Nonprofits – Battling Inflation Part 2
In Part 1 of the recap of the Professionals Nonprofit Networking Group’s recent webinar, we shared PBO Advisory Group’s Rick Dahlseid’s strategies for building a solid foundation to battle inflation and a recession. Today we look at measures your nonprofit can make to better weather the inflation and recession storms.
The Employee Retention Tax Credit (ERTC) is a payroll tax refund that could put cash back into your nonprofit. With the potential to receive as much as $26,000 per employee, it is worth the effort for all nonprofits to determine if they qualify. (PBO Advisory Group has helped hundreds of clients determine eligibility and file for refunds. Click here to read our latest update on the ERTC program and process.)
Recent changes to the way leases are reported on your balance sheet could impact loans your nonprofit may have, as well as other aspects of your financial situation. The effects of lease accounting will be more apparent to your particular situation during the annual audit. However, Rick advises dealing with this upfront versus waiting until the audit. Taking action now will minimize any ramifications you may face. (To learn more about lease accounting, click here to read a Forbes Finance Council article written by PBO Advisory Group’s managing director and founder Mike Ford.)
When it comes to finding ‘hidden cash’, Rick suggests leaving no stone unturned. The most likely place to find cash is through a review of your accounts receivable. Determine who owes you cash and then collect that cash ASAP. As cash is king, especially during uncertain times, you should also consider putting in place a line of credit.
With nearly 19 years of working with nonprofits in a CFO advisory role, Rick has seen a lot of wasted spending. Now, more than ever, you should be running a lean organization focused on keeping cash in the bank. A thorough review of all costs should be made and any expenses that are not absolutely necessary should be carefully evaluated.
You are not alone. Your peers at other nonprofits are facing the same challenges you are. Rick suggests seeking out others to learn how they are managing during these uncertain times. Through informal or formal collaboration, you will gain great ideas and help support the entire nonprofit community.