1. Implement AP Software

Use accounts payable or expense management software designed for nonprofits. These solutions help streamline the process by automating tasks like invoice approvals, tracking, and reconciliation. Some examples include:

• Bill.com: Automates invoice processing, approvals, and payments.
• Expensify: Simplifies expense tracking and integrates with accounting systems.
• QuickBooks Online: Popular for nonprofits, with strong AP and reporting features.
• SAPConcur: Comprehensive for expense and travel management, suitable for larger nonprofits.

2. Adopt a Corporate Credit Card System

• Centralize credit card use: Use one or a few corporate cards to consolidate transactions.
• Set clear policies: Define spending limits, approved expense categories, and reporting requirements for staff using the cards.
• Enable alerts and monitoring: Many card providers offer tools to monitor transactions in real-time and flag unusual activity.
• Consider virtual cards: For online transactions, virtual credit cards provide additional control and security.

3. Use Expense Management Tools

Deploy tools to manage and document credit card expenses efficiently:

• Require detailed receipts and descriptions for each transaction.
• Use Expense Management apps/software, often included in A/P software solutions such as those listed in #1, to scan, upload, and categorize receipts, which can integrate with accounting software.

4. Streamline Approval Processes

• Establish a clear workflow for expense approvals. Tools like A/P and Expense Management Software can help automate multi-level approvals to ensure compliance.
• Encourage timely submission of receipts and expense reports by providing easy-to-use systems or mobile apps.

5. Automate Reconciliation

• Leverage accounting software that integrates with your credit card provider to automatically pull in transactions for reconciliation.

6. Ensure Proper Controls and Auditing

• Perform monthly reconciliations of credit card statements with your accounting system to prevent errors or fraud.
• Schedule periodic internal or external audits of accounts payable processes.
• Maintain a segregation of duties to prevent unauthorized transactions (e.g., separate card issuance, expense approval, and payment processing roles).

7. Train Staff on Policies

Educate employees on:

• Proper use of credit cards.
• Submission of receipts and supporting documents.
• Organizational policies for handling expenses.

8. Consider Outsourcing

For smaller nonprofits without dedicated AP staff, outsourcing to a bookkeeping or AP service provider can save time and ensure compliance.

9. Leverage Credit Card Rewards

If allowable, use a credit card that offers cash back, travel points, or other benefits. Redirect those rewards toward operational costs or other nonprofit initiatives.

10. Track Expenses by Fund/Project

Use systems that allow categorization of expenses by fund, project, or grant to simplify reporting and compliance with donor restrictions.

By combining these practices with robust software and clear policies, your nonprofit can maintain accurate, efficient, and transparent AP processes.