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10 Symptoms of an Inadequate
Financial Reporting System
Symptoms
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Department or program managers have created their own reports, outside the accounting and financial management
system. Almost half (48%) of nonprofit CFOs said their staff understood the financial health of their own programs but
lacked awareness of the overall organization's financials.
Reports contain revenue and expense information but no operational performance or outcomes. In fact, 60% of
nonprofits felt moderately or highly challenged by the lack of a consistent framework for measuring and reporting
impact.
Poor internal controls or inadequate reporting place grants and donations in jeopardy. Donors want to see impact and
compliance. That's why 61% of nonprofits recently received funder requests for more information about impacts and
outcomes.
Lack of project accounting functionality impedes management capabilities. Program managers need to be able to easily
allocate expenses and revenue across programs, and see real-time performance metrics and budget-to-actuals for their
programs.
Inability to view consolidated, multi-entity reporting deprives executives of top-level visibility. In multi-entity nonprofits,
program staff needs granular details, but the CEO and board often prefer a rolled-up financial picture. A good reporting
system should provide both.
4
Blue Avocado, "Adding It All Up: Nonprofit CFO Study," Jan Masaoka and Steve Zimmerman, October 22, 2013.
5
BDO, "Nonprofit Standards, a Benchmarking Survey," June 2018.
6
BDO, "Nonprofit Standards, a Benchmarking Survey," June 2018.