Accounting software for Non Profit is often misunderstood to only include functionality such as: fund accounting or acquittals accounting or grants management. In practice, however, Accounting software for Non Profit should encompass all these functionality and many other capabilities.
Non-profit organisations generally lack the financial flexibility of a commercial enterprise because of the dependence on resource providers, who donate (or grant) money for specific purposes. Due to this very nature, reporting on the stewardship of the donated resources is key to a non profit entity. Therefore, a feature rich and flexible fund accounting module is core in any Accounting Software for Non Profits.
Managing and predicting cash flow is at the heart of any non-profit organisation. Often-large portions of cash flow contributions are from donors who do not expect goods or services in return for the exchange. This presents a level of difficulty for donor contributions to be forecast in a reliable manner. Thus significantly increasing the emphasis on the control of expenditure, through tools such as: budgeting and forecasting. The budget should be a management tool, used by the staff to gauge operational performance. As unforeseen conditions arise, the budget should be tailored to respond to those conditions.
Accounting Software for Non Profits: practical examples of effective implementations, catering to specific needs (information extracted from the Microsoft Dynamics case study repository)
1) St Vincent Catholic Charities (serves children and families of all ages, origins, and backgrounds, in the Lansing, Michigan area): In the aftermath of Hurricane Katrina, government officials asked the organization to aid 130 people evacuated from the United States Gulf Coast. In order to make this happen they needed a system to track costs and invoices to funding agencies.According to Andrea Seyka, Chief Financial Officer at St. Vincent Catholic Charities, ..“We didn’t have a lot of time, but we worked really well with the time we had and made it work.”
For assisting Katrina evacuees, there are multiple funding sources, including donations and Federal Emergency Management Agency (FEMA) funds. Using Project Accounting, the team was able to tailor Microsoft Great Plains for applicability to the Katrina evacuee project by changing names of fields to fit the need. For example, they revised:
- Customer” to “Funding Source
- Contract” to “Household
- Project” to “Household member……”
2) Greenings Australia (the country’s largest not-for-profit environmental organisation): As a not-for-profit organisation that relied heavily on grants and fundraising, Greening Australia lacked the resources to invest in high-end financial management technology. Furthermore, the nine state and territory organizations, including the national office, were incorporated as separate financial entities. This presented a unique set of challenges to Greening Australia’s accounting team. Implementing Microsoft Dynamics GP has allowed Greening Australia to create a consolidated set of accounts across nine offices. This has improved the quality and accuracy of financial data and reduced the workload of the accounts department. The not-for-profit organization now has better tools to track project spending and comply with state and federal government reporting requirements.
As highlighted in the case studies above the two essential requirements of any Accounting Software for Non Profits are robust core functionality and adaptability.