Regardless of your business, accounting can be a stressful experience. It can be even more stressful when it comes to grant payment accounting because of the rules and regulations typically associated with grants. Whether you are receiving or giving grants, tracking all of your incoming and outgoing payments is critical.
With that in mind, below we’ll explore the best practices for efficient grant payment accounting.
There are several reasons that proper grant payment accounting is so important. These reasons include, but aren’t limited to:
With grant payment accounting being so important, what are the best practices for doing it efficiently?
The use of automation reduces the burden on your organization’s time and resources. It also helps reduce the risk of errors. Improving accuracy is a natural byproduct of automation because when numbers are pulled automatically for example, it’s less likely for errors to occur. With manual data entry on the other hand, it’s much easier to mistype additional zeroes, forget to add a digit, or worse.
What does automation look like in terms of grant payment accounting? Typically, it means using software to track your incoming and outgoing payments for you.
But, it can also involve using if-this-then-that style software such as Zapier that triggers emails to go out to you and/or your team members when:
When you utilize software to automatically manage payments this becomes much easier. However, even if you don’t, having a payment schedule is a good idea for grant payment tracking. Sticking to a schedule helps ensure payments are made on time. It also helps your organization keep up with financial reporting and compliance requirements. In turn, it builds trust and transparency with both your grant recipients as well as your stakeholders.
Double checking and triple checking records never hurt anyone! It’s better to be thorough than not thorough enough. Unfortunately, in the digital age, bad actors are constantly seeking ways to get their hands on money that isn’t theirs. The organizations that track and monitor are better equipped at catching problems early on which can save them hundreds if not hundreds of thousands of dollars.
Put another way, implementing and maintaining internal controls helps to ensure any financial transactions outgoing or incoming are authorized, recorded, and reviewed.
We’ve already alluded to this a few times within this post, but software is a critical component in grant payment accounting. Not only can it help your organization manage your data more efficiently and effectively, but it can also help with automation, reporting, and improving transparency.
Proper training goes a long way in any industry, but it becomes even more important when a lot of money is on the line. At a minimum, your team members must be trained in:
Just like you can’t review reports too frequently, you also can’t give “too much training.” With both small and large grantmakers, it’s always better to be safe than sorry.
To make things easier on everyone in your organization, here are just a few solutions you may want to consider implementing in your grant payment accounting:
One example of an organization that has implemented best practices and solutions for efficient grant payment accounting is the Bill & Melinda Gates Foundation. The foundation is a global organization that works to improve healthcare and reduce poverty, and it manages billions of dollars in grant funds each year.
Though they do not publicly disclose what software they use, considering they were started with the founder of Microsoft, they no doubt use software to automate their payments, reports, communications, and more.
Overall, the Bill & Melinda Gates Foundation's implementation of best practices and solutions for efficient grant payment accounting has helped it to effectively manage its grant funds and maximize the impact of its grant programs.
The level of transparency they subscribe to can be achieved with your organization as well.
In summary, proper grant payment accounting is crucial for both big and small grantmaking organizations. This includes your grantmaking organization!
Efficient grant payment accounting:
To recap, the best practices for efficient grant payment accounting include:
Organizations should also consider adopting cloud-based grant payment management software, outsourcing grant payment accounting to a specialized provider, hiring a dedicated grant accountant or team, and using blockchain technology for secure and transparent payments.
So, where do you go from here? The case study we shared above was just one example of how an organization has implemented the best practices as well as solutions for more efficient grant payment accounting. Though you might not be dealing with nearly the level of incoming and outgoing funds that the Bill & Melinda Gates Foundation is, it doesn’t mean you can’t use top of the line technology to make your accounting easier on you and your organization.
Enter SendGrant, the software solution that helps you distribute award money, keep tabs on where the money is at any given time, and run reports with the click of a button. With SendGrant, you never have to worry about transparency because the program keeps a digital transaction log as well as a client portal for you, your team, stakeholders, and more to refer back to whenever necessary.
The top priorities at SendGrant are:
We make it easy to hold your organization accountable, and simplify the grant payment accounting process.
Our software was developed by the same team that developed SmarterSelect. With 15+ years in the grant and scholarship space, we have a deep understanding of the pain points organizations just like yours face on a daily basis.
Let us help you make your accounting process easier. Click here to join the pre-launch and see what SendGrant can do for you!