Trends You Need to Know About In Accounting in Nonprofits

Trends in Accounting Software for Nonprofits

For many nonprofit development officers, the EOY push to bring in more donations is always top of mind right now. But, while many non-profit executives should and are focused on bringing in a steady from of donations, an equal amount of time making sure that finances and accounting are in order is vital for all sizes of non-profit organizations too right now. In this article, I share 5 key takeaways I derived from a recent report on accounting trends for nonprofits which I believe you will find interesting and worth a read.

Accounting for Nonprofits 

As much as we all need to “attract” new members and donors, it’s equally the responsibility of nonprofit executives to be good stewards too with the donations they receive. Without question, your  top donors want to ensure their funds are well-used and properly managed. Abila, a software provider focused on non-profits, recently released results from their survey, Finance and Accounting in Nonprofits, which I believe does a good job of shedding some light on information about this topic.

Just to put it into perspective and the frame the study, the findings came from professionals which work at a broad range of organizations that take in between $1 million and $50 million in annual revenue. The sample of data came from 350 finance and accounting staffers at various nonprofits.

Below are my most notable thoughts on the trends in this report.

The Generation Gap in Accounting Practices

One of the study’s focal points was on how financial staffers from different generations viewed their responsibilities. Interestingly, there was not a lot of difference in responses between Millennials, Gen Xers and Baby Boomers. While the different generations may be in different career stages, most of them see similar challenges in their day-to-day work.

When I visit with executives seeking new software tools and technology, I do inquire during my assessments about the demographics of the organization’s constituents. And, suffice it to say there are a diverse set of age ranges with regards to staff in most nonprofits. In many instances, the Millennials seem to have a different opinion than Baby Boomers on what’s important and their expectations on how best to address it with technology. Therefore, these finding for accounting staffers was actually encouraging. Everyone seems to be on the same page!

Doing More with Less 

Non-profits as a whole are moving to have fewer finance staffers, so those that are in these positions have a more varied range of duties and more impact on day-to-day operations. Finance and accounting employees are spending their time running reports and taking care of immediate tasks rather than focusing on strategy and helping to move their organizations forward.

This is not much of a surprise to me. And, coincides with most everyone’s perceptions reading this article, but it made me contemplate how technology will become increasingly important in order to move forward for even the smallest of organizations.

More Integrated Departments

It’s great to have more input into other departments, so that everyone is more aware, but finance staffers are often asked to take on operations, human resources and other tasks that may fit outside the accounting umbrella. This also leads to one of the biggest challenges that the study uncovered: Daily interruptions from other departments. The exception seemed to be with fundraising, as finance professionals reported the least interaction with their cohorts in that department.

After reviewing this bit of information, I could not avoid thinking about the ongoing discussions in the “for profit” world about alignment among various departments. For years, many CRM (Customer Relationship Management Software) providers have touted the need for the right hand knowing what the left hand was doing. And, many cited integration with accounting as a key area of disconnect. These findings support the importance of having integrated data from all departments is as important in the nonprofit world too.

Moving to the Cloud Accounting Software 

Software solutions are more frequently cloud-based, which can be more efficient but also presents challenges in adopting new practices and ensuring security of information. Finance and accounting professionals often have responsibilities in implementing the financial side of this cloud-based software and keeping data secure.

Once again, this isn’t a nonprofit trend rather a movement by all organizations across the board and in all industries. More an more organizations are opting to have their data and their software managed off site and choosing software which is subscription based (rented) rather than owned.

Growing the Organization

Identifying new sources of funding and staying sustainable are key challenges for non-profit finance staffers. Nearly one-third of respondents said they expected growth to stay flat for at least the next three years. Abila’s report cited this understanding of how professional finance and accounting staffers work as being key toward ensuring that funds are dispersed according to the organization’s needs and donors’ wishes. Understanding the challenges they face can show trends both in finance and in the overall management of non-profit organizations which I felt was interesting.

Without a doubt, it’s important to be transparent and good stewards with the donations and contributions which come into a nonprofit. And, it’s apparent that the entire team can benefit from an integrated process & solution which may help everyone keep better tabs on their mutual efforts.

