A Buyer’s Checklist for Nonprofit Accounting Software
As nonprofit organizations grow, their accounting systems come under greater stress. Traditional manual processes are no longer adequate to keep up with the faster pace and complexity of operations, and organizations cannot take advantage of the many benefits of the latest technologies.
Modern accounting systems automate and streamline core financial functions, including accounts receivable, accounts payable, and financial close. Because nonprofit organizations have their own set of unique needs, they require specialized functionality in their financial management systems. Their financial teams need to ensure that accounting, tracking, and reporting tasks help their organizations operate efficiently and carry out their organization’s missions.
When nonprofit controllers, CFOs, and accounting managers determine that it’s time to adopt a new accounting software, they face the challenge of deciding which one is best-suited for their organization. To make an informed decision, they can focus on five general factors: fund accounting, general ledger, financial insight, cloud architecture, and the right partner. Let’s take a closer look at each of these elements.
Fund accounting
Fund accounting is one of the unique aspects of nonprofit management. To support the organization’s mission, financial teams must ensure proper stewardship of funds. A robust accounting software will provide complete fund tracking, efficient operational processing, timely reporting, and a comprehensive audit trail. It will enable teams to easily handle funds from different sources, promote transparency, maintain accountability, and assure regulatory compliance.
General ledger
A modern general ledger provides functionality well beyond a traditional chart of accounts. It enables financial teams to manage, analyze, and present financial information however they want. When assessing a new accounting software, confirm that it can adapt to your nonprofit’s organizational structure and workflows. It should not limit your flexibility or require you to re-implement software or rewrite code.
Financial insight
One of the primary benefits of adopting a modern accounting system is to offer nonprofit leadership and management greater financial and operational insight. A robust financial software will provide a complete, 360-degree view of your nonprofit’s financial performance, ranging from a detailed view of transactions to high-level summaries. By providing in-depth insights into your organization in real time, it will enable your organization to take timely action on new opportunities and quickly recognize the need to change course.
Cloud architecture
All modern accounting systems are cloud-based, which means that an organization’s data is stored, managed, and processed on a network of off-site servers rather than on onsite servers and personal computers. Cloud-based systems offer many benefits, including lowering IT costs, reducing technology risks, and improving productivity. They are also easy to integrate with other software solutions and provide the flexibility to choose best-in-class solutions.
The right partner
Assessing the functionality and technical specs of prospective accounting software options is essential, but it’s also vital to look beyond the numbers. Working with a nimble, trustworthy partner is equally important. Be sure that the software provider you choose is committed to providing you with a system that is appropriate for your needs, not just a suite of software and services that you may not need. Look for a partner that is experienced working with nonprofits.
A checklist to help you make the right choice
It may seem like a daunting challenge to find accounting software that has the modern features your nonprofit needs and to evaluate vendors. To get a firmer handle on the five factors discussed above, it’s useful to have a checklist to guide your search and selection.
Sage Intacct’s user-friendly Nonprofit Accounting Software Buyer’s Checklist provides the 40 essential features that nonprofits should look for in a modern accounting system. It will help you manage the task of discovering the accounting system that will help you take greater control over your nonprofit’s finances and operations.