Top 10 Money Resources to Save Time and Grow Your Bottom Line

I get asked all the time for the tried-and-true tools that help me run my business efficiently and can help you too, no matter what type of organization you’re running. I’ve compiled a list of the tools I use every single day both in my business and with clients to help them streamline processes and grow their bottom line AND their impact.


Here are my top tools and resources for busy, purpose-driven leaders:


  1. QuickBooks Online. As a CFO, you knew an accounting system had to be first, right? QBO is the perfect system for small businesses and nonprofits alike. It’s easy to use, intuitive (even if you dread your numbers), and affordable for pretty much everyone. Love it.
  2. Asana. We use Asana to organize all of our client workflows and I love how it is structured. I can get different views, like a task list or a calendar view, and this is one of the first tabs I open every morning to help plan my day.
  3. Acuity Scheduling. Every single leader I know is over-scheduled and it seems like half of our lives are spent coordinating meetings. I implemented Acuity years ago and I LOVE sending people my calendar link and letting them choose a meeting time that works. It literally cuts down on dozens of emails a week.
  4. Boomerang. I am a planner and that includes planning emails ahead of time. For example, I know I want to send an email reminder to a client on Monday but if it just sits in my draft folder, I will probably forget to send it, so then I write myself a note on a Post-It and before you know it, my desk is covered in neon squares. With Boomerang, you can schedule emails in the future and it will remind you if someone hasn’t responded!
  5. Gusto. Our favorite payroll provider, hands down. They pay your contractors and employees, handle all of the tax and compliance filings that no one wants to deal with, their platform is user friendly, and customer service is top notch. And they’ve also added benefits, time tracking, expense reimbursements, and vacation tracking – they’re truly becoming our HR hub!
  6. Bill.com. If you pay lots of vendors in different ways, then bill.com is my favorite place to keep it all organized. You can send paper checks or electronic payments and use their platform as a filing hub for vendor invoices too. 
  7. Expensify. Do your team members have company credit cards or lots of expense reimbursements? Expensify has a simple app where they can upload receipts, tell you what the expenses were for, and then import right into QuickBooks.
  8. Profit First. If you hate numbers but want to learn more about handling your financials with ease and clarity (like, how much should I be saving for taxes? What’s a good profit percentage?), this is an amazing book to read. It’s written so ANYONE can understand and is a practical addition to your bookshelf that you’ll reference for years to come.
  9. Profit Playbook. Our free template is the best and easiest way to make a plan to hit your revenue, profit, and cash goals. I walk you through how to build a forecast, step by step, so you have a clear vision of your financial future.
  10. Finance Pro Quiz. If you’ve ever Googled “what’s the difference between a CPA, CFO, CFP” then this quiz is a MUST. In just three minutes, I’ll help you figure out exactly which finance pro you need, no acronyms included!
  11. AmEx Credit Card. If you’re not using a credit card for your business expenses, to rack up points and rewards, you are missing out. This is my favorite credit card that I try and put everything on, then pay off each month.

Do you have a super fabulous tool or resource I should know about it? Share, so I can share with our community!

PS – We have tons of free webinars, podcast episodes, and other resources dropping practically weekly around here. Do you want to be part of the community to get the first dibs on the new stuff to help you grow your bottom line and your impact?!

#tools #resources #quickbooks #quickbooksonline #gusto #acuity #payroll


How to Pay Yourself Consistently

I have a confession to make.

I used to be scared of spending money, including paying myself.

My consulting practice was consistently bringing in a few thousand dollars a month and I was terrified of taking any money out for myself, for fear that I wouldn’t bring in another dime.

I was also scared of paying anyone to do anything for me. After I toiled away at a custom branded PowerPoint template for what felt like days, I finally paid someone $50 on Upwork to create it for me. Not only did they finish in about an hour, but that was officially the first outsourcing I ever did for my business. And I probably debated on whether or not to do it for a ridiculously long amount of time.

You may have similar fears as I once did, or ask yourself weekly:

How do I know when to pay myself? How much should I pay myself? What if my revenue is unpredictable? How much should my expenses be?

While I believe that the root of the issue is the scarcity mindset (we believe that there is NOT more where that came from), everyone wants to make sure they are allocating their incoming cash appropriately so they can build a sustainable business they love AND get paid to do so.

Remember, if we are not paying ourselves, we have a hobby, not a business.

And if you’re not cutting yourself a regular paycheck, or making a regular owner’s draw into your personal checking account (even if it’s just $100/month!), you will begin to feel resentment towards your business, and trust me, it all goes downhill from there.

So let’s dive into how to ensure you can pay yourself consistently, even if you don’t yet have consistent revenue.

Step 1 – Visualize your money. I don’t mean close your eyes and picture piles of cash a la Scrooge McDuck, I mean map out your revenue on paper.

Grab our template hereJump to the Budget & Forecast tab.

Step 2 – Fill in your revenue for the last six months. Add a line for each different revenue source you might have (wedding photography, newborn photography, product sales, etc).