In short, I enjoyed this report and hope this frames the topic with some clarity. What do you think?

For your copy of the full report, please go here.

And, if you would like help identifying ways to increase the productivity of your non-profit organization with technology, contact us.

Until next time, keep SmartThoughts in mind.

Not for Profit CRM Guide for Software Review Process

Is eCommerce important to your NPO?

eCommerce for NPO's is Events, Billing, Donations, and Selling items with inventory. It's important! We can

When you first began working for your nonprofit association business, you probably did not realize how much you would have to handle e Commerce commercial like transactions. After all, nonprofit generally means “no profit,” right?

Well, as you’re learning, that’s not exactly the case.

“Nonprofit” really means that one or more individuals aren’t making a personal profit from your organization. Your nonprofit organization still needs to bring in funds in order to stay afloat and keep its message out there. And, you association nonprofit is being (should be) run like any other online store.

So eCommerce is a part of your life, whether you like it or not. From standard sales order transactions to conference registrations and journal subscriptions, you handle a wide variety of business interactions. However, there are some differences in scope and focus when it comes to nonprofit e Commerce. For example, you probably are not charging, collecting, and paying taxes for the business you transact, which makes your process different from that of the for-profit commercial organizations you do business with, such as the printer who handles your publications, or the hotel that hosts your annual convention.

Fortunately, there are eCommerce software systems that are designed specifically with the nonprofit organization in mind. This is the reason why a commercial CRM or ERP package (out of the box) will not meet your needs unless you have a trusted industry focused partner developer or consulting firm which can aid in the implementation process.

eCommerce Software Systems designed for nonprofit associations take into consideration the critical tracking of donor funds and simply that tax issues are not. To be sure, Important elements that your nonprofit association software should support to successfully transact eCommerce business include:

  • Orders
  • Donations
  • Billing
  • Member and Non Member pricing
  • recurring Drafting of Donations
  • Accounts receivable
  • Subscriptions
  • Event registrations
  • Marketplace or display vendor payments
  • Deferred income processing
  • Continuing education
  • Payments for Abstract Submissions (Call for Papers)
  • Certifications
  • PCI compliance

You will also want to make sure that your eCommerce software will fully synchronize with your member and donor management database so that all your transactions are integrated with your members, clients and donors. If you’re ready to learn more about how SmartThoughts can help with your nonprofit eCommerce, contact us today.

Revolutionary Changes in Drafting ACH Transactions

Ready to revolutionize your drafting? Call us for help.
Looking for ways to improve retention and increase revenue? Any Association Foundation or nonprofit organization that keeps afloat through voluntary contributions knows that regular pledge payments are much more efficient than individual donations solicited through direct mail or email campaigns—but the process of setting up and drafting ACH transactions can be laborious,

There are a number of advantages to using a system designed specifically for association foundations, rather than solely utilizing the cumbersome, “one size doesn’t really fit all” batch file program that most banks offer for recurring ACH transactions.

First, all the donor or customer’s information is linked to the payments themselves, in one system, which allows for easy access of up to date payment information. There is no need to key transactions into your database for each payment, since the historical payment updates happen automatically.

With ACH standards for merchant output files, there will be no opportunities for staff confusion about the appropriate credit for payments made or keying errors in amounts.


Looking for ways to obtain better revenue and increase retention?

Second, customers can have multiple payment accounts, which allows them to both pay for a PAC contribution or regular dues payment and continue their quarterly pledge, without the two processes becoming accidentally connected, confused or conflated. This also allows customers to choose different payment types for each transaction. Furthermore, individual payments can automatically draft against dues and subscription billings, pledge commitments, or conference registrations.

Also, your organization can draft into multiple merchant accounts, which allows you to properly keep donation payments separate from dues and other business type transactions. Perhaps best of all, customers will receive maximum flexibility. They can make payments toward multiple accounts with one transaction and easily view historical payment details.

Are you ready to transform your ACH transaction processes? Contact us today to learn more.