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The Key to Overcoming Nonprofit Accounting Challenges

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Nonprofit accountants face a tough situation: they must meet strict demands from donors while not overloading their organizations with overhead. Donors want detailed tracking and reporting for restricted funds but also want to keep administrative costs low. This creates a challenge for CPAs who help these nonprofits.

During a recent webinar, Srikar Chinam, CEO of KarmaSuite, shared how accountants can assist nonprofit clients in alleviating the administrative burden of grant management with the right technology.

The Nonprofit Accounting Challenge

Traditional financial models fail in the nonprofit sector. Srikar explains, “In the nonprofit world, you can’t just calculate revenue minus expenses equals profit or loss because your revenue is restricted and might not align with your spending plans.” 

This mismatch leads to three primary challenges:

  1. Labor-Intensive Grant Management: Each donor has unique budget categories and terminology. For example, one might separate “staff salaries” and “staff benefits,” while another labels it “personnel.” Finance teams spend countless hours manually adjusting data to fit each donor’s requirements.
  2. Optimizing Fund Usage: Program teams may overspend or underspend without clear visibility into grant restrictions, causing constant reallocations. Nonprofits often scramble to spend grant money before it expires while lacking funds in other areas.
  3. Difficulty in Forecasting: Restricted revenues that don’t align with operational needs make forecasting nearly impossible. This leads to fundraising teams overfunding certain programs while underfunding others, thus resulting in unrestricted funds being used up sooner. 

These issues can lead to serious consequences. If you don’t track and document your expenses properly, you may have to return grant money. This is often accompanied by word spreading around on how your nonprofit was the reason why the donor couldn’t meet their impact goals for the year.

Transforming Grant Management with Technology

By using systems like KarmaSuite, nonprofits can simplify their compliance processes and make tracking expenses and reports much easier and more efficient.

Centralized Fund Repository

A centralized system acts as a main reference point for all information related to grants. Instead of setting up complicated sub-accounts, organizations can connect categories specific to donors with standard accounts. Srikar highlights that many government grants need clear explanations on how the money will be spent. The system automatically ensures that these guidelines are followed, making sure that funds are used correctly.

Real-Time Compliance Monitoring

Automated systems can quickly spot mistakes. In a demonstration, Srikar explained how an expense, which was mistakenly linked to a City of Oakland grant, was flagged right away because it didn’t match the related program. This kind of immediate detection helps avoid expensive errors that could be noticed later during audits.

Streamlined Reporting

Automated reporting takes the hassle out of handling data by removing the need for manual changes. This means organizations can quickly create reports tailored for individual donors, and those involved can easily access current information without changing anything, which lightens the workload for finance teams.

Automated Allocations

The only way to show the donor you’ve been compliant with grant restrictions is to manually allocate each expense to a funding source. This is extremely tedious and complex due to grant restrictions and grant expiration dates. KarmaSuite translates all grant restrictions into mathematical equations, understands the context of each expense, and allocate 100’s of expenses in seconds.  

With this automation, accountants can shift their focus from managing details to providing strategic advice. This helps their clients improve the way they manage grants and make the most of their available funds.

Enabling Strategic Decision-Making

The real benefit of these solutions is that they help people make better decisions based on data.

Quick Scenario Modeling

Imagine a board meeting where someone brings up the possibility of a $1 million grant from the county for a new location. “Previously, you’d have to get back to them in weeks,” Srikar says. “Now, you can add expenses for the new location, include the pending grant, create a scenario, run the allocations, and see your funding gap—all during the meeting.”

Visual Indicators for Funding Gaps

KarmaSuite uses color-coded indicators to highlight areas needing attention:

  • Red: Funding gaps
  • Yellow: Expiring excess funds

This level of detail helps organizations see where they have extra resources or where they might be lacking, even within the same program, due to specific rules tied to their funding.

Strategic Fundraising and Planning

Organizations can explore different future scenarios, from cautious to hopeful, helping them plan for a range of possible outcomes. This ability changes how they approach fundraising, allowing teams to focus on specific needs instead of vague targets. When they need to ask donors for adjustments, they can use clear data to explain exactly what changes are needed and why.

