The CMDS - a registered practice with the South African Institute of Chartered Accountants which acts as accounting officers for organisations that choose not to have an independent audit - believes that 2014 is a year for leaders of nonprofit organisations (NPO) to become more financially alert and astute and so be more aware of financial dangers and pitfalls as well as new opportunities for broadening income streams and building financial sustainability.
In these unpredictable times in the sector, it is only the organisations that have implemented good strategies for financial sustainability that will successfully ride the storms ahead. Consequently, CMDS plans to, once again, offer workshops on financial sustainability in 2014. In addition to the usual one-day workshop introducing strategies for financial sustainability, CDMS is planning an advanced workshop at which it will focus particularly on possible ‘business models’ for NPOs that focus on income generation through the provision of services, trading and investment. This workshop will consider some of the dangers and pitfalls associated with such models, as well as the opportunities.
The CDMS will also try to ensure that NPOs are updated, through its news and the website, with the constantly changing issues related to employees' tax and the South African Revenue Services (SARS). The Employment Tax Incentive Act is one recent development which presents some opportunities for NPOs (as employers). CMDS also plans to offer information sessions related to payroll and to some of the dangers and pitfalls relating to SARS and the law. The failure to pay over Pay As You Earn (PAYE) and other taxes to SARS results in steep penalties and interest and has already caused many organisations to close its doors. Be aware, be astute - pay SARS first!
Another issue that has tripped up some organisations has been their extensive use of cash to make payments (because they thought the use of large amounts of cash was unavoidable or enabled them to save money). The dangers and pitfalls of using cash to make payments are significant so CMDS intends, in the second half of the year, to offer its one day workshop on this topic, entitled ‘Cash and Accountability’. In dealing with cash, as with all areas of financial management, there is a cost to implementing effective control - financially astute NPO leaders need to weigh up this cost against the risks and benefits of increased control.
Aside from these open, ‘public’ workshops, CMDS is also available to facilitate and run workshops specifically to any organisation or a group of organisations - some topics that have proved particularly popular with, and helpful for, NPOs include:
- Financial management for project managers;
- Risk assessment and management for NPO boards;
- Activity-based budgeting;
- Effective cash flow management; and
- Understanding NPO financial reports.
Contact CMDS if you are interested in any of these workshops.
The open training schedule for 2014 will be finalised and available by the end of January, giving NPOs the opportunity to consider which areas of capacity development could benefit them.
We wish you every success in 2014.
For more information, email: email@example.com.
For more about the CMDS, refer to www.cmds.org.za.