As the final stage in the grant process, grant reporting is the culmination of all the time and effort you’ve spent creating a proposal budget and managing the grant awarded to your organization.
While it’s required by most grantmakers, grant reporting isn’t just a legal obligation - it’s an opportunity to cement funder relations.
Not only does a well-executed report demonstrate good stewardship of current grant funds, it also puts grant recipients like you in a more favoured position to obtain future funding.
What types of reports are required for grant reporting?
You’ll likely be required to submit both a financial report and a narrative to your funder. While we won’t be diving into the narrative aspect of grant reporting in this article, here are some key points to keep in mind:
- Any changes made to your original grant agreement should be reflected in your narrative
- The time period, activities, and financial information contained in your narrative should match what’s in your financial report
- You may need to submit both an interim (halfway or a quarter way through your grant) and a final report
Reporting time periods – along with everything you need to report on – will be outlined in your grant agreement.
Who should be involved in the grant reporting process?
Grant reporting is typically a collaborative process between program and finance teams. While finance staff will draft the financial report, program staff should review it and provide feedback to ensure it aligns with the narrative.
If you have a fundraising team, don’t forget to include them in your reporting system – especially where your narrative is concerned. Not only is it likely they’ve been involved with your grant proposal and stewardship, but fundraising staff are also often integral to maintaining funder relations.
How to prepare for your grant reporting
1. Plan ahead for your reports
Lessons learned in our grant financial management article outlined the importance of planning ahead to meet - or beat - reporting due dates.
While rushing to submit a report on time can lead to mistakes and omissions, electing to write a grant report early shows your funder you’re organized and that you take their reporting requirements seriously.
Well before your report deadline hits, make sure:
- All expense amounts are recorded in your accounting software
- Expenses are properly coded to the right grant
- All your numbers are accurate
You should pull an initial report from your accounting software and review your actual spending vs. the amount of the grant before drafting your final report.
Since many funders require an explanation for any variances - such as when you budget $1000 for events, but actually spend $1200 - and writing these explanations may require input from program staff, drafting your report early will give you time to gather the information you need.
It will also provide a buffer to deal with any technical glitches that may arise when submitting your reports through an online portal.
2. Make sure your accounting numbers match your financial report
Keeping your grant financials accurate and up-to-date will make it easier to pull the data you need from your accounting software and enter it on your funder’s report template.
Sometimes the expense categories in your account management software will differ from those on a specific funder’s template (you have a single travel account, for example, but they want travel expenses broken down into airfare, meals and lodging).
- If you prepared your grant budget by mapping your categories to your funder’s requirements, this shouldn’t pose a problem
- If you didn’t do this upfront, you’ll need to do it during the reporting process
Remember: It’s essential that the total expenses on your grant report match the total expenses from your accounting software - even if the categories aren’t identical.
Under many grant agreements, funders reserve the right to audit your expenditures by requesting account information, pay stubs, or receipts. And if they discover you’ve failed to report your expenses accurately, they may ask that grant funds be returned.
Not only can that put your organization in a bad position financially, it can also damage your funder relationship and compromise future plans.
3. Keep documentation to back up your expense claims
There are two important reasons for storing any information, working documents, or accounting reports you use to back up your expense claims in the cloud, and for saving them in a folder with your grant budget, grant agreement and final funder report.
It provides continuity. You can mitigate employee turnover risk by making it easy for new team members to look back at old files and connect the dots.
It helps you stay audit-ready. You can easily provide your funder with a documentation paper trail on request.
While it’s not always convenient to save or retrieve paper copies of receipts and invoices to back up your claims, using an integrated accounting process that includes apps like Receipt Bank lets you store physical transaction documents in the cloud and attach images to the transactions in your accounting software.
The grant application, management, and reporting process can be complicated and time-consuming. Fortunately, Enkel’s bookkeepers and controllers have experience working with nonprofit organizations and technology companies most likely to take advantage of grant funding.
Contact us to find out how we can help you track your grant expenses using cloud-based technology and generate accurate financial reports to stay accountable to your funders.
