Nonprofit organizations must maintain a high reputation. Donors are demanding more transparency and accountability. The survival of a nonprofit organization can be threatened by any breach of trust. Financial accounting software is a useful tool because it allows you to share financial statements and reports accurately.
Traditional accounting software is not able to manage the unique business processes that nonprofits have to follow. A tool that is tailored to nonprofits' business processes is essential. They must also be able modify the tool to meet their specific needs.
Continue reading to learn more about the best ways and practices for choosing the right accounting software.
What is Nonprofit Accounting?
Nonprofit accounting involves the recording and reporting of financial information for nonprofits. Accounting for nonprofits focuses on accountability, not making a profit. To be accountable to donors or contributors, nonprofit organizations must follow a set of rules and procedures.
Why do Nonprofits need accounting software?
Nonprofits should use accounting software to track donations, distribute funds, and provide reports to donors and contributors. They must share all details about how and where the funds were spent and allocated to ensure transparency.
Nonprofits are subject to unique constraints in terms of time, resources and accountability for donations received. Management and oversight can become a tedious chore without the right accounting software.
Why Nonprofits need custom-designed accounting software?
Nonprofit organizations have different needs than their for-profit counterparts. It is often more harmful than beneficial to adapt a general-purpose accounting tool for your non-profit organization.
First, nonprofits keep track of accounts that are held in the form funds and make reports. This is fund accounting. Predetermined guidelines must be followed when managing money in a fund. Nonprofits should also provide income statements and balance sheets reports.
Nonprofits also need to maintain a non-profit budget. They can use this budget as a guide to help them assess their financial health and plan for the future. It is best to periodically review your budget. Regular reviews will ensure that the nonprofit is on track to achieve its goals.
Quickbook Accounting software for nonprofits is the best way to manage budgeting and fund accounting. It can be customized to fit your organization's workflow.
What financial dashboards are the best? Here is a list of helpful dashboards that your non-profit can use.
What to Look for in Nonprofit Accounting Software
A accounting platform for nonprofits must be flexible, customizable, produce reports, show key information at glance, and automate repetitive tasks. These are the top things you should look for in an accounting program for nonprofits:
- It can be customized to meet the specific needs of nonprofit accounting.
- Able to account and manage different business processes, such as grant or endowment management, budgeting for nonprofits, and financial management for nonprofits.
- For increased accountability, create reports that can be shared internally with potential donors and other board members.
- Data-driven information is provided to key stakeholders that are involved in the decision making process.
- Automate different nonprofit workflows to increase staff productivity. For more information, see our guide to automating accounting processes .
The Top Nonprofit Accounting Software: Key Features
Nonprofit accounting software should be simple to install and run. It should also handle cash receipts and grants. The software should be able to generate reports and provide insight-driving information in a single glance using clear, simple-to-use dashboards.
These are the main features that you should be expecting:
It's easy to set up and run
Software that takes up too much of your time is not something you want. Software with Cloud Hosting for financial management for nonprofits should be simple to set up, to train your staff to use, to manage, and to contact customer support in an emergency.
You should be able to manage donors and volunteers with your tool. It should automatically handle fund accounting, without any additional tweaks or workarounds. You won't waste time validating and importing data. It should also seamlessly connect with Salesforce.
Accounting Seed integrates seamlessly with Salesforce Nonprofit Success Pack (NPSP). Accounting Seed provides key features such as fund accounting, volunteer and donor management, audit trails, and fund accounting to help manage nonprofit workflows. The direct connection to Salesforce NPSP allows you to see all of your donors and volunteers from one platform.
Fund Accounting
Fund accounting is used by non-profits to allocate funds to different groups and funds. Fund accounting is essential for organizations to ensure that the money is used only for its intended purpose. Organizations must also keep track of all outlays and donations.
Accounting software for nonprofits must track all donations and any cash payments to keep up with the times.
Accounting Seed tracks account information for specific project-based initiatives to determine where donations are coming and how they are being allocated. Accounting Seed can help you assess whether your organization is achieving its goals.
Cash Receipt Management
Nonprofits need to manage cash receipts. Cash donations must be tracked by your organization and allocated to the appropriate funds. Accounting software should allow you to easily record cash transactions in both the fund ledgers and in the general ledger.
Accounting Seed records all donations to the general leadger. Accounting Seed saves time and energy, and improves the productivity of your accounting team.
Grant Management
Many grant-granting organizations require documentation of how the grants were used. Nonprofits must complete rigorous administrative work in order to be eligible for grants. This could include creating reports, continuous tracking and regular evaluations. Without the right tool, managing all of these administrative tasks can become a nightmare.
Nonprofit accounting software should automatically collect all information required for grant applications and grant management. These repetitive tasks can be completed easily if you have the right accounting software.
Accounting Seed allows you to track grant amounts and organize them in real-time. This will allow you to see where you stand on your journey to meeting your funding goals. Accounting Seed takes the hassle out of grant application management and allows your staff to focus on other important tasks.
Robust Reports and Nonprofit Financial Dashboards
Transparency is key for nonprofits. Trustworthy stewardship is essential for nonprofits, as they rely on donations to continue their operations. Trust is built with key stakeholders by sharing accurate reports on all funds received and their use.
The best nonprofit accounting software allows you to easily set up financial dashboards which allow you to aggregate transactions and activities throughout your entire organization. You should be able to generate different reports for different stakeholders.
Native To Salesforce
Accounting Seed is built into Salesforce, so you can create powerful dashboards and reports right out of the box. The platform can generate multiple reports tailored to nonprofit needs when connected with Salesforce Nonprofit Success Pack (NPSP).
These dashboards and reports can be set up in just a few clicks. Automating your reports can help you increase employee productivity by utilizing Salesforce NPSP accounts.
Accounting Seed: Fully customizable accounting software for non-profits
Accounting Seed is a dedicated accounting tool that can be connected to the Salesforce Nonprofit Success Package (NPSP). It was built from the ground up in order to efficiently manage all workflows that are part of NPSP.
Accounting Seed can be customized to meet the needs of a non-profit organization.
You can switch to the Salesforce Nonprofit Support Pack (NPSP) if you are still using spreadsheets to manage your company's finances. Salesforce offers special pricing and up to 10 licenses for nonprofits.
Accounting seed is an accounting platform that can be configured to meet the needs of nonprofit accounting. Salesforce is the native platform for this tool, which can generate dashboards and data-driven reports in minutes using the data model of NPSP.
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