Step 3 – Input your estimated revenue for the next six months (or beyond). Here’s where people freeze. But I don’t know how much money I will make in the next six months! Of course, you don’t. But you are a smart person who can make an educated estimate. Here are a few ways to estimate the unknown:

  • Look at your pipeline. What clients or work do you have committed? What clients or work are almost committed?
  • Look at last year. If you’re struggling trying to figure out how much money you’ll make in October, check out how much you made in October last year. Is it typically a busy or a slow month?
  • Look at your goals. If your goal is to make $120k this year and you’ve already made $80k, you need $40k for the rest of the year. Divide that by how many months are left and figure out the building blocks to get you there. For example, if your photography packages are $5k, you need 8 more. How many can you add each month?

Step 4 – Once your revenue is all laid out on paper, take a look at how it might ebb and flow from month to month. Are there big dips in revenue?

Step 5 – Here’s the fun part! Let’s do a tiny bit of easy math to figure out exactly how much you can afford to pay yourself, how much you should set aside for taxes, and how much you should spend on your business.

(Side note: If you’re super into this and want a great resource, Profit First is a good book to get started. I’m going to simplify it even more though, so if you’re not down for 300 pages of reading, stick with me here.)

Close your eyes for a second. Picture a bucket filled with money. This money is your total income for the month and this is how much we have to allocate every single month.

Let’s say there is $5,000 in that bucket. We want to divide up that $5,000 between a few other buckets:

  • Taxes (for the IRS and, if applicable, state government taxes)
  • Owner’s pay (that’s you!)
  • Business expenses (everything you need to run your business)
  • Profit (extra money to hold onto, invest in the business, save for a rainy day, etc)

Each month, we will take our revenue bucket and divvy it up like this:

  • 15% for taxes
  • 30% for business expenses
  • 45% for owner’s pay
  • 10% for profit

Step 6 – Set up different bank accounts. I recommend at least two business accounts plus your personal account. Your first business account is where all income will be deposited and where your business expenses will come from. Your second business account should be a savings account where you move your 15% for taxes and 10% for profit every single month. And of course, your personal account will hold your owner’s pay.

(Side note: Profit First recommends more accounts than this, but this is how I’ve set up my own business and it works well.)

Step 7 – See how you stack up. If you already track your expenses, owner’s pay, and profit, calculate the percentages (always calculate as a percentage of revenue) that you’re allocating from your bucket now. Make any adjustments necessary starting next month.

Step 8 – Deal with issues. But what if my expenses are higher than 30% now? What if my revenue is 0? What if I want to spend my profit on a big coaching program or new equipment? What if my expenses are lower than 30%; can I take more owner’s pay?

I know, I know. This formula isn’t entirely foolproof, no questions asked. Your business is a unique flower filled with nuances that you’ll need to work through. My quick answers?

  • Lower expenses when you can
  • Increase your revenue so you can pay yourself the 45%, even if that is only $20
  • Go ahead and spend that profit but only after you have a 3 month reserve in the bank
  • Absolutely adjust the percentages as fits your business, just use percentages and track it monthly!

Step 9 – Enjoy a business that fulfills your creative and professional goals, sustains your family and pays you consistently, and makes an impact in the world!

PS – Did you know that we offer VIP days? If everything above sounds wildly helpful, yet totally overwhelming, we can help. We’ll sit together for a whole day and look back at your numbers, then work to create achievable goals and a financial plan to get you there. We’ll set you up with the templates and tools you need to manage this on your own going forward and even check back in three months to see how you’re doing and tweak anything necessary. VIP days can be done virtually OR in-person.

Let’s talk!


How Nonprofit Transparency = More Donations

I just finished reading Thirst, by Scott Harrison, the founder of Charity: Water. It’s a fabulous book that reads like a novel and tells the story of Scott’s personal journey to creating Charity: Water, and all of the bumps and setbacks he encountered along the way. I drew so many parallels to entrepreneurship among other things, but what I want to talk about today is Scott’s and Charity: Water’s unparalleled transparency.

Charity: Water is famous in the nonprofit space for transparently touting the fact that 100% of their donations go to programs (because they have an amazing group of people called The Well who fund operational overhead). Scott also mentions in his book several instances along the way where wells couldn’t be drilled or wells didn’t work or they had disagreements with major donors, and some might chalk these experiences up to major failures to be handled, then swept under the rug.

But not Charity: Water. They operate in a full disclosure manner and are willing to risk their reputation for the sake of transparency.

And guess what? Not only have they not lost credibility but they’ve actually GAINED credibility with their stakeholders and grown to a $50M+ organization.

So putting it all out there does NOT mean that you will lose donors, and in fact, a recent study found a direct correlation between transparency and increased donations.

The full study by Erica E. Harris and Daniel Neely can be summarized into one sentence:

“…transparency in the nonprofit sector is value-added to key stakeholders.”