These tools also help accountants become better advisors, guiding their clients on how to make the most of their funds and ensure that their financial activities align with their mission.

Turning Compliance into a Strategic Advantage

By using comprehensive financial management tools, nonprofit organizations can turn the challenges of managing grants into a valuable opportunity for growth.

Benefits for Nonprofits

  • Improved Compliance: Centralized management ensures adherence to all donor restrictions.
  • Reduced Administrative Overhead: Automation eliminates manual tracking and reporting.
  • Enhanced Decision-Making: Real-time data supports strategic planning and resource allocation.

Opportunities for CPAs

  • Strategic Advisory Role: Shift from compliance monitoring to providing strategic insights.
  • Optimized Fund Usage: Help clients make data-driven decisions to maximize impact.
  • Mission Alignment: Support clients in aligning financial practices with their core mission.

Watch the Webinar for More Insights

Excited to see how KarmaSuite can change the game for you? Check out the complete Earmark Expo webinar! Learn how you can assist nonprofit organizations in managing their grants more effectively.

How Modern Inventory Systems Help CPAs Unlock New Advisory Roles

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“I don’t deal with inventory clients.” If you’re a CPA, you’ve probably said or heard this before. The complexities of tracking materials, managing production processes, and maintaining accurate costs have long made manufacturing clients daunting to serve. But what if the very challenges that once deterred you could become your next big opportunity?

On a recent Earmark Expo, Kendrick Hair, Chief Evangelist at Fishbowl, showcased how accountants can help their manufacturing clients navigate their digital transformation while maintaining financial control and compliance. 

Traditional manufacturers are rapidly transitioning to omnichannel sales—selling through platforms like Shopify, Amazon, and even TikTok. Amidst this transformation, they face new hurdles in maintaining precise cost accounting and regulatory compliance. Modern inventory management systems like Fishbowl are bridging the gap between complex manufacturing processes and digital commerce, creating unprecedented advisory opportunities for CPAs. 

Understanding Modern Manufacturing Needs: From Complexity to Opportunity

Kendrick explains, “I talk to accountants all the time who say, ‘I don’t deal with inventory clients.’ The reason is they find it too difficult to handle. Inherently, inventory isn’t that hard; it’s all the moving pieces that make it complex.”

These “moving pieces” vary by industry:

  • Food and Beverage Manufacturers: Require lot codes, expiry dates, and recall reporting to meet FDA standards.
  • Healthcare Companies: Need serial number tracking and HIPAA compliance.
  • Government Contractors: Must track specialized labor costs for different task categories, with negotiated rates for tasks like welding and painting.

Understanding these industry-specific requirements for CPAs presents an opportunity to provide strategic guidance. Modern inventory systems can manage these complexities while maintaining precise financial reporting and compliance accounting records.

Enabling the Transition to Digital Commerce

The complexities of traditional manufacturing are now intersecting with new challenges as businesses expand into digital commerce. Kendrick notes, “What we’ve seen—and probably what all of you are seeing—is that folks aren’t just selling one way. Traditional manufacturers who for 20 years have done what they’ve done, now they’ve hung a shingle, and they’re selling on Shopify, Amazon, TikTok Shop—wherever and however they can promote their business.”

This shift creates new inventory management challenges. Consider a Fishbowl client who sells vintage Nike shoes. When a rare pair sells on eBay, it needs to disappear instantly from their Amazon listing to prevent double-selling. Real-time inventory management across multiple platforms requires sophisticated integration—something traditional manufacturing systems can’t handle.

Fishbowl addresses this through native integrations with major e-commerce platforms, enabling real-time inventory syncing across all sales channels. The system handles everything from order receipt to shipping label generation while maintaining the detailed tracking needed for regulatory compliance and cost accounting. Mobile integration for warehouse operations allows efficient picking and packing, ensuring accuracy across all channels.

Understanding these e-commerce capabilities is crucial for CPAs advising manufacturing clients. The transition to digital sales introduces new accounting considerations around revenue recognition, sales tax compliance, and inventory valuation across multiple platforms. Modern inventory systems like Fishbowl provide the control and visibility needed to maintain accurate financial reporting while enabling business growth.

