Constrained by limited time and resources, nonprofit organizations need customizable accounting software to boost productivity and increase accountability.
Reputation is sacrosanct for nonprofit organizations, with donors increasingly demanding full transparency and accountability. Any violation of trust can jeopardize survival. Yet to share accurate reports and financial statements, limited time and resources make financial accounting software a necessary tool.
However, traditional accounting software can’t manage the unique business processes nonprofits must adhere to. Nonprofits therefore need a tool set up with their specific business processes in mind. Furthermore, they must be able to easily customize that tool to their unique requirements.
Read on for methods and best practices for finding the right accounting software for your nonprofit.
What Is Nonprofit Accounting?
Nonprofit accounting is the process of planning, recording, and reporting on nonprofit finances. The goal of accounting for nonprofits is accountability rather than making a profit. Nonprofit organizations follow a specific set of rules and procedures to stay accountable to donors and contributors.
Why Do Nonprofits Need Accounting Software?
It’s vital for nonprofits to work with accounting software that can track donations, distributions, and expenditures, and deliver reports to donors and contributors. For complete transparency, they must provide reports that share the details of how and where their funds are spent and allocated.
Nonprofits face unique constraints for time, other resources, and accountability for the donations they receive. Without the right accounting software in place, management and oversight become an all-consuming chore.
Why Do Nonprofits Need Customizable Accounting Software?
Nonprofit organizations have very different needs compared to their for-profit counterparts. Refitting a general-purpose accounting software tool for your nonprofit organization will often do more harm than good.
First, nonprofits track and report on accounts held in the form of funds. This is known as fund accounting. The money in a particular fund must be managed according to predetermined guidelines. Nonprofits must also provide individual income statements and balance sheet reports.
Along with fund accounting, nonprofits must maintain a nonprofit budget. This gives them a guide that helps the organization assess its current financial health and predict its future health. The best practice is to review this budget periodically. Regular reviews ensure that the nonprofit stays on target to its goals.
The most efficient way to manage both fund accounting and budgeting is with accounting software for nonprofits that can be adapted to your particular organization’s unique workflows.
Which financial dashboards are best? Here’s a list of various helpful dashboards for your non-profit to consider.
What To Look For In Nonprofit Accounting Software
An accounting platform for nonprofits should be customizable, versatile, generate reports, show key information at a glance, and automate your most repetitive processes. Here are the most important things to look for in a nonprofit accounting program:
- Customizable to meet the unique needs of nonprofit accounting.
- Able to account for different business processes like grant or endowment management, nonprofit budgeting, and nonprofit financial management.
- Generate reports that can be used internally and shared with donors, perspective donors, and board members for increased accountability.
- Provide data-driven information for key stakeholders involved in the decision-making process.
- Automate various nonprofit workflows to improve staff productivity. See our guide to the benefits of automating accounting processes for more info.
Key Features Of The Best Nonprofit Accounting Software
Accounting software for nonprofits should be easy to set up, easy to run, and should handle fund accounting, cash receipts, and grants. It should also generate reports and insight-driving information at a glance through clear, easy-to-use dashboards.
Here are the key features you should expect:
Easy To Set Up and Run
The last thing you need on your plate is a piece of software that eats up more time than it saves. Financial software for nonprofits should be easy to set up, easy to train your team to use, easy to run, and easy to get customer support for in a pinch.
Your tool should also help you manage donors and volunteers, and it should natively handle your fund accounting without the need for workarounds and tweaks. It should also connect seamlessly with Salesforce, so you don’t have to waste precious time importing and validating data.
Accounting Seed is native to Salesforce and connects seamlessly with the Salesforce Nonprofit Success Pack (NPSP). Accounting Seed delivers key features like volunteer and donor management, fund accounting, and audit trails in managing nonprofit workflows. Thanks to the direct connection with Salesforce NPSP, you’ll get a 360-degree view of volunteers and donors, all within the same platform.
Nonprofits use fund accounting to allocate money to various groups and funds. It’s imperative that organizations use this fund money only for its stated purpose, meticulously tracking all donations and outlays.
To keep pace, accounting software for nonprofits has to track donations you receive for each particular fund, and every expenditure of cash or other monies you pay out.
Accounting Seed helps track account details for specific, project-based initiatives, to identify where donations are coming from and how they’re allocated. The platform can also help assess whether the organization’s targets are within reach.