Aren’t we, as nonprofits, always looking for ways to add more value to our key stakeholders (donors, board, institutional funders, staff, volunteers, etc)?

Transparency is our solution.

Guidestar, one of the charity watchdog organizations, recently published an article about this study and summed it up with two incredibly strong data points:

  1. donors give more to transparent nonprofits
  2. transparent organizations tend to be stronger organizations across a range of governance, financial, and operational dimensions

I think we can all agree how vital transparency is to our organizations. Our stakeholders need to know what’s going on behind the curtain, the great, the not-so-great, and the ugly, and when they do, they will feel more connected to our organization, our mission, and donations will increase.

But! How do you become more transparent overnight, you ask?

By sharing the right financial information to the right people at the right times! Here’s everything you need to know to increase your transparency, stakeholder engagement, and donations, using financial information you already have!

Download our Transparency Tip Sheet to help you share your financials the RIGHT way, then keep reading! >>

Who to share financial info with? Everyone! Staff, board, donors, volunteers. Financial information about your agency is relevant for all stakeholders. We’ll talk more about what information and how you present it below. What to share? For the sake of understandability, I would recommend sharing different types of information and presentations to different groups of people (using the same set of financials as your base, of course). Board: High-level dashboard – a birds’ eye view – of the quarterly financials and forecasts plus a full balance sheet and income statement for those who want more details Staff: High-level dashboard with highlights that are relevant for them (i.e. share about a new grant or program, or the fundraising results from last month’s gala). The more graphical the presentation, the better!Volunteers/donors/public: High-level and/or public information such as the 990, annual report, and audited financials when to share it?Annually: Annual report, 990, audited financials on website quarterly: Board meetings and staff meetingsMonthly: Board Treasurer and leadership team how do we make the information interesting and readable? PowerPoint. Graphs and charts. Bulleted talking points. Simplicity can be powerful!

Put yourself in your audience’s shoes. Do they know what accrued expenses or current liabilities mean? Probably not. Take five seconds to explain it and you’ll see a lot more head nods than heads buried in smartphones. Again, Excel graphs and charts are your friend. They’re super simple to create and for those of us who don’t get their kicks from black and white spreadsheets full of numbers, they help tell a much richer story of your organization’s financial health.

I encourage you to be transparent about your financials because transparency breeds ownership and ownership breeds engagement and engagement by all stakeholders will take your agency to the next level.

Did you get the Transparency Tip Sheet to implement greater transparency in your organization? Download it here! >>

Want more about TRANSPARENCY? It’s one of my favorite topics and I’ve got you covered here and here.


Five Steps to Building Nonprofit Financial Sustainability

You’ve heard the statistic that half of all new businesses fail within the first five years, right? While I haven’t seen the same statistic about nonprofits, I’d venture a guess that it’s a similar number. In fact, the Nonprofit Times released a study in early 2018 that claimed “most charities are teetering on financial peril”.

Financial peril. Intense words to sit with.

So let’s think about that. Fifty percent of organizations, created to do more good in the world and serve those in need, are disappearing, dissolving, or closing up shop on a regular basis which means that whatever need they were created to fill is still out there. That means 8% of organizations are currently operating in the red and 30% are on the verge. We’re talking about spending more than you’re bringing in and not having enough cash to pay your bills.

The question is WHY? Perhaps there wasn’t a strong enough need for the product or service, leadership was not aligned on long-term planning, they weren’t able to bring in enough revenue to cover expenses, there were too many other organizations or companies doing the same thing, or they weren’t providing enough value to the people they were serving.

The bigger question is HOW do we avoid financial peril and ultimately failure? How do we ensure that nonprofit organizations, created to drive positive change in the world, are financially sustainable so they can continue helping and serving, year after year?

I’ve found a solution and I am thrilled to share it with you because it’s an industry game-changer.

But first, even if your organization manages to pay its bills and make payroll every month, do you have a long-term cash management plan? Do you have a reserve of 3-6 months of operating expenses? Do you lose sleep at night (or at least worry occasionally) that your nonprofit seems like a cash-sucking monster and your fundraising just can’t keep up?

I thought so. Keep reading.

As an entrepreneur who’s always interested in improving myself and my business, I recently devoured Profit First, a book by Mike Michalowicz. He has worked with hundreds of business owners who are slaves to their businesses, miserable, and not making any money. His solution to the problem of business owners not making any money is reframing the traditional thinking of Revenue – Expenses = Profit. Instead of taking whatever is left over as profit, he encourages business owners to take their profit first, so Revenue – Profit = Expenses. In other words, bring in the money, set aside a percentage for profit, and use the remainder for expenses.

You’ve probably heard of Parkinson’s Law: work expands so as to fill the time available for its completion. In other words, if you have 8 hours to complete a task, it will take you 8 hours. If you have 2 hours to complete the same task, it will take you 2 hours. The productivity gurus out there LOVE this (give yourselves deadlines, people!).

