 We are so glad you're here, the nonprofit show. This week is dedicated to Ida Bailey for a non-profit Power Week. So grateful to have them back. This has been more or less an annual occasion. So thank you to Beth Farley, CPA and partner at Ida Bailey for joining us day in and day out this week as you take us back to basics. And today you're going to share with us how we can document our way to success. So, you know, I witnessed to you earlier, I am not an accounting nerd, I'm more of a fundraising nerd, but I very much appreciate the accounting nerds because they help my life as well. So again, this entire week, Monday through Friday is dedicated to non-profit Power Week. This is a unique opportunity. We don't have these weeks very often. We reserve them maybe just a handful throughout the entire year. So again, day in and day out, we will have Beth with us for this Power Week. Thank you to Ida Bailey. And hey, if you have not joined us before, we are thrilled that you're here. Julia Patrick joins us, of course. She's the CEO of the American Nonprofit Academy. And I'm Jarrett Ransom, your non-profit nerd and CEO of the Raven Group. We are honored to have the ongoing commitment and support from our sponsors that allow us these non-profit Power Weeks in addition to Ida Bailey. So thank you to Fundraising Academy at National University, also to Blumerang, 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 that have allowed us to produce so many episodes. And if you missed any of them, that's okay. We have you covered. You can find them on numerous platforms, which include, you can scan the QR code, and you can access all of our episodes on the app. You can still find us on streaming broadcast, as well as podcast platforms. So I just like to remind you, wherever you binge watch or binge listen, you can listen to the show, watch the show, whatever speaks to you. And feel free to share these because they're free and they are available to your entire team, regardless of your time zone. So Beth Farley, CPA, welcome to you. Thrilled to have you here. Again, for those of you watching, yeah, watching and listening, Beth is a partner at Ida Bailey. So again, just thrilled to have you here this week. Yeah, I'm really excited. I'm excited to talk about this. Accounting is my jam. So I'm excited. I'm always excited to talk about it. I love that we we need that, you know, we need to have our zones of genius, if you will. And so I always love when there is an accounting nerd, because like I said, it really does help, you know, the organization work in such a seamless way. So I'm so glad this is your jam. Yeah, you know, before we get on to this, and we're going to be with you every day. But can you back up a little bit and explain to us what Ida Bailey is and what they do and your piece of it? Because you're a partner with Ida Bailey. You didn't just show up yesterday. So talk to us maybe a little bit about that trajectory and your organization as a whole before we dig in and we start peppering you with all these questions. Okay, great. Yeah, so Ida Bailey is a national CPA firm. We have offices in about 15 different states. We have, you know, close to 400 partners and about 3,300 different employees across the United States. And we service internationally and locally. And we also have an office in India as well. And we work with nonprofits, we work with all types of entities, of course, but my focus is nonprofits. So we work with nonprofits across almost every state within the United States. So even if we're not located there, we are able to. We do a lot of different things. Traditional audit and tax, of course, that's what most CPAs, you know, you think about. But one of my big focuses is working with nonprofits who are looking for outsourced accounting, help with that. And this sort of thing too, let's do some consulting, make sure that you guys are on the right track and following what nonprofits need to do. You know, I love that. And I think that that's what's going to be really interesting about this week, Beth, because, you know, it's not just, okay, here are the files, turn them over and then spit out a document. And, you know, Jared and I are seeing more and more of this just across the board, more of a willingness and a demand, maybe, maybe that's the place to start of consulting and saying, look, we need to educate our, the folks that we work with so we can be better and then get to the heavy lift. And so I think this is going to be a really fun week for us to kind of get into that. So let's go ahead and start right off and have you helping, help us to understand about the whole documentation piece of this. And you always say documenting your nonprofit's key accounting processes, kind of what does that look like in an overview? Yeah, absolutely. So really, when I say key accounting processes, it's, of course, we like to see everything documented. So it's very clear what's happening. But you really want to focus to start with, like, what are the biggest things that have the risk and the concerns and the potential for either reporting something wrong, or having something go missing? We don't like to say the F word, the fraud word, that doesn't occur. So, you know, where are the risks for misstatements for just personal human error too? Because we want to make sure that we're evaluating all of those different things. And, you know, human error is probably more common what we see. And so how do you have people looking at it so that you catch things to correct them internally before they become a bigger issue? How often should we be documenting? And I can't imagine how many processes there actually are that go into this. But is this an annual thing by annual? I mean, what's what's kind of the timeline on that? Minimum annually, you should be reevaluating them. So if you've never done this before, obviously, this is not a one and done kind of project. This is not something that you can start today and end by the end of this week. When you look at all of your