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Planning for the Successful Transition to New Accounting Software

By | Accounting, Accounting Software, Nonprofit | No Comments
person using accounting software on laptop and mobile phone

Perhaps your organization has outgrown spreadsheets or off-the-shelf small business accounting software. Now, it’s time to find government fund accounting or nonprofit fund accounting software. The platform of your dreams has all the bells and whistles you’ve hoped for: great budgeting features, invoicing and automation, and super reports.

As you prepare for the implementation of your new accounting solution, there are several steps you can take to prepare your data and your team for the transition to the new platform. With these steps, you’re more likely to have a successful transition to your brand-new accounting software.

Clean Your Data

The data that’s currently in your system, whether you’re using spreadsheets or a small business accounting program, will move into the new system to get it started. If there are mistakes or errors in your current system, now is the time to correct them.

Cleaning data refers to the process of identifying and correcting errors, inconsistencies, and inaccuracies in a dataset to ensure its accuracy, completeness, and reliability for analysis or other purposes. This process involves several steps, including identifying errors, handling missing data, removing duplicates, and standardizing data. Additional steps may be resolving inconsistencies and developing what is called a “data dictionary” or a standard guide to data inputs.

Consider your donations for the past year, for example. Perhaps you input donor names and addresses into a database, spreadsheet, or your old business accounting program, and now you want to move it into your new accounting database. Checking to make sure there are no duplicates is a smart idea. Duplicates may not be exact matches, so you may need to work with your team to generate lists and manually check them. (For very large data files, there are companies that specialize in data cleanup.) Common places where duplicates creep into files include:

  • Addresses where road, street, or avenue are spelled out—and a second address where it is abbreviated. You’ll need to decide what the standard for your organization will be—the postal abbreviation or spelling out the full word.
  • Names where a first initial is used (J. Smith), fully spelled out (John Smith), or includes a middle initial (John A. Smith). You’ll have to decide which John Smith version to keep.

These are just two examples of some very common areas where duplicate records can occur. Other places to clean up before exporting your data to move it into the new system include reconciling bank accounts and credit cards, updating A/P and A/R, and ensuring other financial information is updated and accurate.

Document Procedures and Workflows

The accounting and finance team should document common processes, procedures, and workflows. This is important because your new accounting platform may include ways to automate steps in the workflow. It is also a good time to dust off any procedures you have already written out and update them if necessary.

Some examples include:

Donation Processing Workflow

  • Receiving donations via various channels (online, mail, in-person).
  • Recording donor information and donation details.
  • Issuing donation receipts or acknowledgments.
  • Allocating donations to specific programs or funds (if applicable).
  • Reconciling donation records with bank deposits.

Program Expense Allocation Workflow

  • Allocating expenses to specific programs or projects.
  • Tracking program-related expenses separately from administrative and fundraising expenses.
  • Ensuring expenses are allocated in accordance with donor restrictions (if any).
  • Reporting on program expenses to stakeholders, including donors and grantors.

Other common nonprofit workflows include grant fund management, compliance reports, and general financial reporting.

By documenting frequently used workflows on paper, you’ll be in a much better position to understand how the same process works in your new accounting platform. Working with your software vendor or consultant, you can set up the workflows, ensure the reports you need are ready, and be better prepared for the new software.

Work with a Skilled Nonprofit Accounting Consultant When Installing New Accounting Software

It’s vital to get your new accounting software set up, and the data moved into it correctly. This is an area where having a skilled and experienced nonprofit accounting software consultant is vital. With the right consultant by your side, the transition to your new platform will be smoother and easier. You’ll be up and running in no time, with the right automations in place for maximum efficiency so you can better manage margin to support your mission.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.

How CFOs Are Utilizing Machine Learning

By | Accounting, Nonprofit | No Comments
CFO using computer, showing AI on monitors

You can’t open a professional journal, website, or news site these days without seeing articles about artificial intelligence (AI). AI, in all its many forms, offers exciting potential to many professions, including accounting. Machine learning is one branch of the overall AI “tree” that continues to expand in many directions, including Generative AI, machine learning, natural language processing, and more. In this article, we’ll help you better understand machine learning and share examples of how CFOs are tapping into the potential of this new technology.

What Is Machine Learning?