Maintaining Financial Control and Compliance

As manufacturers expand into digital commerce, maintaining precise financial control becomes more critical and complex. This is particularly evident in how modern inventory systems integrate with accounting software like QuickBooks.

Consider a manufacturer of flight control systems for Cessna jets. Their bill of materials contains 37 levels, with each movement requiring tracking to a different asset account for bank reporting requirements. Traditional accounting software wasn’t built for this level of complexity, but modern inventory systems bridge this gap.

“We support more costing methods than QuickBooks does,” Kendrick explains. The system handles standard, average, LIFO, FIFO, and actual costing methods while maintaining detailed audit trails. This capability extends from primary distribution to complex manufacturing scenarios—even NASA’s Johnson Space Center uses Fishbowl to manage supplies heading to the International Space Station every 90 days.

This intersection of manufacturing complexity and financial control presents a strategic advisory opportunity for CPAs. While Fishbowl maintains the “inventory truth” and handles complex tracking requirements, it seamlessly posts appropriate journal entries to QuickBooks. This enables manufacturers to maintain the precise costing and compliance requirements of traditional manufacturing while embracing the speed and flexibility needed for digital commerce.

The Strategic Role of CPAs in Digital Transformation

The transformation of traditional manufacturers into omnichannel sellers represents both a challenge and an opportunity for CPAs. Modern inventory management systems are bridging the gap between complex manufacturing processes and digital commerce, enabling businesses to expand while maintaining the precise cost accounting and compliance capabilities that CPAs demand.

Understanding these systems is crucial for accountants looking to expand their advisory services. From NASA’s space station supply management to vintage shoe sellers managing real-time inventory across multiple platforms, the ability to handle traditional manufacturing complexity and modern e-commerce requirements opens new possibilities for strategic client service.

Watch the Webinar to Learn More

To see these capabilities in action and learn how you can help manufacturing clients navigate their digital transformation while maintaining financial control and compliance, watch the entire Earmark Expo.

The End of Late-Night Spreadsheets: Live Flow’s Game-Changing Solution for CPAs

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Imagine it’s 2 a.m., and you’re still wrestling with spreadsheets because a client made last-minute changes. If you’re a CPA, this scenario might sound all too familiar. The endless cycle of manual updates highlights a persistent challenge in financial analysis: balancing customization with automation.

But what if you could have both? At the recent Earmark Expo, a solution emerged that promises to revolutionize how CPAs handle financial data. Enter LiveFlow, a groundbreaking tool catching accountants’ attention everywhere.

“The solution that LiveFlow offers allows you to create live reports of your QuickBooks information directly in Google Sheets or Excel,” explains Josh Thomas, Senior Product Owner at LiveFlow. For CPAs looking to modernize their financial analysis without sacrificing customization, LiveFlow combines the familiarity of spreadsheets with automated data integration and advanced reporting features.

In this article, we’ll explore how LiveFlow bridges the gap between customization and automation in financial analysis. From seamless integration with existing tools to advanced consolidation capabilities and robust forecasting, discover why LiveFlow might be the game-changer CPAs have been waiting for.

Seamless Integration with Accounting Software

At the heart of LiveFlow’s innovation is its ability to integrate seamlessly with the accounting software and spreadsheets CPAs already use. Gone are the days of endless copy-pasting and manual data entry. LiveFlow directly bridges QuickBooks or Xero and your Google Sheets or Excel workbooks.

Blake Oliver, co-host of the Earmark Expo, shared a painfully familiar memory: “I have a very distinct memory of one time doing it seven times in a row until about two in the morning because I kept having to make changes.” This tedious process of exporting, pasting, and reformatting becomes obsolete with LiveFlow.

Instead, LiveFlow allows you to create live reports that update automatically. “By default, LiveFlow is refreshing your QuickBooks data every single hour,” Josh explains. This means your spreadsheets are always up-to-date without any manual effort.

What about customization? LiveFlow doesn’t sacrifice flexibility for automation. You can add custom formulas, insert new columns, and tailor your reports to your needs. The app allows you to filter data by customer, class, vendor, or location, giving you granular control over your reports. Impressively, LiveFlow retains these customizations even when the underlying data refreshes.

