How Fast Should A Nonprofit Board Get Financial Reports?

Financial reports should be received in time for nonprofit boards to make important decisions.  What does timely mean to you? Some surveys say within six days of the end of the month.  I would say more commonly within 10 to 15 days of month end.  But most importantly - in time for your next board meeting. For example, if your board meeting rhythm is the third Thursday of the month, then financials should be ready several days before to review prior to the meeting. 

Yet, I have found that many boards accept reports that are much older.  I commonly see 45 to 60 days.  The challenge with old reports, is looking in the rear-view mirror of the financial report may be so far behind that the information is old.  Making it less meaningful and not useful for taking actions on financial decisions.  For example, maybe you're looking to launch a new program, make a large capital purchase, or even watching a funding source that’s been volatile or delayed.  Timely financial data is critical to your fiscal oversight as a board member.

Why do board members tolerate stale financials? 

Human behavior tends towards what the group thinks.  A sense that things have always been that way can cause board members to avoid asking for the change they desire.  Other reasons can include a concern of being perceived as micromanaging the staff or getting involved in the day to day; a sympathetic feeling that the staff already work hard, and you don’t want to put another burden on them. 

What to do.

Having timely financial data is high priority for boards.  Share your request.  Negotiate to reduce the current length of time to obtain financials.  This conversation may help staff to rethink processes or even expose other deadlines/expectations that can be modified to help achieve a speedier month end close.  Watch for my blog next week – I’ll be sharing some ideas with staff to reduce the time it takes to close the month end and get financial completed.