Machine learning is a branch of artificial intelligence (AI) that involves the development of algorithms and statistical models that enable computers to progressively improve their performance on a specific task through experience or data. Instead of being explicitly programmed to carry out a certain task, machine learning algorithms learn from patterns in data, allowing them to make predictions or decisions without being explicitly programmed for every scenario. Machine learning techniques are widely used in various fields such as image and speech recognition, natural language processing, medical diagnosis, financial forecasting, and many others.

Machine learning works best when there are predictable, stable patterns and large amounts of data the system can tap into for learning. Consider grammar-checking software. It is a form of machine learning software that ingests copious amounts of data (previous texts and the rules of English grammar) and checks your writing for errors. Does it make mistakes? Yes, since it may not recognize specific elements of style unique to your writing that skirt the rules of English grammar or that the context of a sentence calls for something a bit different than the norm. However, it is a useful bit of machine learning and one that we now take for granted in our word-processing programs.

Machine Learning in Accounting

Many accounting platforms have machine learning built into the system to help accountants and financial professionals do more with their data. A few machine learning examples from the world of finance and accounting include:

  • Forecasting: Machine learning programs can leverage both historic data as well as current market predictions to improve forecasting. Better forecasting offers companies smarter money management, for example, or better inventory management if they can forecast supply and demand with greater accuracy.
  • Fraud Detection: Manually reviewing accounts payable or receivable line by line is a thing of the past with new fraud detection tools. Because machine learning systems are good at pattern recognition, anything outside of an expected pattern can be brought to the user’s attention. These fraud detection features save many hours of tedious journal reviews and allow users to spot patterns with ease.
  • Risk Management: If the system has access to large data sets, it can review past data, identify patterns around known prior risks, and help detect similar risks in the future.
  • Compliance: Machine learning can augment accounting systems and provide notices, reminders, and more on key compliance issues and dates. The resulting reminders can help organizations remain compliant.

Can Machine Learning Take the Place of an Accountant?

Machine learning is, as we said, great at pattern detection. However, what to do once a pattern is detected requires the insights, skills, and experience of a professional accountant. No machine will ever replace a CFO or accountant. Instead, software that uses machine learning can help accountants complete tasks efficiently, improve predictive analytics, and prevent fraud.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.

Expert Tips for Accounting Automation

By | Accounting, Nonprofit | No Comments
person using tablet with accounting software to demonstrate accounting automation

Accounting or finance automation is a term you will see in many places today. Automation does indeed save time and improve efficiency. However, good automation workflows begin with a sound process. Here, we map out the steps to take before you automate your finance processes. If you take the time now to refine your processes before you set up automations, you’ll gain more benefits from automation.

Good Finance Automation Begins with Simple, Effective Processes

Even before discovering which automations are possible in your current finance or accounting software, ask yourself why you want to automate a process. Consider automation when a process:

  • Takes considerable time and effort
  • Reoccurs at regular intervals
  • Follows a logical sequence

Knowing why you want to automate a process starts with such questions. And it’s not just about what you want in your role with the organization—ask what other team members need too. Consider gathering your team and brainstorming ideas around which processes can be automated. Is there one task that takes up a great deal of time for someone? Is it something they must do regularly?

When you have your list of tasks, move on to the next step.

Map the Process on Paper Before Automating Through Software

It is important to map out the process and workflow from start to finish on paper before programming it in your finance system. This ensures that you’ve considered every step and haven’t missed anything. It also gives you time to review the process and make sure it is still accurate and needed. Sometimes, organizations continue to enact processes because “that’s the way it’s always been done.” Forcing yourself to sit down alone or with the team and map it out on paper gives you another opportunity to review the process, make refinements, and reduce the steps, if possible.

List the Processes to Automate in Order of Priority

Next, take the list of processes you’ve created and order them according to priority. Which process, if automated, saves the most time? These should be your priority automations.

Work with the Technology You Have

Now it is time to set up automations. Start with the system that you have. Most finance and accounting systems have at least some form of automation built in. You may need to ask a consultant or find information on the vendor’s website to set up the automations you require.

Do You Need Custom Programming or Replatforming?

What if the current platform you’re using doesn’t offer the automations you need? You have several choices. Exploring custom programming may be a good step if you aren’t ready to replatform or choose new software. While custom programming isn’t cheap, it may be the right solution for your needs if you can quantify the return on investment or ROI.

