Accounting systems are not something you change or replace often. However, as your nonprofit organization grows in size or complexity, you reach a point where manual processes drain your productivity, and you struggle to analyze your growing range of financial and operating data. At this point, you need a modern system.
At a minimum, a modern accounting system for nonprofits should automate and streamline core financial management functions such as Accounts Receivable, Accounts Payable, and Financial Close. But you can hardly fuel your growth and need for accountability and transparency by simply automating the minimum. Nonprofits, in particular, have accounting, tracking and reporting needs that require specialized functionality in their financial management systems. To help select a modern nonprofit accounting system, below is a list of the essential attributes you should look for.
1. Nonprofit/Fund Accounting
Nonprofits typically receive funding from multiple sources. Good stewardship of funds and increased compliance regulations call for transparency and accountability, creating a need for system-wide tracking and visibility across a variety of key segments or groups. These requirements are best met through a nonprofit or fund accounting system that provides complete fund tracking, efficient operational processing, timely reporting and a comprehensive audit trail.
2. Automated, Flexible Financial Processes
A modern general ledger is more than a standard chart of accounts. It lets you manage, analyze, and present your financial information the way you want, without adding complexity to your chart of accounts or using external reporting tools. Your accounting system should adapt to your optimal organizational structure and workflows rather than limit your operational flexibility, or force you to re-implement software or re-write custom code.
3. Financial Insight
A modern accounting system provides in-depth, real-time insight into the organization, allowing you to capitalize on new opportunities or quickly recognize the need for corrective action. You benefit from having a thorough picture of the financial performance of your organization, from high-level summaries down to the underlying transactions.
4. Cloud Architecture
A modern accounting system is cloud-based, so you can lower IT costs, reduce technology risks, and improve productivity. Using the cloud also gives you the flexibility to choose best-in-class solutions that focus on ease of integration with other leading software solutions to meet your needs in each focus area versus using a suite, which makes external integrations difficult.
5. The Right Company
Be sure to work with an organization that is committed to providing you with a world-class accounting system, not just a suite of software and services that you may not need. Your modern accounting system should come from a company that meets the following criteria:
Want to learn more about an accounting software that meets all of the above requirements? Let’s set up a discovery call today!