processes, because there's going to be a lot of people involved, which I know we're going to talk about. And so making sure that you're looking at all the processes you have, once you have them documented, when you have a change in staff, when you have a change in maybe board members, reevaluating, but minimum, probably taking a good look at it annually. Okay, so I'm going to fess up. When we first met, and, you know, we've done nearly 900 shows, we sit down and we figure out what people are interested in, what we're interested in, you know, all of the stuff. I kind of was like, wait a minute, aren't all these systems already documenting themselves? Like, you know, we're using software, we're using accounting programs and procedures. Isn't that already baked in? And so that's like, for me, kind of a big question so that I can even move move on. Right. So you've got software and, you know, a lot of nonprofits, when I started working with them, they were using Excel when they started. So that's real basic. But then you've got QuickBooks and then you grow up and sometimes you get bigger and you start doing other accounting programs. But what the accounting program is documenting is your general ledger. It's documenting where you posted something. So was this, you know, an office supplies? Was this a salary? But it is not telling you whether or not you posted it correctly, whether or not what the supporting documentation that proves that it was posted correctly. It also doesn't document who reviewed it to make sure that you had two sets of eyes on certain things. It sometimes doesn't document a reconciliation. So QuickBooks, let's take that one because I know that that one's pretty common for nonprofits. You could do your reconciliation within the program. And so then that's documented, you've done your bank reconciliation. But what about you, you're looking at prepays. Have you documented that? What does that look like? Sometimes that's not inside the system. So you've got to understand your program, what it can and can't do and make sure that well, yeah, you've got the end result. But what went into that? Where is that documented? And I'm curious too, if all of this is super important for audit, assuming we're having an audit at the end of the year or perhaps a financial review, do these processes and the documentation of them best show up at that time as well? Yeah, it definitely would. And it's not just I'm going to take even a step further back because I want to make sure that everybody's included. So in certain states, you're required to have an audit if you're over certain levels. In certain states like Nevada, there's no requirement to have an audit. So you may have nonprofits no matter what level they are that never have an audit. You still have the IRS. The IRS can still come in and do an audit. A grantor can look at something. So even if you think you're not having a financial audit, you've got to maybe prove some of these things. And so, yes, that's where it's important is that you're making sure that you can provide this support when somebody requested internally or externally. What if, you know, you guys are evaluating a program or a special event? Do you have something to show, you know, okay, this is why we think we had this many, you know, attendees or this is why we had these expenses and they weren't, you know, the salaries, they were actually consultants. So you've got support for that. That makes sense. It makes sense. And it's just, it's such an important aspect of navigating the information and figuring out where you're going to go next. And so that kind of leads us to Sally. Explain what that is because this is interesting. So Sally really comes from my audit background. That's what we use a lot of times. Just do the same thing as you did last year. So same as last year, that's Sally. And we say, okay, we gotta not just always look at Sally. But I think it's twofold. When you come into an organization, you sometimes hear people say, well, we've always done it that way. We've always posted it that way. Okay, great. But maybe there's a reason for it. Maybe there's not. Or you come into an organization and you say, I'm going to scrap everything. And you don't really take the time to understand why maybe at the end of the year, that extra step is needed for end of your reporting or something like that. So understanding, so what I say is, let's look at your year end. Let's look at your external and internal reporting. You've got your 990, your financial statements, you've got your board, you've got your management, your budget. What's the end result you're trying to get to and work backwards versus just saying, well, we've always done it that way. We're going to continue. Or I don't think we need to do it that way. We're just going to scrap it. So really understanding the long term, what you're trying to get to at the end. I was sharing with you, Beth, I had a meeting last week with an all volunteer led organization, although they're over a million dollars. And their processes have been the same for 30 plus years, right? And I cringed a little bit because I think there's so many advancements. There's so much integration, so much with technology has changed. I'm sure that also changes that sally, right? Because even six months ago, processes could be different. Is that right? Well, of course. I mean, and I think we, you know, the standard answer now is like, remember COVID, right? Everything changed. Yeah, nobody's forgotten. But we used to do a lot more things in person. We were writing hand checks, we were going to find signatures. Now a lot of people using online processes to pay bills online. And is that still working for you? Is it not working for you? Is it supporting, you know, your goals at the end of the year? And so you can't, you can't just stay stagnant. Otherwise, you're not being efficient. And you're also maybe not able to do new things. Think about if you can't hire a new staff, but then they find more time. What if they found five or 10 more hours a month? Could they do a new program that you guys are really looking for? So really, really evaluating it so that you can get more, I know, more for what you're already paying for is always the best, right? Well, and you also mentioned that sometimes you walk into organizations and you start to audit their processes. And that's actually not what they do. Tell us about that. Yeah, I had an organization one time before where we started to audit. This was a long time in my career in the beginning, and nothing that they said they were doing, they were actually doing. So they were actually having check signed, blank check signed by board members in advance, right? So that's never a good thing. You always need to have anybody signing the check, see all the supporting documentation. So what had happened is they had written these policies and procedures, you know, 10 or 15 years ago, and nobody's looked at them since then. And so the people as they were trying to, as individual changed, as board members changed, nobody kept continuing to talk about, what am I supposed to actually be doing? What is my role? Yeah, but so then let me ask this question, because who does that? Is it like the treasurer or is it accounting and finance team? Is it is it the auditors coming and saying this? I mean, where does this leadership come from? I guess maybe the better question. Yeah, and it's really going to depend on the organization, Julia. I think that's such a great question. As Jared mentioned, you know, all volunteer organization, you don't have one person who maybe is there all the time who's going to do that. So is that the board of directors? Probably in all volunteer organization, the board of directors going to take that role. Maybe you have an organization with 500 employees, and you've got a CFO and a controller and a CEO, and you've got a lot of different positions. You've maybe got a champion there that's going to take that role. So it's really going to depend, but you've got to have one person who's going to say, I'm going to champion this, but I'm going to dole out the responsibilities to multiple people because if multiple people are doing it, they all have to be a little bit involved to make sure it's documented properly. So as a follow up to that, who would be the best person for oversight to say, yeah, you are looking at the right things? Because when you think of that Sally, she's not just sitting in the third cubicle and they're counting in finance department. Like if you've always been doing what you've been doing, where do you get that guidance to say, yeah, look at this in a different way? I mean, because yeah, you've got to have a champion. I see what you're saying, but where does that champion get that oversight? If you're lucky enough to have somebody who has that experience and has done this before has really, so a CFO. So if you have a CFO, somebody who has that background has gone and has worked with nonprofits too, because I think sometimes what happens is you have somebody who's worked with accounting and other types of organization, but accounting for nonprofits sometimes is slightly different. We're fun, we're unique, nonprofits are amazing, but we're a little different, right? We're quirky sometimes. So do you want to make sure somebody has that experience with the nonprofits as well? And if you don't, then maybe you need to look outside and help you. And every once in a while, maybe you can have somebody actually do it for you by working with you too, because maybe you just don't have the time, but maybe you have some funding that could help with it. So again, I hate that. I know we say it all the time, it depends, but it depends. Well, I have a question that's a little bit twofold, but one, in our workforce, right there, it's ever changing. We've seen a lot of resignation. We've seen a lot of turnover. And within that, Beth, we also see new people come in that say, let me prove my talent. This is why you hired me. What you're doing, we need to scrap all of that. And I'm going to bring in a whole new system that's tried and true through my career. Can you maybe talk to us about both of those? And I kind of see them working hand in hand, because we're having turnover in our accounting teams and departments. And then we have new professionals step in. Right. And it's great to have new professional step in that have experience. But hopefully, they can take a moment and really understand your organization. Because even with a nonprofit, if you've worked for a food bank versus a housing organization, they can be slightly different in what they need. That's the unique thing about the nonprofit industry is you've got everything from manufacturing to service based, right? So really taking a step back. And so maybe your champion is the financial person, but the board, the CEO, the other people should be involved so that they're having those conversations of like, well, we really have to make sure we're meeting this documentation or this reporting standard that we only do quarterly. You haven't seen it yet. So we've got to make sure we're doing this too. That's why it just really has to be a team effort. But if you don't have one person who's pushing the needle, everybody will point to somebody else to keep it moving, right? Like, oh, I was waiting on them to do it. Right, right. Now, that makes a lot of sense, which brings us to compliance, because this accounting is not something that we can do just willy-nilly. We really need to understand workflow as well as compliance. Talk to us about that. And like, what are the eyes we need to dot, T's we need to cross? How can we stay, you know, clean and clear? Yeah. So the first thing I want to mention is your 990. You know, it's so crucial that we're having a solid 990 that is telling your story, that is meeting the IRS requirements, because that's public information and you can go out to various websites and pull that off, even if you're not putting it on your own. So that's, you