Some finance platforms offer additional components, upgrades, or add-ons that may provide the tools you need. Work with your technology consultant or software vendor to explore other alternatives. Many companies have invested in automation within their finance or accounting platforms over the past several years, especially as AI has become prevalent. It may be easier for your organization or more cost-effective to upgrade your current platform than to hire someone to build custom code or to switch to a new platform. The last alternative is to move to an entirely different system, also called replatforming. Such a move should not be undertaken lightly. However, if you find that your current accounting and finance software isn’t supporting your organization’s growth or needs, speak with us, and let’s discuss the options.

Automate Processes the Right Way

Automation in your finance and accounting workflow can indeed save a great deal of time and effort. Ensuring that the basic process is sound, identifying the ones that give you the most bang for your buck, and utilizing the software you already have is the right way to proceed with automating financial processes.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.

Navigating GenAI: Essential Considerations for Nonprofit Boards

By | Nonprofit, Technology | No Comments
person using computer keyboard with AI overlay

Nonprofit boards must consider multiple aspects of their organizations, from finance to operations. One new area of consideration is generative AI or GenAI. With the breakthrough technology now taking firm hold in the minds of businesspeople everywhere, Boards need to make decisions now to ensure that the platform is used appropriately and ethically in the nonprofit environment.

Here, we have put together a series of considerations based on a McKinsey document by Frithjof Lund and expanded upon by our own insights. What do you think? Drop us a note or a comment and let us know.

5 GenAI Questions Every Nonprofit Board Should Ask

Depending on what you have read, seen, or experienced with GenAI, you may view it as a valuable addition to your technology stack or a troubling security risk. Both views are valid. GenAI is new, and it does indeed provide some enhancements to various tasks. It is especially good at improving productivity and efficiency. However, it also comes with some risks, especially to secure, private, or confidential information shared with it.

Here are five considerations for your nonprofit board to review and discuss.

  1. Do we have a GenAI policy in place for employees and volunteers?

Given how new GenAI is, the answer is “probably not.” However, it is essential to clarify the organization’s position on when, how, and why GenAI may be used and by whom.

Consider the following as part of your GenAI policy:

  • When do we think it is acceptable to use GenAI, and for what types of projects? For example, is it okay to feed a published piece of content, such as an article, into GenAI and ask it to summarize it? Is it okay for our staff to use GenAI to outline a presentation but not okay to ask it to write an article?
  • How can it be used? Be clear about the circumstances in which you think GenAI is acceptable and when it is not.
  • Clarify what may be shared with common GenAI platforms. Many executives and security experts have expressed concern about the potential of proprietary information leaks from unwary GenAI users. Any information ingested by a GenAI platform becomes part of its memory or part of the data from which it may draw future outputs for anyone using it. Sharing confidential or proprietary information with it could lead to an information leak that puts an organization at risk.
  1. How might GenAI impact our organization?

The board must consider the impact that GenAI can make on all areas of the organization: marketing, finance, operations, and human resources. There are many proven use cases now available for the usage of AI in each of these functional areas of an organization, but it is up to Boards to decide where or how it may be utilized in each.

  1. When should we begin using GenAI?

If you’re not already using it (and some of your employees probably are already), then don’t wait. Create your GenAI policy. After study and discussion, choose an area for a pilot program. For example, consider the accounting software already in use at your organization. Does the software vendor provide an AI-based tool with it? Is it being used effectively? How might it be used to automate existing processes or improve efficiency?

A pilot project with one department is a low-risk way to test the waters. It helps you make inroads and test concepts without a heavy investment and will help you assess the results quickly too.

  1. Who will be responsible for this moving forward?

Another vital question that Boards must address is who in the organization will be responsible for GenAI policies and use moving forward. It may—or may not—be the IT department. A representative group, comprised of members from each department, may be a good way to begin to ensure that the potential of this emerging technology is considered from every possible angle.

  1. How will GenAI impact our industry?

Any new technology is a disruptor, and GenAI has the potential to be a huge disruptor in all industry segments. The question isn’t whether but how it will impact my specific nonprofit and the area in which we work. Consider researching this topic further and bringing it back to the forefront periodically for review by your board and organizational leaders.

Stay Ahead of the Curve

With the field of GenAI changing rapidly, keeping abreast of trends and changes, and incorporating those that can give your organization a competitive edge is vital. Your board can lead the charge, ensuring that this new tool becomes a useful adjunct to your existing software rather than a distraction.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.