Five Signs Your Nonprofit Is Ready for Fund Accounting Software

There are many basic accounting programs that work great for a period of time. After awhile, data entry can become cumbersome and you may not be able to pull the information you need. These are signs your organization may be ready to move on to more advanced fund accounting software. Here are five signs your nonprofit is ready to move from a basic application to fund accounting software.

You have to pull fund information from several different databases.

Are you tired of inputting information several times and into many different databases? This can become work intensive when you are using a basic accounting software system. Many fund accounting systems allow you to maintain all of your funds in the same database. This still allows you to report on each fund separately, but allows for sharing some setup information such as vendors, customers, and more, without having to set them up in each fund.

Terminology and reports seem inappropriate for your nonprofit.

Nonprofits customarily deal with specific terminology which basic programs do not address, such as fund vs. company, department vs. profit center. Also, reporting in basic systems is intended for general business and does not provide the reporting and budgeting capabilities specific to nonprofits. For instance, the Statement of Revenue and Expenditures is more suited to a nonprofit than an income statement. By providing your software users the tools they can understand and relate to, you can ensure they really understand what they are doing, increasing system performance and accuracy.

Department heads are not getting the information they need.

Are managers requesting department details that are not available, whether for accounting transactions or payroll? Is it difficult to track revenues and expenditures? Basic systems cannot typically handle the detailed information tracking needs provided by fund accounting software. By moving to fund accounting software, you gain the ability to track revenues and expenditures, as well as payroll by department, location and project.

You want a better audit trail.

Are you worried about the possibility of fraudulent measures by personnel within your accounting system? Some of the more basic accounting systems do not offer a solid audit trail, leaving you open to corrupt information. Many fund accounting systems will offer a sound audit trail, where the history of each and every transaction is recorded.

You need more budgeting flexibility.

If you are like most nonprofit organizations, the budget you start with goes through changes. Many people want to view financial statements against the original, or have the choice of comparing it against one or all of the revised budget versions. A good fund accounting system allows you to keep your original budget intact, as well as revised versions, so you can compare to the version of your choice.

Moving from your basic accounting system to a nonprofit fund accounting system can provide more detailed tracking, reduced margin for error, detailed reports for those who need them, and peace of mind, knowing that the information your nonprofit needs is always available when you need it.

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