Operational Excellence City & County of San Francisco Rebecca Coker, Lead Consultant, FMA Roxanne Hanson, Consultant, FMA May 22, 2017 GOVERNANCE PLANNING People People OPERATIONS Technology Process y MONITORING 1
What are some elements of success in financial operations? 3 Welcome & Overview (9:00am) Introduction to Operational Excellence People Accounting Software Workflow & Efficiencies Internal Controls Closing (1:00pm) 4 2
OPERATIONAL EXCELLENCE Operational excellence is an organizational culture that values learning, problem solving, and a strong commitment to continuous improvement Essential organizational capabilities that comprise operational excellence fall into three categories: Strategy Resources Practices 6 3
Strategy Resources Practices Mission alignment Adaptable strategy and plans Talent and teams performing at full potential Fund development capacity Organization-wide performance measurement Sound decisionmaking practices Robust governance & risk management Efficient and integrated workflows 7 Effective internal and external communications PEOPLE Talent and Teams Performing at Full Potential 4
What Factors Drive Fiscal Staffing Configuration? Business model Complexity of revenue streams Number of government grants & contracts Number of transactions Budget size Total number of employees 9 Strategic Lead and support organizational financial planning and monitoring Managerial Ensure finance is effectively carrying out its operational responsibilities Transactional Perform day-to-day accounting functions, data entry, and administrative tasks Adapted from Jeanne Bell Peters and Elizabeth Schaffer, Financial Leadership for Nonprofit Executives: Guiding Your Organization to Long-term 10 Success 2005 5
Controllership General Ledger quality Transactions (AP, AR, Billing, Payroll) Production of financial reports Reconciliations Planning & Analysis Budgeting process Scenario planning Forecasting and budget-to-actuals monitoring Grants Management & Compliance Grant and contract monitoring Fiscal policies and procedures Funder reports External audit 11 Finance Information Technology Operations Human Resources Office Management Facilities 12 6
Question 1 13 ACCOUNTING SOFTWARE Efficient and Integrated Workflows 7
Commonly Used Accounting Software in the Nonprofit Sector 15 Basic Functionality Flexible Chart of Accounts Modules for Accounts Payable Accounts Receivable Reporting against budgets Customizable reports Ability to import/export data Advanced Functionality Fund accounting Automated allocations Dashboards View-only access for end-users Paperless document management Electronic workflow routing Cloud capability / Web-hosting Purchase requisitions 16 8
Fundraising Database Planning Software Client & Membership Tracking/ Billing Accounting and Reporting Software Travel & Expense Reporting Automated Bill Pay Payroll and HR Systems 17 Ease of Use Vendor Support Total Cost of Ownership Will it Grow with Us? Flow of Data 9
Questions 2-4 19 EFFICIENCIES Efficient and Integrated Workflows 10
Sample Process Improvements Results Reduced cycle time Increased quality Elimination of redundant steps and errors Reduction in variability Cost reduction Additional capacity for higher level work 21 www.strongnonprofits.org 22 11
EFFICIENCIES: CASH DISBURSEMENTS Efficient and Integrated Workflows Banking Technology Electronic transfers Reduced need for check issuance Purchase cards Eliminates needs for handling cash Positive pay Ensures checks are only paid to verified vendors ACH block and filters Prevent unauthorized outsiders from accessing or removing funds from an account 24 12
Technology: Automated Travel and Expense Reporting Systems Web-based, mobile access Scan or take a picture of receipts/documentation Electronic approval routing Direct connections to: Credit Cards, Payroll, Accounting System 25 Electronic audit trail Community Used Systems 26 13
Automated Check Writing Services (such as Bill.com) provide Automated invoice approval workflow that be accessed via any computer or mobile device Integration with accounting software Elimination of the manual process of cutting and mailing checks Simplified deposit process 27 EFFICIENCIES: PAYROLL Efficient and Integrated Workflows 14
29 EFFICIENCIES: CASH RECEIPTS Efficient and Integrated Workflows 15
