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Spend management for Non-profits: Essential survival strategies
As the world faces a pandemic the likes of none we have seen before in recent times, the essential work and assistance that non-profit organizations carry out has become far more noticeable as being a vital part of helping those in need. These non-profit organizations have also seldom seen a more challenging time, as governments across the globe allocate scarce resources to fighting COVID-19 and preventing economies from collapsing, in a precarious balancing act where uncertainty dominates. Spend management for non-profits is critical in the current economic climate.
In order to survive these difficult times, it is essential for non-profit organizations to put processes in place—financial and process-driven strategies—in order to maintain operations, attract donors and continue to make a difference in the lives of those who need it the most.
In this article, we present best practices gathered from a selection of leading non-profit organizations as well as mature Fraxion customers in the non-profit industry. These strategies will enable you to succeed in the short term during this global pandemic, as well as prosper in the long term after the crisis has abated.
Spend management strategies
Manage restricted and unrestricted income
Continuing to assist prospective donors to identify where their funds will be allocated, prevents confusion and helps you to continue managing spend wisely. During the current crisis, even more funding drives will be occurring, with continued support from various arenas for non-profit organizations worldwide. Clearly allocating resources to specific activities and tasks enables your organization to raise funds while maintaining strategic spending habits.
Cost control is crucial for the survival of your organization right now. Cutting unnecessary expenditure and reducing your operational overheads frees up funds that can be redirected to other areas.
Deploy remote solutions for field workers
The nature of non-profit organizations means that most employees are not necessarily office-bound; more often than not, the majority of employees are out in the field, reaching out to those in need. Currently, even most office-based employees have had to adjust to working from home, as various isolation strategies have been put in place to reduce the risk of infection. In order for your organization to continue functioning optimally, it is vital to enable remote work for your field workers and for those who are working in self-isolation from home.
Improve process efficiency
Manual internal processes are time-consuming and expensive to maintain. These drawbacks and process inefficiencies have been highlighted due to employees working remotely during the COVID-19 pandemic, and should be addressed. Automating these processes allows you to save time and money, which improves the availability of resources, enhances productivity and increases available cashflow.
Provide transparency and robust approval systems to donors
Donors appreciate insight into how their funding is allocated. Being transparent in having sound budgets and audit trails, along with stringent approval systems, shows that donations are being allocated within a prudent fiscal process, which encourages future funding.
Identify necessary spend
Before incurring any costs, it is important to identify what should be spent, compared to what is available for spending. Analyzing your spend will enable you to allocate budgets to various projects, causes or drives, based on various classifications of donations. In addition, the ability to manage when spend occurs will increase cashflow and create further opportunities to reduce costs.
Spend management software—overcoming challenges
A robust spend management software solution will enable you to overcome the challenges we face today, as well as apply all of the essential survival strategies outlined above.
- In addition to general ledger account-based budgets, an end-to-end procure-to-pay solution enables you to create budgets for restricted, temporarily restricted and non-restricted funds, tracking how donations are spent and managing alerts when transactions occur.
- Overheads are greatly reduced, as manual processes are replaced by automated ones, freeing up time and resources for more essential services.
- Remote working capability is easily attained, as spend management solutions are hosted on the cloud and can be accessed via any device, at any location and time. This is vital in these times, where non-profit organizations have moved from having dozens or hundreds of offices with multiple employees based at each office, to having no offices with dozens or hundreds of home-based locations. The only way to scale this is a true cloud solution.
- Spend management solutions provide robust approval systems, alerts and notifications, audit trails and budgeting capabilities, allowing you to be transparent about spend to your donors.
- Spend analysis and visibility are part of the integral core of spend management solutions. Not only does this enable you to align and streamline your processes organization-wide, it also allows for data-driven strategic planning.
How can we help you?
Fraxion has a true cloud-based spend management solution, with remote deployment capability and a comprehensive, powerful suite of tools to deliver in-depth spend management functionality. Fraxion can be deployed as a standalone solution, or it can be integrated with your existing accounting system or ERP. With Fraxion's spend management solution, you can proactively manage purchase requisitioning, expense management, procurement processes and spend analysis.
Stanton Jandrell, Fraxion CEO, addressed the challenges that non-profit organizations face today in a recent webinar. Watch the webinar, to learn more about how your organization can overcome difficulties during this global pandemic.
Fraxion has a dedicated division for non-profit organizations, which is focused on ensuring that NPOs achieve the best procurement solution, at affordable levels.
Drive accountability and change spending behavior across your organization— contact a Fraxion representative for more information on spend management for Non-profits.