Year-End Audit and Tax Prep Strategies

  • Nonprofits
  • 11/19/2024
Female writing new ideas on sticky note

Streamline your nonprofit’s year-end audit and tax process with time-saving strategies to help reduce effort and increase efficiency.

As CFOs working with multiple nonprofits, we often experience mixed emotions as we prepare for annual audits and tax returns. While we understand the benefits of these tasks, the additional time required to prepare for them can be very stressful.

Despite our best efforts, we often find ourselves with more tasks left open than we anticipated. So, how can we become more efficient and keep these necessary tasks from being overwhelming?

Here are some tips to help you streamline the process:

Set a timeline

Put the date of your annual audit or tax return on the calendar and work backwards. Determine what needs to happen and when to make the deadline feasible. Keep in mind that an audit can take a significant number of additional hours for the finance team even if accounting records are kept up, so factor this into your timeline.

Stay on top of it all year

Doing monthly balance sheet reconciliations and having a month-end checklist can help you be ready for an annual audit. Don’t get behind in what you know you need to accomplish.

Block time on your calendar

Protect the time needed to prepare and encourage your team to do the same. This might be earlier in your day before the day’s chaos sets in, or on specific days that you know tend to have fewer meetings.

Use your systems

Many systems can track specific 990 lines (e.g., Sage Intacct). This may require additional time on the front end to set up the reporting, but it can provide you years of benefits as you click a button to produce a schedule for your annual 990.

Additionally, enhance your system by setting up recurring reports, such as the auditors’ analytical balance sheet and profit and loss, or a specialized report grouped by functional expense categories or grant.

Proactively meet with your auditor

Don't wait until the audit to discuss new standards or questions you may have. Tackle these issues as they arise to get the work out of the way ahead of time.

How we can help

While annual tasks will always require effort, adopting even one of these ideas can make the process less stressful and more efficient.

Start by blocking just 30 minutes on your calendar today to begin thinking about the timeline. Easy next steps include scheduling a planning meeting with your team and making sure all audit and tax tasks are delegated to specific individuals with due dates.

If your nonprofit does not have the bandwidth to undertake this on your own, our consulting and outsourcing team can assist.

This blog contains general information and does not constitute the rendering of legal, accounting, investment, tax, or other professional services. Consult with your advisors regarding the applicability of this content to your specific circumstances.

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