The grant application process is over, and your grant is now approved. Therefore, it is time for your organization to get to work and manage its newly funded project and funds supporting it. The financial management of federal grants is a vital part of the grant process. The accurate reporting assures the funder of the accountability of the money. And what your organization is accomplishing as a result of receiving the grant money. Here are 6 best practices to improve your grant financial management.
1. Ensure the team is on the same page
Once you win the grant money, the first thing is to ensure the team is on the same page. Have a meeting and bring everyone on board in the project. Plus, allow everyone to see and review together with the grant budget. In this way, everyone on the team is clear about the budget and how to use the money. Once everyone on the team is on board, your journey for grant management starts here, and it gets better with team members flowing together.
2. Review requirements and reporting dates
Some grants require a final report. Thus, find out the various reporting deadlines before time to plan accordingly. Plan, review, and ensure your team is up to date with the reporting requirements and submission dates. Also, inform your bookkeeper, whether in-house or outsourced, on the dates to help you with preparing the reports. Notably, allow adequate time to prepare a reliable and accurate grant report. The best option is integrating software for financial planning tools with Microsoft Power BI. The integration enhances the business intelligence and reporting features built into Power BI, incorporating the most current financial information. Both tools work together without significant changes or programming skills to obtain the financial statements you require. It is recommended to take Power BI Course before you integrate the Power BI tool.
3. Track grant expenses
How do you plan to track your grant expenses? Using accounting software is better than using spreadsheets. Spreadsheets create the risk of leaving vital data as you check manually. And the formulas on spreadsheets sometimes can become invalid or messed up, especially with multiple users involved. So, it is best to use accounting software to make it easy to track the expenses for you to automate your data input. Plus, you reduce any chance of human error, and you have more time to prepare reports, analyze data output and ensure numbers are reliable and accurate.
4. Set up your accounting system
For proper grant management, set up your accounting system. To manage your grant reports, you need to map your organization’s chart of accounts to your budget to make it easy to manage the finances. So, make it easy, upload your grant budget to your accounting software and tag it into your new project. Use accounting software to customize it and track the finances through the project management feature. In this way, you can track expenses and revenue of the grant money, and you can see the difference in budget variance reports of the actual grant income and spending versus the budgeted amount.
5. Code the grant expenses correctly
Before using your funds, train your staff to code the grant expenses. The lack of coding costs to respective areas of use makes them miss in the records of specific reports. Thus, it will affect the final report and confuse everything on the budget. So, code expenses correctly to prevent inaccurate reporting. And to help you understand how the grant money is being used. Therefore, choose from the many apps available today to track expenses. Also, consider the one that helps to spot any errors the staff members make.
6. Monitor donor to donor
In a case of funding from multiple donors, encourage your team to check the expenditure allocated to each individual donor. To ensure proper management of the finances, make sure you do not overspend or underspend for each donor. Therefore, ensure you track the total expenditure for each. Also, separate them as you do the reports. Most importantly, if a budget exceeds the cost of specific items. In that, it costs more because of unforeseen changes. Notify the donor immediately, especially for large purchases. Donors do not like surprises while spending the grant money.
To sum up, using the tips above will help with more effective grant management. It will improve your reporting, improve your partnership with the funder, and you make it easier to renew your grant or receive new grant offers in the future.