Most nonprofits start small. Someone has a dream or vision for how they can bring hope or help to their small corner of the globe. Over time, they get the word out and others get on board. Donations flow in, the money gets deposited in the bank, and thank you notes are sent out. As an impact is made, an organization grows out of someone’s home office or garage. Eventually, someone decides that it’s time for the organization to “grow up,” to set up a Board, file for 501(c)(3) status and “do things right.”
It’s usually at this point that someone on the brand-new Board asks about the financial records. Usually—although not always—founders are more interested in getting out their message, and getting on with their mission, than they are in making sure each penny is accounted for. This tends to mean that financial records have not been a priority—not through any intentional negligence, but through having other, higher priorities on which to spend limited time. Whether jotted down in a notebook, random scraps of paper, or in a simple Excel spreadsheet, chances are that the basic information is there, but that it’s not going to stand up to any sort of auditing process.
This is why the use of appropriate fund accounting software is crucial to the growth and success of any fledgling nonprofit. While setting up an accounting system may seem like a daunting task, professionals are available who can help convert those Excel spreadsheets and notebook entries into an accounting system that’s geared specifically for nonprofits. Systems such as this will actually improve organizational productivity, including:
- Knowing how much money you have in each fund at any given time, so you know how much you have to spend
- Making the monthly bank reconciliation process easy and painless
- Generating meaningful and useful reports for the Board
- Automatically producing donor information and even thank you notes, rather than relying on a separate manual process
These are just a few of the reasons why any growing nonprofit should move to professionally-designed nonprofit fund software. To learn more ways fund accounting can help your nonprofit grow, contact us today.
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