Well, Michalowicz says the same thing about money. If you have $20,000 to spend on operating expenses, you will spend $20,000. If you have $50,000, you will absolutely spend $50,000. This becomes a major problem when you don’t take your profit first, because you will have spent that $50,000 before you can set aside your profit, and before you know it, you have nothing left over.

Michalowicz then goes into exactly HOW to take your profit first and it involves setting up a bunch of bank accounts, reviewing your numbers twice a month, and separating your cash according to a handful of formulas he provides. According to his case studies, this method WORKS.

Now that you have the major premise of the book, it really makes logical sense, right?

But what about nonprofits? Nonprofits don’t make a profit. The Executive Director isn’t personally pocketing a portion of grants each month (at least I REALLY hope not!). And what about restricted funding? You can’t just hack off a portion of a grant and set it aside, right?

You’re right that nonprofits aren’t looking to make a profit, but what they ARE looking for is FINANCIAL SUSTAINABILITY. And the key to financial sustainability is a healthy cash reserve to support the organization in times of need, a positive net income, liquidity, and solvency. Way too many organizations are creating break even budgets, which means you bring in exactly the amount of money you need to cover expenses but, assuming that you manage to raise all those funds, there is absolutely nothing left over for future reserves because you’ve allocated every last penny to expenses.

Does this sound familiar?

Most nonprofit organizations I know are entrenched in the scarcity mindset and believe that there is a limited amount of resources out there and there’s a limit to how much they can fundraise. Now, to an extent this is true because there are only so many hours in a day, but we tend to place more limits on ourselves than we need to.

So if an organization’s expenses are $1M, we budget that we will raise $1M because that’s all we think we can do and all we think we’ll need. If you haven’t figured it out yet, this is incredibly short-sighted and essentially the equivalent of living paycheck-to-paycheck.

I am going to walk you through today how to implement the Profit First strategy into your nonprofit to build long-term financial sustainability.

Let’s dive in!

1. Budget strategy Most organizations get their budgeting process wrong. They try and figure out how much money they can realistically fundraise this year, then lay out their expenses that take every last penny. I encourage leaders to shift their thinking and budget your expenses FIRST. Tell the story in your budget of exactly what you need to accomplish your mission thoughtfully and efficiently without trying to scrape by on fumes.

Once you have your expenses for the year laid out (and don’t be afraid of the big, bad overhead monster!), back into your revenue number. How much money will you need to raise in order to meet these expenses and set aside some funds for a reserve? We’ll talk more about a reserve next.

To figure out your reserve goal, take your total annual expense budget and divide by 12. For example, if you annual expenses are $2M, your monthly expenses would be $166,667. For your first year of budgeting in this way, include a surplus of just 1%, so on this $2M expense budget, plan to fundraise $2,020,000. Make sense?

Watch our free masterclass to learn how to raise more money by sharing your financials.>>>

2. Reserve building Our goal in building a reserve is to have 3-6 months of operating expenses in the bank to support the organization in times of shortfall or emergency. In the example above, our monthly expenses were $166,667, so a 3-6 month reserve should be $500k – $1M.

This number may sound downright terrifying, and I agree, it’s a BIG goal especially for an organization that coasts into payroll every two weeks on fumes. But we’re not going to get there in a month or even two months. This is a long-term process that will lead to long-term sustainability.

Because you’ve made it this far reading through the post, I know you’re in it to win it, so the first step you need to take is to create a separate bank account. We simply cannot create a reserve with cash sitting in our checking account. This special reserve fund needs its very own account.

Now that the reserve fund has a place to live, we need to start putting money in there and we are going to start small. Each month, once the financials have been completed by your bookkeeper, accountant, or finance team, we are going to move 1% of our unrestricted income into the reserve account.

For example, let’s say in March you brought in $225,000 (great job!). $75,000 was a grant restricted to a particular program but the remaining $150,000 was unrestricted income, mostly from your annual event. Once you have closed the books for March, you’re going to move 1% of that $150k, or $1,500, into your reserve account. That’s it. $1,500.

And so on and so forth. On a $2M budget, this will eventually add up to $20,000 sitting in your reserve account. It’s not enough for an entire month of expenses YET, but maybe it’s enough to cover a whole payroll!

Once we’re in a good routine of setting aside 1% of our monthly unrestricted income, we can increase the percentage to build up that reserve just a little bit faster.

3. Clean up liabilities Just like we know that consumer debt is a major hindrance to personal financial freedom, having any long-term liabilities, or debts, on your nonprofit’s balance sheet will keep you from long-term financial sustainability too. Maybe you have a credit card but you haven’t been paying it in full on a monthly basis or perhaps your organization utilizes a line of credit from your bank.

We want to get this paid off so we can build our reserve and the path to financial health much quicker! Again we go back to the budget process. If we know we need to pay down a handful of liabilities, we need to bump up our fundraising goal for this year to cover those expenses.

