organization that is and has the full responsibility to make sure that this is being updated on an annual basis. They're not gonna go through and write all the words for each one of them, but they're gonna be the person who says, okay, AP department, have you looked at yours this year? Okay, payroll department, have you looked at yours this year? And there may not be changes. If you've not had any changes, maybe it's just, okay, yep, we're still doing all these things and we're following it or shoot, we kind of stopped doing that six months in. We didn't realize that we were supposed to be doing that or it didn't work because this changed, let's change what our process says. So it really helps to kind of keep everybody on their toes of what their responsibilities are. But you gotta have that one person who says, I will make sure this gets done every year. Yeah, that champion, where is the board? Again, I have loved every time, Beth, that you've brought up the board responsibilities, the fiduciary agent, the governing body, where does the board fall into this when it comes to, that strategy and the champion piece? It can be very different depending on the size of the organization or the board, but let's talk about one that maybe has an executive committee or a finance committee. It can be named different things depending. So that's probably the first place it's gonna start at the board level is not the full board. You're gonna have a committee and maybe that committee is part of their decision, their annual budgeting process. They talk to the executive director or the CEO about that and says, okay, what have you done to make sure? Where are we at on that? And that could be part of it too because the CEO is probably doing reviews for multiple individuals, annual reviews within the organization, but that CEO position needs to be reviewed and the new salary evaluated by the board have they met their goals? And so maybe that's part of their process during that time period that says, that's one of the checklist things. Have you guys reviewed your policies? Is there any concern over policies? And board members, they're doing this in their businesses. I mean, most board members are only volunteer and that's the only thing they do. So they're seeing this at different levels. So they should bring forward, hey, we just did this in our organization, are we doing this as well? So using their business sense, that's why you have board members because they have a lot of expertise. You know, we talked about earlier in the week really the maturity of different organizations because documentation and processes, right? They evolve as organizations evolve. And I imagine as well when the skill sets of the board members come in and they differ as well, how much of this documentation strategy changes throughout the maturity and the evolution of a nonprofit? Because as you know, Beth, there's 1.8 million nonprofits registered in the US currently, but there's more coming to the table. And as a new one comes, they're setting up, talk about back to basics. They are setting these processes up. So this isn't a one size fit all, is it? No, not at all. Because if you have a new nonprofit starting up, you've got an individual who probably came up with an idea that they saw a need in the community. So they created this nonprofit, they've got several of their people that they know to join the board. So maybe you've got a six person board to start out with, you know, kind of on the smaller side, that one person is doing the bank recs and paying bills and, you know, whatever it is, they're not getting paid at the time. So there's no payroll, but they can't do that alone because if they're doing everything on their own and nobody's looking at anything, that is very high risk for that organization that there's just gonna be mistakes or, you know, something terrible happens. So the big F word, the fraud word. Right. So the board members have to be very involved in that. Probably all six of them have some sort of duty that comes along with maybe daily activities. They probably have a fundraiser. They have somebody who's, you know, double checking that the reconciliations are done. There's somebody helping out with the 990. You know, they've got a lot of different things with those board members. They've got a ton of responsibility. And when you look at that 990 and it shows how many hours those board members are spending per week, the smaller the organization, the more those hours are. And then you hire an outside accountant to do the bookkeeping a couple hours a week because you've gotten big enough. Now the person, the main president maybe is overseeing the bookkeepers, but they're still talking about it with the rest of the board, but they're maybe not doing as much. And then you hire your first employee and now they're kind of overseeing, you know, whatever the day to day operations and the board's still checking in with them. And probably signing the checks. Cause if you're paying the bills, you shouldn't be signing your own checks. You know, so it can grow and evolve. And that's why you can't just adopt a process and hold on to it forever because too many things change as you grow. Yeah, way too many things change, right? I mean, there's a lot of elements into that change. We're coming up on our final time, but I want you to really talk about this key topic as well, which is the naming conventions, as well as consistency. What are we talking about here? So I'm going to have you visualize a binder with different, you know, let's go back to your trapper keeper, right? And you've got all the different classes you're in. Right. Yes. So you have the different folders within that. We're going to kind of create that within our computer system as well. So you've got a folder that has, you know, 