subject: When Does It Make Sense to Move Your Organization to a True Nonprofit Accounting System? [print this page] When Does It Make Sense to Move Your Organization to a True Nonprofit Accounting System?
In the early days, that off-the-shelf accounting software may have served your nonprofit well. Given the cost, it did the basics and when faced with a reporting request that was outside of its capabilities, you were able to create a spreadsheet and manually produce the needed information.
As the years went by, there was a noticeable shift in how you were spending your time; suddenly there are dozens of spreadsheets and the days are consumed with maintaining and updating them. The process is daunting and cumbersome; and worse the nagging feeling that with so much data manipulation, the information is subject to error. With each new grant and variety of restricted funds and terms outlining allowable allocations/spending, the time needed for reporting increases.
Status check: Are you spending more time on report creation than educated decision-making?
In working exclusively with nonprofits, the Capital Business Solutions team has found that the first sign of having outgrown your accounting system is when you are spending more time creating reports than making strategic organizational decisions based on the reports.
Other side effects of manual, cumbersome report creation, is that your staff is stretched thin and an increasing amount of work is being done performed by non accounting staff, outside accountants or auditors. This is detrimental to the organization for a number of reasons including increasing cost and time spent on functions that would easily be automated; inability to get a real time status of expenditures of grants that operate under a "use it or lose it" guidelines; and increasing the risk of not serving your mission to the fullest extent possible.
This is the sober reality of the cost of doing nothing when considering making a change to a true nonprofit accounting system.
Status check: Would you like to enjoy more control, clarity and confidence about your financials?
We've seen first-hand the benefits nonprofit organizations can enjoy by moving to a nonprofit accounting system. Data entry is streamlined, features allow for more accurate identification of restricted and unrestricted funds, allocation of expenses can be automated to adhere to the terms of the grant, grants are easily tracked and reports can be easily generated for either your organization's fiscal year or the grant's fiscal year, and you can monitor expenditures and encumbrances in real time to ensure budget compliance while at the same time allowing your program to take full advantage of the funds.
Ridding yourself of the myriad of spreadsheets, that require re-assembly each month in favor of the system generated reports, will allow you to respond quickly, efficiently and accurately to inquiries from program managers, your board and management team, and grantors.
With reporting requirements under control, you'll be able to counsel the organization in a strategic fashion. When you are not bogged down with report creation, you can assist other management team members with budget analysis and review, "what if" scenarios regarding grant acquisition, and other strategic decisions that serve to move the organization forward.
Our advice is not to wait until the pain of manual reporting becomes crippling. We'd be happy to assist you in an analysis of what gains you, your department and your organization could realize by leveraging the best technology has to offer.
