Nonprofit Accounting Solutions
Overcoming your unique challenges
Regardless of the organization, every CFO faces both common and unique challenges and pressures. It can be a result of thin or part-time staffing (and sometimes merely volunteers). There are always tight budgets, primitive tools (think of dozens of spreadsheets from multiple contributors), and far-flung management teams. The fact is, nonprofit CFOs are under the gun to achieve so much: to automate processes, improve productivity, create greater levels of transparency and visibility, enhance the governance of the organization, and strengthen the team’s decision-making and strategic focus.
Sage Intacct supports all types of nonprofit organizations including the following:
- Faith-based Organizations
- Philanthropic Organizations
- Health & Human Services Organizations
- Membership Organizations
- Educational Nonprofit Organizations
- International Nonprofits and NGOs
Sage Intacct Fund Accounting for Nonprofit Organizations
For so many nonprofit organizations, the daily tasks of accounting and financial management are inextricably driven by a broad array of complexities. Beyond the basics of accounts payable and receivable that everyone needs, fund accounting software must respond to a distinct set of standard documents, including statements of activities, statements of financial position, statements of cash flow, and the Form 990. But revenue management makes nonprofit accounting an especially thorny challenge – particularly in connection with how that revenue is recognized. If your organization collects annual dues or periodic donations at different times of the year, it may be important to decouple cash receipts and disbursements from revenue recognition.
Some nonprofits operate for-profit subsidiaries and others sell items on a break-even basis. But many depend on donated monies, fundraising, and other sources. They might receive grants and directed donations – perhaps dozens (or, at the high end, even hundreds) of separate income streams. And each of those donors rightfully wants to know how their investment in your mission is faring. The result: You need accounting software for nonprofits that can create separate closes for each revenue source along with a regular series of specific reports, each with its own unique requirements, for every funder. Those demands mean the online accounting software for nonprofits must offer an extraordinary level of flexibility.
Internal Controls and Cash Management
Nonprofits must be vigilant stewards of donated monies and carefully monitor what they spend on every initiative and program. Centralized controls only go so far – spreadsheets and single-user “quick accounting” programs aren’t up to that task. When you’re managing accounting for not for profit organizations, it’s essential to have centralized control and distributed responsibility by event, program, donor, and other dimensions – in one system.
Most for-profit corporations create their internal-controls, reporting, and financial monitoring by products, divisions, geographies, and entities. Nonprofits have remarkably similar needs, seeking to manage their monies by grants/donors, programs, geographies, and other dimensions). By decentralizing the planning and control process, nonprofits can achieve a granular level of accuracy. Setting budgets for each event, campaign, program, and funder – and then tracking the actuals – creates tighter controls and helps prevent unexpected outcomes. Do capital budgets matter to nonprofits? Quite often, they do. Although many nonprofits don’t require extensive capital investments in property, plant, or equipment, capital budgeting still plays a role for some organizations.
Funds and Grants: The Lifeblood of a Nonprofit
No two funds or grants are alike, creating extraordinary complexity in nonprofit accounting. From revenue recognition to reporting, the online accounting software for nonprofits must quickly respond to unique needs. Whether it’s a major foundation, an anonymous philanthropist, or major sponsor, nonprofits rely on the generosity of like-minded people who provide the bulk of the organization’s funding and resources.
But, just as CFOs at for-profit companies must respond to owners’ and shareholders’ (and regulators’) demands for transparent information, the nonprofit CFO must likewise deliver customized slices of results and reports that are tailored to each funder’s unique requirements. Nonprofits also have to carefully track general vs. restricted dollars donated for a specific purpose or cause. That can mean viewing actual dollars, percentages, and actuals-to-budget across multiple financial periods.
Reporting and Visibility
Nonprofits face stringent requirements for reporting and transparent operations – and those hurdles are multiplying. The right financial infrastructure can help nonprofits “know and show” what’s happening in every aspect of their operations with superior speed and clarity. In a challenging economy, agencies, social-service organizations, charities, and other nonprofits are under tremendous pressure to acquire, secure, and maintain funding sources to ensure their continued operation.
Transparency is an essential strategy for securing and keeping those donors and sponsors on board. Even internal reporting requires new levels of efficiency. When nonprofit board members – who are often successful executives from different business disciplines – convene to review the organization’s status, they’re increasingly expecting the same caliber of reporting and analysis they see in the for-profit world. Fund accounting software for nonprofit organizations must take this into account.