Cash Receipts: Technology Banking technology Remote deposit (check scanning) New technologies that facilitate fundraising: Donations via text message Mobile bidding at auctions Mobile payment solutions (for example: Square) 31 How do these systems connect? Online Giving Platform(s) Donor Database Accounting Software Merchant Account Bank Account 32 16
Questions 5-8 33 INTERNAL CONTROLS Efficient and Integrated Workflows 17
35 Activity: Internal Controls 36 18
Influencing Culture Policies & Procedures Leveraging Technology Policies Resolutions adopted by the Board Procedures Specific tasks and measures developed and implemented by management 19
No one person should: 1. Perform all functions within an accounting cycle 2. Have the ability to cover up an intentional or unintentional accounting error 39 Questions 9-13 40 20
GROUP ACTIVITY What does your team do well that others could learn from? Why does it work well? What would you like to learn from others? Why would you like to learn about this? 21
RESOURCES Citywide Nonprofit Monitoring and Capacity Building Program Public Website: http://sfcontroller.org/nonpr ofits Training Materials Resources for Nonprofits Laura Marshall Project Manager (415) 554-7511 Laura.Marshall@sfgov.org Charity Espiritu (415) 554-7529 charity.espiritu@sfgov.org Jeff Pomrenke (415) 554-5365 Jeffrey.Pomrenke@sfgov.org Marnie Purciel-Hill (415) 554-5313 Marnie.Purciel-Hill@sfgov.org 22
Resources New Skills, Existing Talents: The new mandate for finance professionals in supporting longterm business success. July 2012 Report of the Chartered Institute of Management Accountants. http://www.genpact.com/docs/pdf/cgma-bath-report-june-2012_v5 Factors that set apart top-performing finance teams. CGMA Magazine July 2015. http://www.cgma.org/magazine/news/pages/top-performing-finance-teams- 201512596.aspx? Nonprofit Risk Management Center. https://www.nonprofitrisk.org/ Maximizing Nonprofit Internal Controls. Nonprofit Quarterly. March 2017. http://fmaonline.net/2017/03/14/nonprofit-controls-and-how-to-make-them-work-for-you/ 45 NTEN: www.nten.org Membership organization of nonprofit professionals who put technology to use for their causes. TechSoup: www.techsoup.org Provides nonprofits and public libraries with learning resources as well as access to donated and discounted software services and products. Idealware: www.idealware.org Provides researched, impartial and accessible resources about software to help nonprofits make smart software decisions. Achieving Operational Efficiency: A Means to Bridge the Gap Between Mission and Aspirations. Accenture/NYU Wagner School Roundtable White Paper, 2012. http://www.accenture.com/us-en/pages/insight-accenture-nyu-wagner-school-roundtablewhite-paper.aspx Nonprofit Accounting Software: Avoiding an Installation Epic Fail, Nonprofit Times http://www.wallacefoundation.org/knowledge-center/resources-for-financial- Management/Pages/Nonprofit-Accounting-Software.aspx 46 23
StrongNonprofits.org In collaboration with the Wallace Foundation, FMA has created a library of tools and resources to help organizations become fiscally fit Four Topic Areas: Planning Monitoring Operations Governance 47 Online Tutorials for StrongNonprofits.org FMA is offering complimentary orientation one-hour webinars that will feature a high-level overview of the website and drill down on several resources housed on the site. Next webinar: September 12 th at 11am PT To register, or check for future webinar dates, see the following webpage: http://fmaonline.net/strongnonprofits For a 15-minute, on-demand webinar tour of the site: http://fmaonline.net/snpondemand 48 24
REFLECTION & QUESTIONS Established in 1999 to serve not-for-profit organizations around the country Provides customized financial management, accounting, software, organizational development, human resources, and other consulting services Works directly with organizations or through funder-supported management and technical assistance programs FMA's mission is to empower not-for-profit organizations with the knowledge and skills to successfully serve their constituents and fulfill their missions Rebecca Coker, MPA rcoker@fmaonline.net 415-871-0109 New York Chicago Oakland Los Angeles www.fmaonline.net 50 @FMA4Nonprofits /FiscalManagementAssociates linkedin.com/company/fiscal-managementassociates-llc 25