For nonprofits, year-end isn’t just about closing the books—it’s a vital opportunity to set the stage for future success. Whether your organization’s fiscal year ends in December, March, or June, proper preparation and financial oversight during this time can have a lasting impact on your nonprofit’s ability to thrive. Getting it right means more than just staying compliant; it means unlocking opportunities to improve operational efficiency, secure critical funding, and position your nonprofit for long-term sustainability.
In this guide, we’ll share 3 mission-critical tasks you should address to prepare your nonprofit’s finances for 2025.
If you’d like more strategies to improve your organization’s financial resiliency, and engage with a team of NPO financial operations experts, join Enkel’s upcoming webinar: Preparing Your Nonprofit’s Finances for 2025: A Roadmap to Success.
Join our upcoming webinar: “Preparing Your Nonprofit’s Finances for 2025: A Roadmap to Success”
Ready to ensure a strong start for your nonprofit in 2025? Our expert-led webinar will guide you through actionable strategies to boost your financial resilience and set your nonprofit up for success. Don’t miss this opportunity to learn from industry experts and take control of your nonprofit’s finances!
What you will learn:
- How to increase unrestricted revenue in Q4.
- Strategies to engage funders early and secure 2025 commitments.
- Key financial metrics every nonprofit should track for sustainability.
- How to modernize financial operations and optimize costs for 2025.
Register now to secure your spot!
Year-end task 1: Conduct a year-end cost review
One of the most effective ways to start preparing for 2025 is by conducting a thorough year-end cost review. This process allows you to identify inefficiencies, eliminate waste, and ensure your resources are being used wisely as you head into the new year.
How to Conduct a Cost Review:
- Review Your Largest Operating Expenses: Start with high-cost items like rent, salaries, and major contracts. Are any of these up for renewal? Can they be renegotiated?
- Identify Recurring Expenses: Look for subscriptions or services that are underused or can be consolidated. For example, could a single software platform replace two or three separate tools?
- Leverage Financial Data: Use your accounting software to generate real-time reports. Having accurate, up-to-date information will help you make informed decisions on where to cut costs.
When to Address This:
Begin your cost review 2-3 months before the end of your fiscal year to allow time for planning and adjustments before the new year begins.
How Long It Takes:
This process could take 2-4 weeks, depending on the complexity of your organization’s finances and the number of contracts or recurring expenses to review.
Who to Involve:
- Finance team (Bookkeeper, CFO, or Controller)
- Executive Director
- Department heads for input on specific costs
- External financial advisors, if needed
Tools & Resources:
- QuickBooks Online for real-time financial reporting.
- Cost Review Template to help guide you through the process: Download Template.
Year-end task 2: Engage funders early
Early engagement with funders is crucial for ensuring financial stability in the upcoming year. Waiting until the last minute to connect with donors or funders can lead to missed opportunities and added uncertainty.
Steps for Engaging Funders:
- Schedule Conversations Now: Don’t wait until the new year—reach out to your key funders before the year ends. Share your 2024 impact, provide transparent financial reports, and discuss your plans for 2025.
- Align Your Mission with Funders’ Goals: Ensure that your nonprofit’s priorities still resonate with your funders. If their goals have shifted, be ready to adapt your programs or approach to keep the relationship strong.
- Prepare Financial Data: Funders want to see transparency and accountability. Share detailed, data-driven reports to show them how their contributions are being put to good use. Accurate and clean financials can increase trust and encourage continued support.
When to Address This:
Reach out to funders 3-6 months before the new fiscal year begins to allow time for conversations and funding negotiations.
How Long It Takes:
Depending on the number of funders and the depth of relationships, the process could take 4-8 weeks, including scheduling meetings, preparing financial reports, and following up.
Who to Involve:
- Development team (Donor relations or Fundraising staff)
- Executive Director
- Financial team for preparing reports (Bookkeeper, CFO)
- Board members for support with high-level funders
Tools & Resources:
- CRM Systems (e.g., Salesforce Nonprofit, Bloomerang) for donor tracking and communication.
- Fundraising platforms for easy data integration and transparent reporting.
Year-end task 3: Review & optimize your financial operations
Outdated financial processes can slow down your nonprofit and create unnecessary complications. As you close out the year, it’s the perfect time to review your financial operations and consider modernizing with the right tools and systems.
Steps for modernizing financial operations:
- Switch to Cloud-Based Accounting: You probably know about QuickBooks Online, but QuickBooks Online Advanced typically gives NPOs greater flexibility and access to real-time data, allowing you to make faster, more informed decisions.
- Automate Where Possible: From payroll to expense approvals, automation can save your team time and reduce errors. Consider using tools like Plooto to streamline disbursement processes and ensure financial controls are in place.
- Integrate Systems: Ensure that your accounting, fundraising, and donor management systems are integrated. This will improve your ability to generate comprehensive reports and allow for better decision-making.
When to Address This:
It’s better to start sooner, rather than later. Start evaluating your financial systems 4-6 months before your fiscal year-end. Implement changes during a low-volume period, so your team can adjust to new systems without disrupting operations.
How Long It Takes:
Implementing new tools or automating processes can take anywhere from 2-4 months, depending on the size of your nonprofit and the complexity of your systems.
Who to Involve:
- Financial team (Bookkeeper, CFO, Controller)
- IT/Operations team (for tech setup and integrations)
- External financial consultants or tech specialists for system migrations
Tools & Resources:
- QuickBooks Online for cloud-based accounting.
- Plooto for automating payments and expense approvals: Learn More.
- TechSoup Canada for discounted nonprofit software tools: Explore Resources.
Need help improving your organization’s financial resilience in 2025?
Preparing for 2025 requires intentional planning and financial oversight. By conducting a year-end cost review, engaging with funders early, and modernizing your financial operations, your nonprofit can start the new year on solid footing.
Don’t leave these critical tasks until the last minute. Start now to position your organization for success and ensure you have the financial resilience needed to achieve your mission in 2025.
Reminder: Be sure to register for our upcoming webinar, “Preparing Your Nonprofit’s Finances for 2025: A Roadmap to Success”, where we’ll provide even more insights and expert advice to help you strengthen your financial future. Register now!
At Enkel, we work with Canadian nonprofit organizations to provide reliable, accurate monthly bookkeeping, payroll, accounts payable, and controllership services. If your nonprofit is looking for a bookkeeper to handle the books, get in touch with us today to learn more about our nonprofit accounting services.