The emergence of B2B payments technologies, like virtual cards and accounting automation, can surely benefit any organization. But nonprofits, burdened by higher compliance requirements than many other businesses, could stand to gain the most from the most cutting-edge innovations.
“The risk exposure varies greatly,” the firm’s senior manager of fund accounting strategy, Dan Murphy, explained. “It varies around where revenue is coming from, the requirements attached to that revenue and the scale of operations. Plus, there are the types, like payroll functions, that nonprofits are having to comply with, just like for-profits, in addition to the other complexities they’re having to deal with specific to nonprofits.”
The year ahead will certainly be a time of regulatory change. President-Elect Trump will take office as Congress shifts to more unified Republican control, leaving some analysts and companies — especially SMEs — optimistic that regulatory changes will see progress. Nonprofit companies, Abila said, need to be particularly attuned to these shifts.
“With the increase in complexity around processes and regulation changes, many nonprofits will turn to technology to increase efficiency and automate more high-volume, repetitive tasks,” the company recently told PYMNTS in its predictions for 2017.
One regulation in particular demonstrates Murphy’s earlier reflections on the challenges nonprofits face to not only comply with rules for all corporates but to also juggle nonprofit-specific regulations as well.
FLSA overtime regulations, Abila told PYMNTS, is of particular interest to nonprofits. Last month, a federal judge in Texas halted the Department of Labor’s revised federal overtime rules, a move that aims to double the salary threshold under the Fair Labor Standard Act (FLSA) that exempts employees from overtime pay.
The rule was slated to take effect Dec. 1, but the federal judge’s preliminary injunction has delayed that implementation.
Abila told PYMNTS that 2017 will be big for nonprofits awaiting the fate of that legislation.
“In 2017, we will see the fate of the new FLSA overtime rule and the impact the updated reporting requirements for net asset clarifications and the additional disclosure information that will be needed,” the company said. Once these aspects of the new rules are sorted out and come into law, nonprofits will be turning towards technology to ensure that they remain compliant with FLSA requirements, as well as with requirements from other legislative changes surely ahead.
“We expect to continue to see greater interest in cloud-based accounting solutions and paperless documentation as grantors and stakeholders expect more transparency,” Abila said.