2023 and then you're going to have months underneath those potentially. And those months, I would personally, I really want you guys to think about how easy is it to find? And when you go January, you know, February, March, April that's not alphabetical. Our months are not alphabetical. So when you put it, when you put the month name on it it can be harder to find that in the right order. So if you do, you know, January is 01 or maybe July is your first month too, 01. You know, you do one, two, and then you put 01 January 2023. Very clear that this folder is now for January of 2023. It's easy to find. And you want to spell it out the same way. You don't want to do this one as a J and then January, J-A-N, and then January fully spelled out. You want that consistency that says how you're going to name these. That makes so much sense. So much sense. I love, I appreciate the Trapper Keeper having a feeling you and I are same generation here. Absolutely love that. You know, I have had my hands and I'm sure you have as well in a lot of organizations systems, right? And how they have, gosh, just as you mentioned filed these documents, they are all over the board, right? There's often inconsistencies. There's often a very structured manner of doing this. And I love that you're bringing up these opportunities to be consistent. But how do we start? I mean, can we, can you give us a tip on? It does seem very overwhelming. And I think it's really hard when you go into an organization and there's never been an organization. And so then you're like, okay, what do I save? And how do I put it together? I would start with it. And is it worth saving? Like, is this the document that we save? Is this the process? Right, right. What I have done sometimes is I've gone in and I've put everything that I'm not sure in into an, I'll just say unsure if we're keeping folder. You know, I'll name it that and I'll just start putting things as you start to organize it. So that if you're missing something you can go search that folder but you know that maybe going forward you're not going to need that. But I would start minimum you've got to have everything by a fiscal year. You know, you've got to have your organizing documents by fiscal year. Those are everything you've deposited everything you've paid everything you've done payroll for. But then you also need to make sure that you're keeping those long-term documents. So these are your permanent documents articles of incorporation, bylaws. Those should not be in the year that you started or in a specific year because you cannot get rid of those. Those are some things that you always have to keep. So you need a permanent file. So at a minimum you're doing year permanent file. That's like the basic, but it's a good place to start. Then you can add to it as you grow. Yeah, you know, I really see this as strengthening a muscle, right? Like once we do it, we're going to keep doing it keep doing it and then it becomes habit. It just becomes part of our standard operating procedure which is really something we're looking to do. Beth again, you have brought so much insight. You know, I don't want to make light that this is a back to basics. So for some of you, it might seem remedial, but truly I find often, Beth, that we jump, we nonprofit leaders, we jump to that next phase and we don't always take the time that we need because we're too busy, right? There's too much on our plate. There's too many things that we need to do. So this entire week has been fantastic. We're not done yet. We have you back tomorrow. And I'm excited for that. But please do go back and watch the previous episodes of this week. I have my notes here where we've talked about, you know, critical information to document. You brought great insight on that. Documenting your way to success. So there was even more information there. How do you get the staff, you know, to participate in this? Where do you start? And then yesterday was all about avoiding risk and you're right, we talked a little bit about the F word fraud and what that looks like. So thank you for bringing this to our attention. It's always fantastic to have you with us in Ida Bailey. Please check out Ida Bailey's website. There is phenomenal information on their website, tons of resources. You can find that at IdaBailey.com for those of you listening. That's E-I-D-E-B-A-I-L-L-Y.com. And Beth Farley has joined us day in and day out this week, so extremely grateful to have you and your skill set. Beth Farley is CPA and also partner at Ida Bailey. Thrilled to have you for this non-profit Power Week. Also wanna say thank you to our amazing sponsors that allow us this platform to have a very unique opportunity, which is a non-profit Power Week. If you joined us earlier, you learned, we don't do this often, maybe about five, possibly six times, you know, throughout that calendar year. But thank you to our sponsors, which include Bloomerang, fundraising academy at National University, your part-time controller, staffing boutique, non-profit nerd, American non-profit academy, as well as non-profit Tech Talk. These are the companies that allow us these very casual and style conversations. So Beth, you have been wonderful, thrilled to have you with us today, thrilled to have you back tomorrow. Yeah, thank you. It's been an honor, thank you. For all of you that have joined us, we really appreciate it. We hope you'll come back again tomorrow to hear what Beth has to say. There's still more, believe it or not. I mean, she's given us so much already and there's still more. So, Beth, as we sign off every day, we use the same words, but they always sound a little different. And we invite all of you, our viewers, our listeners and including our guests to please stay well so you can do well. Thank you, Beth. Have a fantastic day.