A shocking study by the University of Notre Dame’s Mendoza College of Business has discovered that non-profit organizations make accounting errors at an alarming rate. The culprit? Many do not devote the appropriate time or financial resources to administrative aids that would ensure accuracy.
While Oversight Insights On Demand™ focuses on technology for larger, for-profit organizations, the premise of the study struck a chord. Our software is a tool organizations use to both save time and money: saving time by streamlining the audit process, and saving money by rooting out instances of fraud, waste, or misuse. Still, only a fraction of these companies are utilizing us.
In last year’s Spend Analysis Report for T&E, we proved just how much money Oversight Insights On Demand™ potentially saves the customers who do leverage our technology. We found that for a spending program with an average of $10 million in annual spend, $500,000 of that money was potentially non-compliant with company policy.
So we’re saving money, yes, but automated transaction analysis doesn’t just make good financial sense, it also serves as a reminder to board members and stakeholders that your organization is committed to accuracy, excellence, and being fully compliant.
Non-profits are at a disadvantage because many operate on tight, shoestring budgets, with much of the money they take in from donors or grants going to the causes they serve and not for operational efficiencies. It’s a shame non-profits often can’t afford administrative help for the accounting and spending programs, as their funds are often heavily scrutinized by donors and the IRS. They could use such technology to avoid violations and ensure stakeholders that everything is “above board.”
Limited funds for fancy technology is a valid reason for account errors, in my opinion.
But what about the companies who run large spending programs and do possess the financial resources to spend on a technology such as ours?
Non-profits are clearly operating in a different playing field than what our technology seeks to address, but the premise of the study is clear: don’t skimp on support for your expense or accounting programs. You never know what you could be leaving out, missing, or paying for over and over again.