Do you struggle to understand what your financials really mean? Watch our free masterclass >>>

4. Fundraising Now that I’ve told you a few times that we need to increase our fundraising, you’re probably wondering how the heck you’re going to raise even MORE money next year when you felt challenged and strapped this year!

First of all, I hear you and I salute you. I’m not a fundraiser but I’ve seen just how much work goes into raising every single dollar for your organization, and at the end of the day, I truly think it’s the hardest job at nonprofits. Go you! You are making a difference with the work you do every single day and it’s because of YOU that we can operate and create positive change in the world.

Now, I may not have all the answers, but I do have a few questions. Do you know the percentage of revenue that you bring in that’s unrestricted vs. temporarily restricted? Does the scale tip heavily in one direction or the other? Obviously, unrestricted funding is the magical unicorn that we all want to increase in our organization. What about grants? Are you sure to include a portion of administrative overhead to every single grant to cover your operating costs? It’s a missed opportunity if not!

5. Cash flow rhythm And finally, this is where the CFO in me comes in. As the leader of your organization, you need to get into a monthly rhythm with your accountant (or bookkeeper or CFO) to review the financials, transfer the 1% into your reserve account, and forecast your cash flow for the next 12 months.

Most organizations I know have an income statement and a balance sheet that they review on a monthly basis, but they skip one of the most important pieces of financial management that will literally make or break your organization.

Your cash flow forecast!

Your cash flow forecast is not a report that Quickbooks will spit out. It requires a bit of manual manipulation and a moderate level of Excel proficiency. This report and analysis will show you the inflows and outflows of cash into and out of your bank account, and your ending balance by month, so you can see exactly where cash gets tight and make decisions NOW to avoid a cash crunch LATER.

If you don’t have a cash flow forecast template, I have a simple one here that you can download and fill out for your organization. Then, your bookkeeper or accountant can update the actuals on a monthly basis and you can forecast out the remainder of the year, again, being easily able to spot problem months and make changes now.

So, there you have it. I’ve laid out five simple steps to building a reserve and financial sustainability at your organization, using the Profit First methodology. It’s a slow but consistent process that will eventually lead to a stronger balance sheet, more “profitable” financials, which will ultimately make you irresistible to funders. Funders will see that you take your resources seriously and are in the game for the long-haul. What donor doesn’t want to see that?

Do you feel stumped or overwhelmed by everything I’ve just laid out? I promise it’s not complicated, but it might be helpful to hop on a phone call to walk through it specifically to your organization. I’ve opened a handful of spots on my calendar here if you want to claim one so we can walk through this process together!




3 Lessons in Storytelling from a CFO


The latest buzzword in the business world. It makes sense in the marketing space, because I’d sure rather hear a story about how a product or service changed someone’s life than have a stranger shout BUY THIS! BUY THIS! BUY THIS! or DONATE! DONATE! DONATE! at me.

I just got back from the Nonprofit Storytelling Conference in Orlando where I led a session on Storytelling with Financials. I taught leaders how to use metrics within their basic financial statements to build a more robust story about their organization. Instead of saying, we are financially healthy and sustainable, why not calculate your months of cash on hand and revenue diversity to add color to that story?

(Quick side note: Do you want the financial metrics calculator I shared at the conference so you, too, can tell a more robust story about your organization? Grab it here!)

Today I want to share a few super practical tidbits I learned at the conference about storytelling that are applicable whether you’re a nonprofit leader looking to increase donations OR an entrepreneur looking to grow your business through various methods of communication.

Let’s do it!

  1. People only read the top and bottom of your letter, email, etc. So make your point quickly, tell them exactly what you want them to do, and repeat it in the bottom third of your communication too. You can use the body of your email to go into more detail for the few who may read it, but dive right into the point of your communication FAST. You have approximately four seconds to make a quick impression on your reader which will determine if they continue reading or not.
  2. Talk about outcomes and how they impact the reader. Don’t talk about yourself, your organization, or your experience all over your website, email, or letter. Frankly, people don’t care that you have a Master’s degree or that your organization has been around for 15 years. Talk about what people DO care about: THEMSELVES. Share how your services can help them and the outcomes they might experience.
  3. Your call to action must be super clear. When people are reading your website, email, or letter, what do you want them to do? Surely you don’t want them to read and delete, right? You may want them to donate, invest, partner, schedule a call, sign up, so TELL THEM. Make this call to action clear and consistent by including line breaks, making the font larger and bold, or adding a colorful button.

AND! I have one bonus tidbit for the nonprofits out there that comes straight from Lori Jacobwith of Ignited Fundraising and speaks to my finance heart.

Your money story must accompany all other stories so that people understand what it takes to do your work.

Let’s not pretend that we can operate on pennies. We need to make investments into our organizations and our people because that’s the only way we can make a greater impact on the communities we serve. And, we need to tell potential donors what it really costs to run our programs and cast a vision of the financial support we’ll need to be sustainable for the long-term.

My talk on Storytelling with Financials shared exactly how to tell your numbers story, so I was thrilled when Lori shared that gem.

