Food Bank Financial Processing: Best Practices for Aligning Fundraising and Finance

For food bank organizations, it is critical to maintain accurate financial information. Detailed payment data logged within your CRM must match the deposits within your bank account. Gifts must be correctly attributed to the right donors and quickly recorded to promptly thank donors. This accuracy ensures your organization meets accounting standards while maintaining transparency with your donors. However, when gift processing and finance teams operate in siloes, discrepancies can occur, and it can be difficult to determine variances in payments versus actual deposits. In this blog post, we will identify financial reconciliation best practices for food banks. These practices will alleviate administrative headaches while they foster team camaraderie and empathy – who knew financial processing could get so deep!

The Roles of Gift Processing and Finance

It can be common for finance and gift processing teams to struggle to reconcile payments. Many times, these challenges arise from a lack of understanding between the roles and responsibilities of these teams.

The gift processing team considers the overall donor experience and prioritizes providing timely receipting. This team ensures that all donations are accurately reported within the CRM.

Whereas gift processing prioritizes the donation at hand, finance considers the overall financial health and wellbeing of the food bank. This team audits accounts payable and receivable and balances the general ledger along with payments at the department or fund level. Above all else, finance wants to ensure that the food bank adheres to GAAP (Generally Accepted Accounting Principles).

Common Financial Reconciliation Challenges for Food Banks

Infrequent reconciliation processes create a significant amount of manual effort in reviewing gifts at month end. Furthermore, with clunky or nonexistent CRM systems with complex reporting, it becomes difficult to determine variances. Many times, gift processing teams may have different reported amounts than the finance team. Finally, if payment adjustments appear as regular payments this can cause additional confusion for the finance team.

Financial Reconciliation Best Practices for Food Banks

To adhere to the needs of both the gift processing and finance teams, there are several best practices for food banks to follow.

Develop a set of processes

Identify all your gift sources such as lockboxes or online gifts. Next, determine all your payment processors, fees, and dates – including the differences in dates such as the deposit date versus the transaction date.

With this information in hand, your team can utilize a deposit advice to complete monthly reconciliations. A deposit advice confirms all details regarding a deposit into an account. This information could be the amount, date, or account information.

Given this method, the gift processing team processes any incoming batches from the food banks’ various gift sources. The finance team then takes this deposit and creates the deposit advice with the goal of matching the gift batch with the deposit advice.

This comprehensive approach to reconciliation offers a multitude of benefits. It provides teams with the detail required to determine any issues between the batch amounts and the deposited amounts. Furthermore, it allows teams to use reversals and adjustments to mediate any issues.

Finally, once the team agrees to a set of processes, create SOPs (Standard Operating Procedures). This documentation provides helpful guidelines and ensures future team members will be properly onboarded.

Utilize CRM or portal technology

Nonprofit CRM systems such as StratusLIVE 365 can streamline financial processing for food banks. With capabilities, such as advanced finds, gift processing teams can quickly identify and correct common errors.

Development teams can leverage portal technology to make changes to gifts or request additional documentation for a gift. Other features could include the ability to merge constituent records or code an incoming gift. This guarantees that a gift is properly classified even before it is made.

Facilitate open communication among finance and gift processing teams

It’s critical to align both finance and gift processing teams early in the process. This ensures both team’s requirements are met, and each team understands their role in the reconciliation process. Host regular meetings – perhaps on a weekly cadence – to review errors. Regular communication and collective problem solving creates mutual understanding and even empathy.

Finally, celebrate your successes! Once you create a set of standard operating procedures implement a new system, or reconcile on a timely basis, recognize this accomplishment. Whenever a big gift is received, ring a bell, alarm, or play a song not only notifying the finance team but generating positive buzz throughout the office.

Creating efficient nonprofit financial processing procedures can be a tedious and time-consuming endeavor. However, once teams are aligned and systems set in place, food banks and other nonprofit organizations benefit from accurate gift data that demonstrates transparency and a commitment to overall organizational health.

Frequently Asked Questions (FAQ)

Q: What is a deposit advice and why does it matter?

A: A deposit advice is a financial record created by the finance team to match incoming gifts to bank deposits. It details amounts, dates, and accounts, making it easier to reconcile CRM gift batches with actual financial transactions.

Q: How often should reconciliation be done?

A: Weekly or daily reconciliation is ideal. Monthly-only reconciliation, while common, often creates time-consuming variances that are harder to resolve.

Q: Who should be involved in reconciliation meetings?

A: Gift processing and finance teams should both attend. Regular collaboration ensures each team understands how their data inputs affect the other, and it promotes shared accountability.

Q: What CRM features support reconciliation?

A: Advanced finds, deposit batch linking, and error-reporting dashboards are essential tools. StratusLIVE 365, built on Microsoft Dynamics, is designed with these nonprofit financial needs in mind.

Q: How do portals improve change request workflows?

A: A centralized portal lets development staff request coding changes, document retrievals, or constituent merges without relying on email. This improves transparency, reduces bottlenecks, and creates an audit trail.

Q: What’s the biggest mistake to avoid?

A: Not involving both teams early in the process. Alignment from the outset—especially during CRM transitions or busy giving seasons—is critical to long-term success.

To learn more about how StratusLIVE 365 facilitates effective financial processing for food banks or other nonprofit organizations, get in touch!