know, the compliance piece of it and an audit, same thing would be a compliance piece of it. So understanding how the information is moving through the system to get to those. And, you know, understanding where the deadlines are too. So making sure that you're kind of considering the deadlines and who's involved in those pieces so that you know if something's stopping, why it's causing the stoppage. You know, it's not necessarily just one person in one department that's involved. You might have programmatic information that's coming and going to get a report on the 990. Are they doing their part to make sure they're gathering the data as well, not just the financial data too? So understanding where all the information is coming from within your organization and who's supposed to make sure it's getting done. So compliance calendar can be very important. Compliance calendar, I love that as opposed, because we always say, oh, well, you need to calendarize this. But then the reality is, okay, whose calendar? Where does it go? I mean, compliance calendar, brilliant. Let me ask you a follow up to this whole thing. And that is, is that, you know, we hear, especially when we have somebody on from iBailey, we're like audit, audit, audit. I mean, you started off by saying, you know, you have the audit background and everything. It seems to me that this is a completely different discussion and a completely different time frame that when, while we are in the audit process, if we do it or we don't, yeah, that's a different issue. But if we are engaged in that, is it too late or is this when we start? I mean, it seems to me like this is a heavy lift outside of the audit. Yeah, absolutely. And it involves so many other things. So you've got your IT, right? So you've got security that you need to think about with IT, you've got cybersecurity. Are you going to be attacked? Are you going to lose data? Is data being backed up or using the cloud system? So those, everything that touches and, you know, something that iBailey really considers is we're working with clients and we've got resources for a lot of those. So basically, if it touches your financials, we want to talk to you about it because we want to be able to understand all of those different things. Your auditors are going to ask about IT, your accountants are going to ask about that. So it's not also just the accounting program or they finance people, but really just kind of looking at your whole organization, everything that can potentially touch the documentation of your financial system is going to be affected by this and making sure that you're evaluating it. So no, don't wait till your audit. Don't wait till your 990 is done. You know, that you've got to start thinking about that. You really, today, let's start today. If you haven't done it already, let's start today. Yeah. You know, Beth, I just, I feel it's important. Non-profits were changing constantly. We're ebbing and flowing in our revenue. I just got a call two weeks ago from a client I did strategic planning for. He has been awarded over $2 million for the next three years of government funding. Now, I can only imagine that probably changes their accounting systems and processes and a whole new level. And I appreciated so much, Beth, because he said, I believe this funding is going to outgrow our current accounting system and bookkeeping. What do I do? Right? So I know. So that to me, it just makes me think, you know, it's probably not a one size fits all organizations at all times. We probably need to go back into, you know, our systems to say, do we have what we need for where we are right now? Do you see that constantly? Yeah. And what I see probably more often than not, because when you get a $2 million reward, you're, you're thinking those things and you've probably put in some indirect cost into that budget. What I think becomes almost more of an issue is when you're getting $16,000, $10,000 rewards and you're not considering the effect that has on your accounting system, because that can be a really big deal. You know, every time you get a little project here, and especially if you jump into new funding. So say you've been doing private foundation funding and personal and business contributions with not a lot of detail needed when you're doing reporting. Now you've got a state funding or you've got federal funding. You've got a whole nother realm of information that you've got to be collecting and reporting on and rules and regulations you have to comply with. And so you've got to understand that the, you're not just hiring the program people to do that with that $2 million, but what is that going to do to your accounting team to make sure that they're following those rules and regulations and get them the support for that too? Yeah. I think it's such, I love it when people consider that when they get new funding. Like how is this going to affect all aspects of our organization? Right, right. Yeah, absolutely. And you know, we've heard that Julia over the last four years, organizations, you know, have received a huge influx of cash. And then we've gone down, you know, depending on where we are in our funding cycle, but so glad Beth to have you here. I want to also call out that I Bailey has a beautiful website that has tons of information on this website. Now Beth, you're going to be with us tomorrow in the next day and so on through Friday, but please do check out I Bailey's website. It's E-I-D-E-B-A-I-L-L-Y.com for those of you listening. But so many great resources and Julia, you were sharing that the team is going to put these episodes up or tell us a little bit about that. Right. So, you know, I Bailey being such an enormous organization with a lot of different moving parts, they really have a separate part of their website just dedicated to the nonprofit sector. And as you mentioned, Jared, there are a lot of different resources that are free. You do not have to be a client of this organization and they will help guide you and really make