Cash Receipt Management
Cash receipt management is crucial for nonprofits. Your organization needs to track all cash donations received from donors, and allocate it to the designated funds. Your accounting software should make it easy for you to record cash transactions not only in each fund ledger, but also simultaneously in the general ledger.
Accounting Seed automatically records donations to the appropriate funds and programs in the general ledger. This saves valuable time and energy for your accounting team and increases their productivity.
Most organizations that offer grants require evidence of how those grants are used. To become eligible for a grant, nonprofits must perform rigorous administrative work to fulfill the grant’s requirements. This can include generating reports, performing continuous tracking, and conducting regular evaluations. Managing all these administrative tasks without the right tool can be a nightmare.
Your accounting software for nonprofits should automatically collate all the information you need for your grant applications and grant management. Completing these repetitive tasks should be relatively easy when you choose the right accounting software.
Accounting Seed lets you track and organize grant amounts consistently, in real time, to see where you are along the path to reaching target funding goals. It takes the pain out of managing complex details for grant seeking and gives time back to your organization’s staff they can focus on more important tasks.
Robust Reports And Nonprofit Financial Dashboards
For nonprofits, transparency is key. Since nonprofits need donations to operate, faithful stewardship of donated funds is crucial. To build trust with various key stakeholders, it’s vital for the organization to share accurate quarterly, annual, and other reports about all monies received and how they’re used.
The right nonprofit accounting software makes it easy to set up nonprofit financial dashboards that let you aggregate transactions and activities across your entire organization. The software should have the functionality to create different types of reports for different stakeholders on a regular basis.
Native To Salesforce
Accounting Seed is native to Salesforce and therefore it lets you generate powerful reports and dashboards right out of the box. When connected with the Salesforce Nonprofit Success Pack (NPSP), the platform can create multiple report types customized to nonprofit needs.
Setting up these custom reports and dashboards is easy and requires only a few clicks. You can easily increase employee productivity without the need for coding, and automating your reports to show the data you need based on your Salesforce NPSP account.
Accounting Seed: A Fully Customizable Accounting Software For Nonprofits
Accounting Seed is a dedicated accounting software tool fully connected with the Salesforce Nonprofit Success Pack (NPSP). It’s built from the ground up to efficiently manage all the workflows that are a part of NPSP.
You can also customize Accounting Seed to a nonprofit organization’s unique needs.
If you’re still managing your organization’s finances with spreadsheets, consider switching to the Salesforce Nonprofit Success Pack (NPSP). Salesforce provides up to 10 free licenses and special pricing for nonprofits.
Accounting Seed is a fully customizable accounting software platform that you can configure to support the unique aspects of nonprofit accounting. The tool is native to Salesforce, so it can deliver data-driven reports and dashboards within minutes, using the data model for NPSP.
Ready To Unlock The Full Potential Of Your Nonprofit Organization?
If your nonprofit staff is pressed for time and wastes a tremendous amount of effort on spreadsheets and / or antiquated accounting systems, schedule a demo with Accounting Seed today. We’d love to show you how you can leverage fully customizable accounting software for nonprofits that helps you manage your specific workflows.
Nonprofits need customizable accounting software that meets their unique requirements. Here are some the key points to consider:
- You can affordably automate nonprofit accounting processes with customizable accounting software, saving time and energy.
- Nonprofit accounting software can handle specific use cases like fund accounting, grant or endowment management, nonprofit budgeting, and volunteer and donor management.
- Nonprofit accounting applications can generate useful financial dashboards and reports that you can easily share with donors and other stakeholders.
- Accounting Seed is one of the most feature-rich accounting programs for nonprofit financial management on the market. It’s native to Salesforce and customizable to the unique accounting needs of nonprofit organizations.
Read on and check out our accounting blog for more pro tips:
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- Startup Accounting Tips: Scaling a Growing Startup
- Accounting Software for Accountants: What to Look For
- DCAA Compliant Accounting Software: What to Look For
- What are the International Accounting Standards (IAS)?
- Top 8 Reasons Why IT Implementations Fail
- What is Cash Disbursement in Accounting?
- Accrued Expenses: What are They and How to Report Them?
- Intro to Accounts Payable and Purchase Order Accounting
- What is Integrated Accounting Software: Everything to Know
See Accounting Seed in action
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