For CPAs managing multiple clients, this is transformative. As David Leary pointed out, “I could see Blake’s problem is magnified if you have 50 clients. Now, you’re doing this over and over across 50 clients.” With LiveFlow, you set up customized reports for each client once and let the software handle the updates.

Simplifying Complex Consolidations

Consolidating financial data from multiple entities or standardizing a complex chart of accounts can be daunting. Traditional methods involve intricate Excel formulas that are prone to errors and time-consuming to maintain. LiveFlow’s consolidation feature tackles this challenge head-on.

“No more formulas,” Josh emphasizes. “You’ve distilled it down to the consolidated accounts you want in your end report.” This approach saves time and significantly reduces the risk of errors.

LiveFlow uses a visual mapping process. You can click and drag to map accounts from different QuickBooks files to a unified chart of accounts. It even handles intercompany eliminations, a notoriously tricky aspect of consolidation.

Perhaps most impressively, the consolidation feature updates automatically when new accounts are added, or changes occur in the underlying QuickBooks files. No more scrambling to update complex spreadsheets every time a client tweaks their chart of accounts.

Transforming Data into Actionable Insights

CPAs need to do more than crunch numbers—they also need to tell compelling financial stories. LiveFlow Dashboards transform complex financial data into visually appealing, easy-to-understand visualizations that resonate with clients.

“We’re really excited about it because, for some people, coding is not their bread and butter,” Josh explains. LiveFlow Dashboards allow CPAs to create professional, customizable dashboards without coding skills. You can select from components like bar charts, line graphs, and KPI indicators, arranging them to build a dashboard that suits each client’s needs. Advanced settings like filtering by vendor or displaying data by quarter provide a level of customization that rivals custom-coded solutions.

One standout feature is the ability to create “snapshots” for static reporting. This addresses a common concern voiced by Blake: “I don’t want it refreshing automatically throughout the month because the period isn’t closed yet.” With snapshots, you control exactly what data your clients see and when, balancing real-time updates with carefully curated financial presentations.

But LiveFlow doesn’t stop at visuals. Its forecasting capabilities take financial analysis to the next level, combining automation with the flexibility to model various scenarios. The cash flow forecasting templates include features like income vs. burn rate charts and runway models. You can input different growth rates and starting financial positions to model various scenarios for a startup client.

“If you’re advising software or startups, then their burn rate and runway are the two most important things to keep tabs on,” Blake points out. “If you can do that for them with live data from their QuickBooks file, you become really valuable as an advisor.”

These tools allow CPAs to offer high-value services like scenario analysis and strategic financial planning. By combining live data with powerful, customizable forecasting tools, you can help clients make informed decisions about their financial future.

Embracing a New Era of Financial Analysis

LiveFlow represents a significant leap forward in financial analysis technology, seamlessly bridging the gap between customization and automation. As Josh aptly puts it, “The beauty of it is sometimes the simplicity of it.” By integrating live data with familiar spreadsheet interfaces, simplifying complex consolidations, and offering powerful visualization and forecasting tools, LiveFlow empowers CPAs to work smarter, not harder.

The implications for the accounting profession are profound. With LiveFlow, CPAs can significantly increase their efficiency, freeing up time to focus on high-value tasks like strategic advising. As Blake noted, “If you can do that for them with live data from their QuickBooks file, you become really valuable as an advisor.” This ability to quickly generate customized, visually appealing reports and forecasts enhances the services CPAs can offer to their clients.

Perhaps most importantly, LiveFlow allows CPAs to modernize their practice without abandoning their hard-earned expertise and customized approaches. It’s not about replacing the CPA’s skillset but augmenting it with powerful tools that make financial analysis more efficient and insightful.

Experience LiveFlow for Yourself

To see how LiveFlow can revolutionize your financial analysis processes, watch the Earmark Expo. Discover firsthand how you can harness the power of automation while maintaining the flexibility your clients depend on. Don’t just adapt to the future of financial analysis—shape it with LiveFlow.