Your Next Steps:

If you want to tell a better, more robust story about your organization, grab our financial metrics calculator here.

Better yet, if you’re ready to be a more confident leader who makes better decisions for your organization based on your financials, join us to Master Your Nonprofit Numbers! (And because you found us here on the 100DC website, use coupon code FRIEND35 for 35% off tuition!)

The Nonprofit Storytelling Conference was one of the best I’ve attended and I hope to return in 2019. Traveling to San Diego in October won’t be half bad either! Do you want to attend? Check it out here.



Five Steps to Closing Your Monthly Books

One question I ask when getting to know a new organization is: What does your monthly close process look like? I often get the answer: What’s that? [Insert wide-eyed emoji here].Many organizations I speak with don’t have an official monthly close process. They generally make sure all the month’s transactions are in the books and then run reports when it’s time for a board meeting. Or maybe they close the books on a quarterly basis instead, again, aligned with a board meeting or quarterly tax payments.While these aren’t necessary red flags, I know that we can do better! Monthly financial reports give you almost real time visibility into your organization, allowing you to be more agile and nimble, and make better decisions in the moment. You remain more organized by getting everything into the books immediately, rather than waiting to make entries months later and deal with messy numbers clean-up later. Finally, your books are going to be much more accurate with real time entry.This is why I work to implement a strong monthly close process for each organization I work with. You don’t need a big accounting team or several extra work days to make this happen.

Check it out.

The basics of a monthly close process: Deadline: 10 business days after the end of the month (Example: November books are to be closed by December 14th – and then no changes to November are allowed) Process & Actions:

1. Enter all expenses

  • Petty cash
  • Credit card
  • Payroll
  • Depreciation
  • In-kind
  • Expense reports

2. Enter all revenue

  • Pledges
  • Cash receipts
  • Donations
  • Sales

3. Reconcile all cash accounts

    • Do your book balances tie with your bank statement balances?

4. Run your reports and analyze

      • Balance sheet – compare last year to this year, check for any major variances. What’s happening to cause the big variances?
      • Income statement – compare last year to this year, check for any major variances. What’s happening to cause the big variances?
      • Budget vs actual – compare month actuals vs. budget and YTD actuals vs. budget
      • General ledger – eyeball the details and make sure all looks correct
      • A/R Aging – what account receivable do you have outstanding? Make another effort to collect!
      • Cash flow – how much cash is in the bank? When does it look like cash is getting low?

5. Bonus points: Forecast the rest of the year

      • After you close each month and review your reports, create a spreadsheet and fill in your projections for cash, revenue, and expenses for each month for the rest of the year.
      • How far off are you from your budget? Do you see any major gaps in revenue or cash? Any months that are heavy in expenses? Why?
      • This exercise will do wonders to help you see around the corner for your business.

Okay, so there were a LOT of finance-y words above that might make you feel overwhelmed. Am I still speaking a foreign language? Does Excel make you cringe? No problem!

Reach out and I’ll walk you through getting your financial house in order, step by step. You WILL become the master of your financial domain!


How to Track Temp Restricted Net Assets

Temp restricted…what…what?

Today’s as good a day as any to tackle unrestricted vs. temporarily restricted income, both the bane and the lifeblood of so many nonprofits’ existence.

Donor restrictions are often the first thing the auditors look at, and often the hardest thing to track accurately and appropriately. What it boils down to is:

  • How you’re tracking and spending your donor-restricted funds
  • How you’re using your cash and whether you have enough to cover all restricted future activity
  • Whether you’re dipping into one restricted pot to cover another while you wait for cash to come in. Or maybe you’re dipping into unrestricted cash to pay for your programs, meaning you’re not charging enough for services.

These are all very important things to consider – donor intent is the lifeblood of your organization! – and if you don’t have a solid system to properly track restricted activity, you may not know the answers to any of the above.

Let’s start with the basics.

Unrestricted income has no donor requirements. We can use it when we want, how we want, for operating expenses or program expenses. We are not necessarily obligated to report on those specific funds. You may also see it called: Without donor restrictions.

Temporarily restricted income, on the other hand, is subject to donor imposed stipulations that will be met by the actions of the organization (i.e. programmatic accomplishments) and/or the passage of time. And contrary to what many nonprofit accountants probably wish, temporarily restricted income must be tracked separately from unrestricted income in the books and a schedule must be created offline. You may also see it called: With donor restrictions.

When donor-imposed restrictions are met (like the time period has passed or we’ve spent all the money on the designated programs), temporarily restricted net assets are released and reclassified to unrestricted net assets.

How about a few examples?

The Jones Family Foundation gives $10,000 to your organization. Their pledge letter, dated June 1, 2023, states that their gift is for “operational support”.

Unrestricted or temporarily restricted?

Susan Jones gives $5,000 and the post-it attached to her check says “for 2024 adult education program”.

Unrestricted or temporarily restricted?