you, I think, better informed and so that you can ask the right questions and figure out what it is you need to do. And part and parcel of that is all of these episodes are going to go up into this section of the I Bailey website. So you'll be able to share them. So for example, some of the things that Beth is going to share with us this week, sometimes they're more actionable by the board. And so this might be something where you, here you go, board member, here's the link to this episode or, you know, to kind of move the information around because whether you join us live or not is not the issue. It's the issue is getting the information. And so that will be up on the I Bailey.com website. Beth, you are really cool. I've learned so much from you. And compliance calendar, my favorite thing. I mean, Jared, you know, we talk about calendaring. Have you ever heard of just a compliance calendar? No, but I love learning from the accounting finance team because again, that is not my zone of genius. So really learning what are these resources and tools that can better support the entire team, which supports the entire organization. I just appreciate this. And so for me, really learning more about this, you know, I see this as a wonderful opportunity for all nonprofit leaders because we shouldn't just stay in our lane of genius, you know, like really me learning through you, Beth is so fantastic because of course now I'm like, well, I want to see your compliance calendar. What does that look like? Let's get that set up. I would love to know what it looks like. There's just so many processes that go into finance. I mean, we all touch finances in our personal life, but you know, as we touch them in the nonprofit sector, as you said, Beth, it's a little quirky. It's a little unique. And we need to be mindful of that. Yeah, I love that you say that, you know, you're personal because you think about that your DMV registrations once a year, you know, you can't just like hope that you don't forget that, right? So there's things that we do in our personal life. And if you can extrapolate that to a business and a nonprofit is a business, you know, we've got to make sure we're doing our Secretary of State and all these different things. But we want to keep our nonprofit status. It's so crucial as a nonprofit to make sure you're meeting those requirements in each state that you're in. Right. And every state is different. Yep, every state is different. And I love what you said, Beth, you know, we're all doing different things in the nonprofit sector. 1.8 million organizations in this country have a 501c3 status and no two are alike. And so yet, we do have things that we need to navigate. And this has been fascinating. Part and parcel of this week are every single day we're going to be talking about, of course, documenting your way to success, which is how we started it. But we're going to also be talking about how you set up these documentation protocols and what does that look like? And how do you manage that? More importantly, we're going to be talking about how you get everybody to row in the same direction and getting your staff and your board on that. And then monitoring, how do we really align this process again, starting with that calendar? I see that as one of the tools, you know, but how do you get an environment situated so that this is a natural function? It's a really interesting, interesting process. And we're just thrilled that you've been here with us today. Again, I'm Julia Patrick, CEO of American nonprofit Academy, been joined today by the nonprofit nerd herself, Jared Ransom, CEO of the Raven Group. Again, I Bailey is with us this week for nonprofit Power Week. And this week is really a unique opportunity. As Jared mentioned at the top of the show, we only do a handful of these a year. And we are so grateful to our sponsors who allow us to do this. They include Fundraising Academy at National University, Blumerang, your part time controller, American nonprofit Academy, nonprofit thought leader, but excuse me, staffing critique, nonprofit nerd and nonprofit tech talk. These are the folks that are with us day in and day out. And you know, I think you've kicked us off really well. You've proven once again that CPAs and bean counters can be fun engaging people. Good job, Beth. Yes. We have more personalities, just our love for numbers. I so appreciate it. You know, you mentioned cybersecurity. I believe it was last year the entire week was on cybersecurity. So again, for those of you watching and listening, you can access that certainly through the nonprofit show and probably through I Bailey as well. So if that piqued your interest last week, last year, the week was dedicated to cybersecurity. I learned so very much. And again, it was just fantastic because I also don't play in the IT world very often. And so learning about cybersecurity and the impacts and, you know, how we can safeguard ourselves, just make sure you go back and you listen to that because I Bailey provided so much information on that power week. Absolutely. Hey, we have a last minute question that came in and I want to make sure to our viewer that asks question, we will address it. It goes, it's kind of directed around what is it that we're going to be putting on that compliance calendar and how do we manage that? And so we will specifically address that later on in the week. I don't want you to think that we're not listening or watching what our viewers are asking. And so we're going to dig deeper even into that. Wow, this has been a lot of fun. It's gone by super crazy fast. Yeah, but join us back tomorrow. Beth and Jared and I will continue this conversation and really help our nonprofit organizations understand how they can document themselves on the way to being a successful nonprofit. Hey, everybody, as we end every episode, we like to remind ourselves, our viewers, our listeners, our guests to stay well so you can do well. We'll see you back here tomorrow, everyone. Thank you, ladies.