Financial Management Software offers many crucial business money management functions such as, budgeting, banking, planning, reports, tax preparation, etc. For profit based businesses today have readily adopted this time and money saving software, but nonprofits are an ‘animal of a different color’. Their needs are vastly different from regular financial management software capabilities on the market today.
Some of these unique needs of nonprofit financial management software include:
- Fund accounting capabilities – Fund accounting emphasizes accountability over profitability. Being able to track how money is being spent in the form of financial statements and reports is mandatory for the nonprofit organization. Many nonprofits are solely funded by grants. This requires detailed tracking and accountability of every dollar spent.
- Fundraiser campaign management functions – Those nonprofit organizations involved in fundraising need financial management software that allows for recording donations, provides receipts, and tracks donors for future fundraising campaigns.
- Complete transparency – Mistrust of nonprofits has been an issue in recent years and this can reduce donations received by donors. Having financial management software that offers financial efficiency will keep your organization from being flagged by watchdog organizations. Donors want to see that most of a nonprofit’s revenue goes towards its program.
The bullet points above show some of the unique needs of a nonprofit financial management software, but there are other functions that would also be useful to your nonprofit organization.
Scalability is a function that takes into consideration the software’s capability to expand along with the organization. Report export options that can handle FASB and GASB reporting is useful for the nonprofit organization.
According to the NCCS (National Center for Charitable Statistics) there are more than 1.5 million nonprofit organizations registered in the United States. While there are not as many financial management software solutions out there to choose from, the number of options can be overwhelming to select the right fit for your company.
Strong financial controls are important for any organization. An integrated approach to all facets of your organization is important to ensure proper accuracy and “One Version” of the truth for success.
If you are looking to assess your needs for a new system and implement financial management software for a nonprofit, contact us to assist in reviewing options best suited for your needs today and long term.