However, it's important to note that many of these funding resources also require an outside firm to either audit the books or prepare a financial statement for them. While many companies turn to board members who understand how to prepare this process, it's a better tactic to hire an outside accounting firm to verify the information.
By having an independent audit completed every year, a non-profit can show a potential grant-funding resource that their organization has gone through the extra step to verify to them that their organization has checks and balances on its funding resources. A professional audit gives each foundation a clear indication that the non-profit is willing to demonstraten its financial responsibility for the money granted to them.
While a non-profit should get a professional accountant to serve on their board of directors, it's better to have an independent agency perform that independent audit. While some non-profit executives may at first question the cost for these audits, they will find that it similar to what banks expect of their commercial customers. Just like a business that wants to get funding from a venture capitalist or a bank, an independent audit provides verified data to those providing a grant.
Accounting firms like ours can provide an estimate of the costs and the services provided in an audit. As non-profits prepare their annual budgets, it's best to program the costs of an outside audit as a tool to help increase the viability of grants and corporate donations.
-- LeAnn Carlson
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