Arts & Culture

WHITEPAPER: Your Business Office is Closely Linked to Mission Success

Blackbaud's Arts & Culture All Access Pass | Resources for Zoos, Aquariums, Museums, Gardens, Science and Performing Arts Centers | General Admission, Reserved Seating and Foundations

Issue link: https://arts.blackbaud.com/i/946071

Contents of this Issue

Navigation

Page 2 of 8

What does the Business Office do that impacts decision-making strategies? Generally, the effective Business Office must be independent, understand the organization's short and long- term financial goals and support, and provide resources to build strong program and fundraising capacity. Accurate, timely, and interactive accounting and financial systems provide the financial data necessary to build a compelling mission and fundraising case. The Business Office is responsible for an appropriate organizational cost structure that must be sustainable over time. It must identify and provide data to achieve key financial goals that support and drive mission priorities. Running unrestricted net asset surpluses, building net assets to invest, turning new ideas into program reality, creating time to plan, and providing the human and state-of-the-art IT resources keep the organization competitive. The Business Office must provide and advocate for the resources to grow, even start, a robust Fundraising effort. There are a number of specific ways in which the Business Office influences organizational decision-making: • Cash and access to cash can present an existential challenge to even the strongest of missions. Effective cash management systems (A/R, A/P, access to cash though loans, lines of credit, banking relationships, and payroll) rely on collecting cash efficiently, ensuring contractual timing of cash receipts, paying properly coded bills on a timely basis, and planning for cash needs when cash flow statements signal periods of need. The A/R accountant who can bill on a timely basis, efficiently track receivables, produce aged reports, identify the source and funders, and follow up with senior management plays an important role in keeping an organization moving forward. Nonprofit organizations averaging close to one to two months of available cash (if that) often feel it is financially prudent to manage according to short-term cash availability instead of the bigger-picture accrual system of accounting, required by GAAP. Decisions that emanate from limited, often short-term cash concerns, such as curtailing programs, postponing or not hiring critical staff to meet current or future needs, limiting administrative and development capacity, and seeking ill-advised merger partners do not serve the organization's long-term interests. Instead of becoming a proactive, forward-looking organization energized by innovation and mission success, the organization moves into a reactive, cash-driven position, a downward spiral waiting to happen. The Business Office needs to stay ahead of the cash flow curve. Identifying potential cash reserves and assets—including, but not limited to, fixed assets and Board-designated investments—that could be sold can mitigate potential harm. Otherwise, Finance Committees have been known to review bank balances on a short-term basis, a job and level of responsibility that does not serve anybody's interests. Management will resent the intrusion and an organization can become mired in a conflict over fiduciary oversight, shifting the state of mission momentum and drive from one of forward-thinking strategic vision to one of financial sclerosis. 800.443.9441 solutions@blackbaud.com www.blackbaud.com | September 2017 3 |

Articles in this issue

Links on this page

view archives of Arts & Culture - WHITEPAPER: Your Business Office is Closely Linked to Mission Success