It's default to set up a nonprofit's financials like you would your own. You schedule the utilities and ensure they are automated on their due date so that you don't risk paying them late. This ensures everything is paid on time and not interrupted. BUT in a nonprofit organization, the amount of money being dealt with and volume of transactions is tenfold, and this type of automated payments can be risky business.   

My Best Tips on How To Approach Online Banking For Nonprofits

Number one, authorizing others to draft from your account is a high risk, and I recommend limiting it to bank loan payments and credit card drafts that pay the credit card in full.

Things can get misconstrued and overlooked when you have too many hands in the pot. It's hard to make sense of multiple payments auto drafting from the bank account.  Tracking down the payment after they have been paid can lead to unapproved expenses and overpayment for items without a documented business/ministry expense purpose. 

Air on the side of caution and, if possible, limit authorizations for bank drafts by 3^rd parties to those two things, bank loans or credit card payments.

Number Two, Be careful with giving your account number and account information to too many third parties. In reality, you want to hope for the best and believe that these companies have suitable systems and environments to protect your information, but that isn't always the case. Hacking is real, and we often see these headlines about companies getting hacked in the news – and your banking information is then in circulation.   

Pro Tip:

If you've got something you want to automate, put it on your nonprofit’s credit card.  Then pay that credit card off each month.  Don’t give access to directly draft your bank account.

Number Three, Keep an eye on ACH payments being authorized as payments from your bank account.  Best practice is to assign one designated person to prepare those transactions/upload the payment requests to the bank.  Give a 2nd person authorization to review and approve those transactions. This adds a layer of protection to your organization and keeps everyone involved accountable.

I know these tips may sound like distrust of people.  But that's not the case. It is crucial to have these types of systems in place to protect everyone touching finances in nonprofit organization – even from an allegation of impropriety.  Also because mistakes happen, and having systems like these in place will help minimize some of those mistakes.  

Check out my other post that is related to this topic.