When spending money on one’s organization, it’s pretty easy to fall into what I call the “cost trap”.
Particularly when one is a solopreneur, there’s a tendency to think of expenses as money coming out of one’s pocket instead of as an investment into one’s organization. It stems from adopting a scarcity mindset (rather than framing one’s experience from abundance) and also is seen quite a lot when one attaches oneself very closely to one’s occupation. (But that’s a whole other conversation.)
The problem is compounded when framing every investment opportunity against the direct revenue this allocation is likely to create.
So before introducing this week’s guest here on Relish THIS, I’ll relate a quick tale.
When I first started my life as an entrepreneur, I had a tendency to fall into this “cost trap”. I viewed every expense through the lens of “how does this make us money” and neglected the other benefits investing in support, resources, tools, etc. could bring to an organization. I know now that there are many intangible benefits to investment, including boosts in morale, comfort, and the like, as well as time savings (both direct and indirect saving accrued simply by no longer having to think about an activity needing to be accomplished).
For me, one of the first places this type of investment attitude paid off was in bookkeeping.
Every month I dreaded doing our books. I didn’t enjoy it and knew I wasn’t great at it. I tended to put it off until the last minute and then fret about it after I was done. Neither, any good bookkeeper will tell you, are good for the health of one’s books.
So I overcame the “this cost won’t make me money” demon in my head and hired a bookkeeper. Mischa has been helping us ever since and I don’t think I have once questioned the “cost” of her engagement. It freed up a ton of noise in my own head and I know our books get done correctly and on time each month. Now THAT was a great investment!
So coming back to my guest today on Relish THIS. Alex Romero is one of the financial masterminds (her “real” title is Virtual CFO) at Chris Hervoshon CPA. They are a virtual CPA team that helps nonprofits get their financial house in order so that they can confidently serve their constituents most effectively.
Alex is just great. She has been working in the nonprofit space for years and shared a TON of valuable information during our conversation to help your nonprofit navigate bringing on a CPA to help you stay compliant with state and federal regulations and have a healthier understanding of your nonprofit’s financial status.
Of course, we talked about the cost vs. investment conundrum as well as what you need to know before bringing on a CPA, ways to bridge the gap between DIY and hiring an expert, and ways to get really proactive about your finances so that you can be able to run your organization most effectively. We dove into managing and tracking grants and donations as well, so there is a LOT of great information in this episode.
Whether you are just getting started with your organization or have been up and running for years, there’s something for you in this episode. I hope you have as much fun with it as I did.
Better Way CPA
Start a spreadsheet to track any money that you get through your door at your nonprofit. Just start tracking and keeping records.
Listen to the podcast here: