What To Look For In Non-profit Accounting Software

Most people do not know that there are differences in the accounting processes of a profit making institution compared to a nonprofit organization

. For some, they even thought that the accounting techniques for nonprofits are simpler. The truth is the accounting system for nonprofit organizations are more complex than the usual commercial accounting.

Religious groups are not the only institution considered as a nonprofit organization, although they are the most popular ones. Other examples of nonprofits are college and universities, health care services, civic organizations, voluntary health organizations, libraries, museums and labor unions. There are actually two divisions for nonprofit accounting software, the private sector and the public sector.

The factor classified as the net asset classes is only present in nonprofit accounting software. This is further divided into three classes namely the permanently restricted, restricted and the temporarily restricted. The restrictions are classified often times by the donors so the organization has no say on this matter. Even revenue classification can be further subdivided into two, revenue and that of public support.

It can be seen from the classifications described that non profit fund accounting can be a tedious task if not guided by accounting software. Choosing a software, meanwhile, is another task altogether. The software should meet the needs of the organization for it to fully function. Further research is needed in software selection especially if the one buying it is not knowledgeable in the subject matter.

The first concern when in search for nonprofit fund accounting is the type of the organization needing it. Question such as what are the sources of funds, will it be accumulated from multiple sources, does the organization need multiple entries and cross transactions, should be answered. Every organization that is involved in fund raising events need nonprofit fund accounting software.

Now, before going out to shop for non profit fund accounting software, it is a good idea to check the existing hardware of the organization. The hardware should be able to support the accounting software being purchased. The software should also be compatible to the existing operating system for it to function properly.

by: JohnRichards

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