The client was a nonprofit organization receiving donations from multiple donors, who funded different programs for at least a year with specific sub-classifications. Reporting on fund utilization was crucial, as donations were received in installments, and timely and accurate reporting was necessary to receive future installments.

   The client struggled with basic bookkeeping and closed their financial statements only once a year, four months after the end of the year. They were unable to provide accurate reports on fund utilization to donors in a timely manner, resulting in delays in receiving future installments. Without faster and accurate reporting, the client sometimes overspent or spent money received for one program on another, disrupting business operations.

Following steps were taken to resolve the situation

1.Document collection and maintenance: The client entered into an MOU with all donors, containing information on the amount of donation, timeline for the program, timeline for donation installments, structure of the program, and division of funds for the actual program and central admin activities. The details were summarized in an Excel library, which helped identify defaulting donors.
2. Introduction of cost centers in accounting: The client did accounting in Tally software, exported records to Excel, and separated transactions by donors/MOU, which was inefficient. We recommended maintaining the books using cost centers, which enabled quick checking of positions per donor/MOU and easy changes.
3. Cleanup of books and making books current: Completed accounting was scrutinized to ensure all transactions were recorded, and income statement transactions were properly tagged with correct cost centers, which took substantial time.
4. Issues with bill processing: Bill approval was a major issue, as bills were manually approved by 5-7 approvers, resulting in poor visibility over the process, disputes, and poor vendor payments. We digitalized the process using a custom tool and an online database software called Knack, resulting in quicker and clearer approvals and better vendor visibility.
5. Bill data preparation for vendors: Unorganized vendors sometimes sent incomplete invoices, causing delays in approvals. We started sending data for vendor invoices to vendors from our side, resulting in time savings and fewer rejections.
6. Better AP forecasting: Digitizing the AP approval resulted in better record-keeping of payables and better cash-outflow forecasts.
7. Faster month-end close and accurate MIS: The above helped achieve faster month-close activity, and cost center-wise bookkeeping enabled donor/MOU-wise, sub-activity-wise financial reports to be presented accurately and timely, resulting in timely release of funds and reduced misutilization of funds.
8. Scaling: Better record-keeping and prompt reporting resulted in better control over business, enabling the client to focus on core activities and negotiate more donors, resulting in an increase in overall activity.