Finding the right nonprofit outsourced accounting firm can transform your nonprofit. Leaving the selection to chance or wishful thinking is foolish. Focusing on the following three things will have a positive impact.

1. Look for Nonprofit Specialization: Providers with experience in nonprofit accounting will understand fund accounting, donor restrictions, and grant compliance better than generalists. If grant funding is a significant part of the revenue, the firm must understand each contract's fiscal requirements and know how to carry those out within the accounting system.

2. Request a Trial Period: Some providers offer short-term trials, allowing nonprofits to assess their capabilities before committing to a long-term contract. Another idea is to ask the provider to include a 30-day exit clause in the engagement letter. Don't be afraid to let the firm go if it is not a good fit.

3. Evaluate Their Reporting Style: Ensure the provider can produce clear, customized reports tailored to your nonprofit's needs, such as program-specific financials or donor transparency reports. Leaders need reports they can understand to manage the organization better and meet the needs of funders and outside auditors.

It is better to determine if the provider is a good fit as soon as possible. The better the preparation for searching and hiring, the more likely you won't have to change to a new firm. A fine-tuned bookkeeping workflow takes time to create. Both parties must be patient with the process and commit to working through the difficult times.