Sound financial practices are imperative in this day and age. If your organization is in need of financial guidance, DMS can help!
The key to financial success is in the attention to detail. What’s coming in? How much is going out? Who owes what? These are questions that every association needs to have completely mastered, and DMS can help. We’ll prepare your annual budget, distribute custom monthly reports, and track and collect annual membership dues. We work with a mutually agreed-upon accounting firm to complete income tax returns and an annual audit.
Diversified Management Services specializes in building budgets that are responsible, flexible, and perfectly customized to your organization’s needs. We have spent years developing key banking and credit card relationships that are at your service to be your best financial solution. When you work with DMS, you’re working with a group that understands your needs and has experience fulfilling them. Working with an association’s board, DMS can develop a budget that helps you get where you want to go.
We are experts in the specialized world of nonprofit financial statements. Nonprofits have different regulations and rules regarding financial management, and Diversified Management Services can make sure you’re doing everything right while avoiding costly or disastrous mistakes.
We work with you to create customized, meaningful financials that ensure that every board member or relevant party will be able to understand them. We’re committed to the finest details.
When thinking about financial sustainability, who would have ever envisioned the economic environment that we have endured in 2020? Who would have planned for a pandemic and the economic conditions associated with it? But it has happened, now what do we do?
As a management best practice, boards we work with set a goal set aside reserves to prepare not-for-profits for this challenge. This can be difficult, given the time it takes to accumulate, however 2020 has proven how truly important they are!
So, what’s next? Those reserves that were so carefully planned for maybe depleted leaving associations facing operating losses in 2021.
All is not lost! The first step is to figure out where you are. A cash flow analysis is the perfect means to accomplish this – a powerful tool, but the power lies in how it is prepared. Organizations need to prepare a cash flow analysis looking at each month separately asking the following:
What receipts are going to come in each month, what bills are going to be paid? This will show where cash issues lie.
Are there months where the organization will be short on cash? Prepared in advance, this will give the organization time to plan and forge a much-needed partnership between the accounting team, the organization’s leadership, and the board of directors. Once prepared, there needs to be constant communication between these parties to make this a successful tool.
The second step is to figure out where you are going. The next tool in your box is the pivot. So how does an organization pivot? Just like a basketball player keeps his or her one leg planted while using the other to find the open teammate, for an association, this means looking at your mission. What is our purpose? Who do we serve? What essential services do we provide our members? The next part is to move in search of a teammate. For an organization, this means taking what we have learned from the cash flow analysis and the deep dive we just performed to determine which way to turn.
One example of how associations are learning to pivot in our current environment is an annual conference. As is true with most, in-person events are a significant source of an organization’s annual revenues. Today’s reality has forced all of us to ask the tough questions:
Engaging your accounting team at this point allows decision-makers to assess risk and implications by employing a cash flow analysis. Incorporating with all likely scenarios considered can address key factors that help determine the best one. Filtering them through an accounting lens provides greater context and data as you consider:
The organization’s accounting team and management need to address each of these questions within the cash flow analysis. Once the team has completed the exercise cash flow for each scenario, the answer is usually pretty clear as to what way the organization needs to pivot to serve its members and how to balance the provision of funds between operations and reserves.
With every challenge comes opportunity. Perhaps the opportunity here is to create a much-needed team, one between your accounting department and your decision-makers. A team that works together on an ongoing basis to look at cash flow, the timing of expenses and revenues, and the potential to eliminate expenses and grow existing and/or new sources of revenues, as well as ways of doing business.
At its very core, financial sustainability is about building a financial system and team that can function in good times and in bad, and a system that can overcome challenges when they arise.
Kelly Meiners, Director of Accounting
Diversified Management Services
Diversified Management Services (DMS) has been a great asset to the Association of Former Agents of the United States Secret Service (AFAUSSS). It has become very evident to our membership and especially our Board of Directors, that without the expertise of DMS we would not be able to achieve our potential, fulfill our obligations, and pursue the goals we have established as a social and charitable organization.
Whether you know what you want or would like to hear more about what Diversified Management Services can offer, it all begins the same way—with a simple act of reaching out. Please contact us with any questions and we’ll be sure to respond.