Non-Profit Accounting Software

nonprofit businessNon-profit organizations approach money management and financial planning differently from a for-profit business. Your accounting software must include additional functionalities to meet needs like handling unpredictable cash flow, creating reports for board members, and tracking multiple grants and funding sources. Before you buy, consider these key questions.

What Additional Functionalities Does the Software Need?

Your accounting software will need to perform some functions in addition to those offered by mainstream applications. Of course, you’ll need to manage a budget, write checks, generate reports, and manage cash flow, but you’ll also need to provide oversight for multiple funding sources and demonstrate stewardship. Additional functionalities may include:

  • Tracking by Funding Source—Non-profit organizations usually have money coming from several different sources, and you’ll need a way to keep track of those funds accurately.
  • Reporting for Board Members and Funding Sources—Since your organization is accountable to outside entities, you’ll need a way to generate reports that can easily be read and understood by those outside the accounting department.
  • Monitor Different Funding Periods—Grants, contracts, and donations often operate on different timelines. Your software should be able to monitor and report for cash flow sources over different funding periods.
  • Document Fund Stewardship—As you manage cost allocations, your software should ensure that your organization complies with all major OMB circulars.
  • Flexibility—If your organization relies on volunteers or operates on a rotation basis, you need built-in flexibility that makes the program easy to use while remaining reliably accurate.

Should You Purchase an Integrated System or an Add-On Module?

Integrated systems may cost more initially than purchasing a mainstream package with add-on modules. However, over time they can be a better financial decision. When you purchase an add-on to an existing package, you will usually need to pay for set-up and consulting as well. Future upgrades will entail additional costs and additional maintenance fees, and sharing data may not be as straightforward as it would be with an integrated system.

Integrated systems often result in a lower total cost of ownership once all fees and expenses have been accounted for. However, if your organization already has an accounting program in place, it may be more advantageous to purchase the add-on module.

Which Package Offers the Best Value?

As you consider software quotes, make sure each provider lists not only the front-end costs, but also the maintenance and set-up fees and any additional fees that haven’t been built into the quote. Consider the functionalities offered by each package. Your organization may not need every feature available, and you may be able to save some money by purchasing a less comprehensive package. However, don’t skimp on functionalities that you do need in order to save money.

Building a successful non-profit takes dedicated effort and commitment. As you grow your organization, the right accounting software can deliver the financial management and oversight assistance you need to reach your goals. The software selector tool on can help you compare packages and providers and match you with the product that will best serve your efforts.