Reconciling The Differences Between Your Advancement and Accounting Offices

Reconciling The Differences Between Your Advancement and Accounting Offices
November 16, 2020 James Werner

In a year besieged by a pandemic that’s fundamentally altered the way we live, many higher education institutions have been forced to look at their advancement practices differently- from an office that encourages growth to an office that keeps the university afloat.

Fundraising, no matter the circumstances, comes with its own unique set of challenges when you’re reconciling alumni gifts between the advancement office and the accounting department. 

How do you keep the advancement office afloat? Aligning your advancement office’s books with your accounting office’s books.

Different Standards, Same Goals: Get Your Advancement And Accounting On The Same Page

The two offices may be across campus from each other or simply down the hall, but the differences between the accounting and advancement offices are even farther from each other. There are different:

  • Industry standards
  • Priorities
  • Systems

There are different industry standards. 

They have different priorities. 

  • Advancement offices are just as concerned about the background information of their constituents as they are of the gifts they receive. 
  • The accounting team is more concerned with the bottom line – the money.  

They use different systems. 

The systems the accounting and advancement offices use aren’t always 100% compatible with each other, so much of the data must be moved digitally or manually across systems. 

  • If data is imported digitally, there is a risk of data being inaccurate or wrong.
  • If data is inputted manually, there’s a much higher likelihood of human error to occur.

In addition, discrepancies can also be found due to overpayment of pledges and disbursement changes after a pledge is made.

The best way to counter these challenges and make your reconciliation processes as streamlined and accurate as possible is to establish methods and procedures that satisfy the needs of both your advancement and accounting teams.

Best Practices (in Gift Reconciliation) Make Perfect

To create efficient and dependable communication between your advancement office and the accounting department, you need to establish a set of best practices.

  1. Determine how your accounting team operates so you know how to report gift receipts to them. There are two primary methods of receiving money:
    1. Cash Method – Money is only counted when it is in hand.
    2. Accrual Method – Money is counted when the pledge is made, even though money may not be received for months or even years later.
  2. Create account numbers that can be tracked easily across the departments. By using the same general ledger numbers to identify contributions, you can ensure the constituent database and accounting systems are in alignment. 
  3. Perform financial close at the end of each month. If left to quarterly or annual reconciliations, you can get bogged down with the sheer number of transactions you have to process. Plus, monthly reconciliations will help you catch errors or other issues in a timelier manner.

A Better Way to Reconcile Your Alumni Gifts

Affinaquest can help you create the best practices that help your advancement office input information correctly and helps you work in sync with the accounting department. 

With the SmartBatch interface, the commitment type (cash, check, pledge, etc.) can be accessed through a dropdown menu. Once you select the type of donation, a data entry screen specific to that commitment type comes up so you input only the information you need to collect. You can also document:

  • Donation amounts
  • Payment schedule
  • Disbursement assignments
  • Acknowledgment requests
  • Reason for the gift

Built on the Salesforce platform, Affinaquest saves constituent data so anytime you enter a commitment for a repeat donor, all of their personal information is automatically populated for your convenience and accuracy. Default values can also be created so you don’t have to populate the same fields over and over again for the same type of commitment. 

While some older legacy systems allow the user to make changes directly to existing transactions without maintaining any type of audit history, Affinaquest doesn’t allow edits to existing records once a transaction has been input

If a mistake was made or a change needs to be documented, the transaction has to be voided and replaced with a new record. This keeps the transaction history safe and secure with a definitive record of what’s happened. 

Also, Affinaquest helps you reconcile overpayment on pledge commitments

For example, if a constituent pledges $10,  but then pays $125, this can cause a discrepancy in accounting. The original pledge of $100 has already been documented and that’s the amount that needs to be reconciled. To do this while giving credit for the extra $25, the extra money is documented as an additional gift tied to the original pledge. This reconciles the original pledge while adding the additional donation to the ledger. 

Re-disbursement of funds can also be a challenge without the right software solution to help you sort it out. 

If a constituent pledges $1000 quarterly to the journalism department but later designates half of their 3rd quarter donation to the president’s discretionary fund, this can create a reconciliation discrepancy. Affinaquest allows you to make changes to the ledger inside SmartBatch so accurate dollar amounts are documented and sent to the accounting department. 

From your advancement office to the accounting department, it’s time to work with a solution that can help you reconcile your gifts accurately and efficiently. Schedule a demo to learn more about how Affinaquest can help your advancement office reach its next fundraising goal.

The Affinaquest Advantage

At Affinaquest, we know there have been differences between various generations of donors and how they interact with their schools in the past. However, many of those differences are now being stripped away as we embrace this new normal brought on by COVID-19. 

Comfort levels with technology are becoming stronger as more people acclimate to a more remote lifestyle. That’s why we’re proud to have our CRM built on the Salesforce platform. As Salesforce is constantly evolving to adopt new technology, our CRM continues to future-proof itself through this partnership giving you the tools to be adapt and succeed. 

Ready to secure better opportunities for advancement for your institution? Request a demo and see how Affinaquest can give you an advantage in creating an engagement score system that helps you create and nurture the constituent relationships you need to secure the funds for your school’s future. 

Connect with and cultivate your constituents in one powerful system.