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3 Signs Your Organization Needs a Nonprofit Accounting System
- As nonprofits grow, they may face limited capabilities of low-cost accounting tools.
- It could be time to upgrade when dealing with an unwieldy Chart of Accounts or Class List.
- Nonprofits need to manage revenue and expenses by multiple funds, projects, programs, departments and cost centers, which can be hard with a for-profit system.
- Upgrading can provide a holistic view of finances alongside more secure internal controls.
- Features to look for include industry accounting standards, general budgets and budgets for specific programs and restricted funds.
- Reporting, encumbered funds, purchase order functionality and grant and contract management are also important to consider.
- Effective management of all grants and contracts and internal controls can save nonprofits money.
- Accountability can be increased with native expense management and AP automation.
- A true fund accounting system is almost a necessity for companies past tracking only the ASU 2016-14 net asset classes.
- A majority of nonprofits need to manage revenue and expenses by individual funds, projects, programs, departments and cost centers in order to track restrictions and achieve detailed reporting.
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