The World Educate Foundation pledges $100,000 over four years – $25,000 in 2023, 2024, 2025, and 2026 – but did not specify a project to fund.

Unrestricted or temporarily restricted?

Did you get all the answers right? Keep reading…

So now that we know what unrestricted and temp restricted funds are, how should we be tracking them? The answer is twofold.

First, the funds need to be marked in your accounting system as unrestricted or temp restricted. That can be accomplished by creating an account code for temp restricted income, or perhaps a class that identifies the type of revenue, then every single income entry must be tagged to the appropriate restriction. (Want to know how to set up your accounting system to track temp restricted net assets? Go to our post here >>>)

The second method for tracking is offline in Excel. Your auditor will want to see a temp restricted net assets (TRNA) schedule that shows opening balance of temporarily restricted net assets by program, additions throughout the year, releases (aka how much you spent) throughout the year, and ending balance. This number will flow directly onto your balance sheet of your audited financials so it’s important the numbers tie!

To recap, here are the three steps you need to take to ensure you’re handling temporarily restricted income properly:

  1. Are you identifying income restrictions as they come in? Are you tracking in both the donor database and accounting system?
  2. Are you tagging/coding income restrictions into your books?
  3. Are you preparing a schedule outside of the accounting books on a regular basis (annually at the bare minimum) that shows opening balance, additions, releases, and ending balance, that then flows into our balance sheet?

If you can’t shout YES from the rooftops to any of these questions, then we should talk! We can help you get set up and on the right track so that you, your donors, and your auditors are confident that you’re both tracking and using your funds as intended.

Hip hip hooray, TRNA!

Do you want to manage your restricted funding with clarity and ease but don’t know where to start? Are you ready to truly understand your restricted funding picture so you can fundraise more strategically?

I created Master Your Restricted Funding to help you do just that! For $27, you get a Masterclass, a template to track all of your restricted grants and expenses, and I walk you through step-by-step on how to use it. This will help you revolutionize how you’re managing, analyzing, and spending your restricted funds!


Grab it for just $27 here!

More Resources:

Here’s a detailed step-by-step process to tracking temporarily restricted net assets in Quickbooks Online >>>
Still feeling stuck? Set up a time to chat with us and see how we might be able to help >>>


What You Must Know About CFOs

I told someone the other day that I am a CFO and they giggled and asked, “Umm, what’s that?”

So I thought I would explain all of the ins and outs of exactly what a CFO – that’s CHIEF FINANCIAL OFFICER – is and does.

Don’t know if you need a CFO? Take our Finance Professional Quiz to find out if you need someone filling this CRITICAL role and then keep reading! >>

WHO is a CFO?

Me! I’m a Chief Financial Officer. This means that I’m responsible for everything related to the numbers. Analysis and reporting, budgeting, strategic planning. Many times it also means HR, IT, and administrative operations. A bookkeeper or accountant enters your daily transactions and looks at the past, while your CFO uses that information and helps you look toward the future, or “see around the corner”, to make better decisions for your organization.

HOW do I know if I need one?

Do you know your numbers? Is your profit margin or net income where it should be? Do you have a budget that you use to track revenue and expenses each month? How’s your cash flow?

If you can’t answer each of these questions with absolute certainty based on the black and white numbers, you probably need a CFO.

A CFO will change your business and the way you think about numbers. If she is the only finance person at your organization, aside from a bookkeeper, she will be your second set of eyes on the numbers and will make sure revenue and expenses are categorized accurately, so you have solid financial statements. She’ll look for cost savings and generate efficiencies. Your CFO is basically your numbers fairy godmother.

BUT what if I can’t afford another full-time position?

Totally understandable, and unless your revenues are in the multi-millions, you probably don’t even need a full-time CFO.

So a part-time CFO is your solution. Lucky for you, the freelance workforce is exploding! Oh, and I can help you too. Part-time CFOs are cost effective and offer an outside perspective that delivers invaluable input and insight to strategic decisions.

WHAT can I expect from a part-time, virtual CFO?

The first thing they will do is ask for a ton of information and do a deep dive into your numbers – they’ll need access to the accounting system, recent financial reports, and contact with your CEO and bookkeeper. This will help your CFO understand your business inflows and outflows, and she’ll be able to use this information to help you make strategic decisions down the line.

They may work on an hourly basis or monthly retainer (we at 100 Degrees Consulting prefer retainer!) and will likely prefer to work together for a minimum of three months. You will get the most of your relationship once your CFO has had a chance to understand your business and get to know the team. Plus you’ll get the benefit of a full quarterly analysis.

Take our Finance Professional Quiz to find out if you need someone filling this CRITICAL role in your organization, then get on your way to better decision-making!

So what do you think? Are you in control of your numbers, or is it time to bring in the big guns and get an outsider’s expertise?



Six Steps to Ensure a Stress-Free Audit

Grab this amazing FREE E-BOOK to ensure a stress-free, quick, and painless audit!

I had a few alternative titles for this post.

Audit Prep: You’re Already Behind the Eight Ball

Audit Prep: Shape Up So They Can Ship Out

Audit Prep: No Management Letter Comments, No Cry (sung to the tune of Marley’s No Woman, No Cry)

Joking aside, the audit can be one of the most stressful weeks (or months!) of a nonprofit ED’s year. Not only are you expected to make sure every single journal entry is properly booked, but you’ve got HR files and donor letters and receipts from a year’s worth of expenses to be sure are coded, organized, and easily accessible. Not to mention the things that can be just plain confusing: temp restricted net assets, anyone?

The auditor’s arrival to your office does not have to be the worst moment of your year (and in fact, it shouldn’t – they truly are here to help us!) and I’ll give you six action items to ensure it’s as smooth as can be.

1. Fix any prior year issues. As soon as the auditors sent you that final report and management letter last year, you should’ve started tackling their comments right away to make institutional changes to fix any issues. If you didn’t jump on that, jump now! You need to demonstrate you’ve taken their recommendations seriously and have made substantial effort to correct any issues. This is important to all stakeholders to ensure we’re maximizing and being good stewards of our resources to further our mission.

2. Practice ongoing communication with your auditor. This should not be the first time you have spoken with your auditor since they walked out last year. Most good firms will be in communication throughout the year on new regulations, best practices and be available to answer your questions as they come up. Audit week is NOT the time to ask how to track your temp restricted net assets – be prepared for an auditor brain explosion if you ask her.

3. Familiarize yourself with the PBC list. If you haven’t already, ask your auditor now (seriously, GO EMAIL HER NOW!) for the PBC, or Provided By Client, list. This is a comprehensive list of everything the auditor needs both prior to on-site and when they arrive. Here’s a great sample list.

4. Create an internal team game plan. As soon as I have the PBC list in my hands, I schedule a team meeting and assign a person responsible and a deadline to each item. We also have a year end close deadline list (e.g. soft close on January 15th, review reports and fix any issues by January 22nd, hard close by January 31st) which helps determine when PBC list items can be completed. The final part of the game plan is our brief weekly check-ins on the status of each item until the auditors arrive.

5. Start early. If you’ve got enough capacity in your finance team to do so, I recommend tackling as many items as you can simultaneously with closing the books for the year. You’ll likely be asked for personnel and finance policies, employee lists, check registers and other items that can be sent immediately.

6. Double-check every submission. I think we can all relate to this: we work really hard to complete the temp restricted net asset schedule quickly this year, send it off to the auditor before we officially close the books and realize that there was an edit which throws off the whole balance. While you can send many items early, you should wait until your books are absolutely final to send all your schedules. Remember, everything must agree – general ledger vs. schedule vs. balance sheet and income statement – and a surefire way to ensure this is to wait until your books are solidly closed. You don’t want to show the auditors fifteen different reconciliations later to show how you made the changes.

The six action items above will help ensure a smooth audit process even before the auditors arrive. Remember, preparation is crucial to a smooth audit – stay organized and you’ve got this!

Don’t forget to grab this amazing FREE E-BOOK to ensure a stress-free, quick, and painless audit!

How do you feel about the annual audit? Do you view it as a learning opportunity or pure agony?

Need help getting your ducks in a row for this year’s audit? Give me a buzz!


Is your organization “teetering on financial peril”?

The Nonprofit Times just released a study of over 219,000 nonprofits and came up with a couple startling conclusions.

1. One in 12 are insolvent already 2. 30% face liquidity issues

In normal people speak, that means 8% of organizations are currently operating in the red and 30% are on the verge. We’re talking spending more than you’re bringing in and not having enough cash to pay your bills.

It seems dramatic but it doesn’t take much to get yourself into this place. A few months of a casual review of your financials combined with not forecasting your cash flow can easily turn a nonprofit upside down.

The results of this study, that a third of organizations are teetering on the brink of financial disaster, is not surprising. Two thirds of those surveyed had operating budgets of less than $1M, and I can almost guarantee that they also didn’t have a CFO or other finance leader on board.

A bookkeeper or accountant simply isn’t tasked with seeing the financial future of the organization. They’re responsible for day-to-day operations, maybe some reporting, but rarely analysis and forecasting.

What these <$1M organizations need is a CFO, a visionary to help them see into the future and avoid insolvency LONG before it happens. And how, might you ask, do we do this?

  1. It starts with strategic planning, setting up a vision for long term accomplishments and success.
  2. Then the next step is a solid budget that puts numbers behind the strategic plan and gives us metrics to track.
  3. We use financial reporting to look at past performance and help make decisions about the future.
  4. Finally, we create cash flow forecasts to see the future and confirm we’ll be able to meet our obligations.

Ensuring financial sustainability isn’t HARD but it takes time and attention that, frankly, you can’t afford not to give.

So what do you think? Is this study unnecessarily dramatic or do you feel less than confident about the sustainability of your organization?

Join the conversation over on Facebook!