Category

Accounting Software

Feb 18
0

Budgets Evolve, and That’s Okay

By | Accounting, Accounting Software, Budget, Nonprofit | No Comments
Budgets Evolve, and That’s Okay

It’s a strange but true statement: your budget will never be “right.” You’ll be over budgeted on some items and under-resourced on others. Predicted income will exceed expectations, or there will be a shortfall. Unexpected expenses mount on specific projects.

And all of this is okay. Budgets evolve, and that’s not only okay, it’s also expected. Here’s why budgeting should be viewed more as a business planning activity and less a “once and done” accounting function. Thinking strategically about budgeting and planning and working all year long with your budget as a business tool, will help your organization thrive.

Budgeting as a Business Planning Activity

Many people think of budgets as the purview of the accounting department. The best budgeting process, however, is collaborative. Program managers should work with the accounting team to analyze their budgets. The ensuing discussion around budget items should encourage reflection and analysis about program activities, focusing on those that support the organization’s mission and margin-generating activities.

For example, as you plan the annual budget, you may find that some program activities performed below expectations. Reviewing the data together, accounting and program leaders can decide if continuing the program makes sense or whether it should be changed in some way. Sitting down together to review the budget opens the door to important conversations that can lead to significant improvements. This reflection process is a healthy part of business planning and goes beyond financial planning.

Best Practices for Nonprofit Budgets

Budgets are “living documents.” This means that they grow and change over time. A good budgeting process allows for flexibility. Part of sound budgeting practices is regularly checking budgets and updating them based on the available data.

Here are some best practices for checking and updating nonprofit budgets:

  1. Regular Review: Schedule regular budget reviews with program areas, such as monthly or quarterly reviews, to compare actual income and expenses against the budget. This helps identify any discrepancies and allows for timely adjustments.
  2. Adjust for Changes: Be flexible and ready to amend the budget as needed. Financial positions can change throughout the year, so it’s important to update the budget to reflect new realities.
  3. Track Cash Flow: Monitor cash flow closely to ensure the organization has enough funds to cover expenses. This includes tracking both incoming and outgoing cash.
  4. Use Technology: Utilize budgeting software and tools to streamline the process and improve accuracy. These tools can help automate calculations and provide real-time data.
  5. Document Assumptions: Clearly document the assumptions made during the budgeting process. This helps with understanding the basis of the budget and makes it easier to explain any variances.
  6. Plan for Contingencies: Include contingency plans in the budget to account for unexpected expenses or changes in funding. This ensures the organization is prepared for any financial surprises.
  7. Communicate Regularly: Keep open lines of communication with all stakeholders about the budget status and any changes. Transparency helps build trust and ensures everyone is on the same page.

By following these best practices, nonprofits can maintain a healthy financial position and effectively manage their resources.

As you can see, budgets aren’t once and done. They evolve. Frequent feedback, adjustments, and discussions allow for much-needed planning and flexibility that helps an organization succeed.

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.

Feb 14
0

Using Data and Analytics to Improve CFO Decision-Making

By | Accounting, Accounting Software, Nonprofit | No Comments
Using Data and Analytics to Improve CFO Decision-Making

The CFO’s role is constantly evolving, with an increasing reliance upon data for decision-making. CFOs have always been data-driven, using economic and organizational data to shape their recommendations. However, with the advent of advanced technology, including nonprofit accounting systems, integrated donor and grant management portals, AI enhancements, and other enhancements, CFOs now have many resources at their fingertips for data-driven decision-making. Here are some factors impacting data use for CFOs, as well as various tools and platforms that enable better data use. 

The Continuing Accounting Talent Shortage

We’ve written before about the accounting talent shortage. Fewer people are choosing accounting majors in college, shrinking the available resources pool. With fewer junior-level accountants entering the workforce, there are fewer people rising through the ranks to the CFO chair. Kiplinger calls it the “graying” of the accounting workforce as the more seasoned professionals reach retirement age, with insufficient young recruits to replace them. 

Even though it is becoming harder to fill vacancies in the accounting department, newer technologies are filling some of the gaps. Automation tools built into existing accounting systems can route approvals, invoices, and reminders efficiently, saving a great deal of time. AI enhancements are also able to find information quickly thanks to AI’s inherent ability to parse large quantities of data. And many modern accounting platforms have robust reporting capabilities, which enable the CFO to generate much-needed reports without exporting data and manipulating it in spreadsheets. Although each of these time-savers seems small in comparison to the workload of a CFO, they add up, making it easier to gather data and derive useful information from it. 

Unified Systems for 360-Degree Visibility

Unified or integrated systems are necessary for today’s data-driven nonprofit. Systems that ‘talk’ to one another can share data across platforms to provide users with 360-degree visibility into their data. Consider a nonprofit accounting system that exchanges data with customer and donor relationship management software, grant and funding software, and similar platforms. The reports generated through such systems contain rich, robust data that significantly improves decision-making. 

Of all the tools in the CFO’s arsenal, having data visibility and integrated systems is the key to using data wisely and making data-driven decisions. When systems are integrated, they provide robust reports that CFOs can analyze to make decisions. Instead of generating separate reports from multiple systems and comparing them manually, or extracting data and manipulating it in spreadsheets, the CFO can access data quickly and efficiently. 

Managing Risk Through Data

CFOs must assess risk to the organization’s financial health. But this can be challenging without accurate and timely data. Newer technologies including cloud platforms ensure that system data is accurate and timely. Integrating these systems with other data points, such as economic, demographic, and other forecasts, provide the enhancements that CFOs need to assess risk and develop appropriate what-if scenarios and recommendations. 

Leveraging Technology for Better Decision-Making

As you can see, technology is the key to improving efficiency and clarity with which CFOs can make decisions. Data flowing freely through integrated systems ensures that the CFO has the insight and transparency needed to make data-based decisions. The right systems, adequately integrated, make this possible. 

What if the right systems are lacking? Then, planning, budgeting, and exploring new technologies should be on the organization’s task list for the new year. CFOs must have accurate, timely, and complete data to make decisions crucial for an organization’s success. This is another reason CFOs must be part of the selection committee for new software. Not only are many decisions made with the data captured by the software, but the software itself can help CFOs in their role as analysts, planners, and forecasters. 

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.

Jan 08
0

5 Steps to Choose the Best Fund Accounting Software for Your Nonprofit

By | Accounting, Accounting Software, Nonprofit | No Comments
two people in front of laptop computer, Accounting Software

Fund accounting software helps nonprofits manage their finances better by providing clear financial reports, separating restricted and unrestricted funds, automating compliance processes, and offering real-time information for decision-making. It centralizes information to increase efficiency, links financial activities to specific grants, and ensures resources are used effectively to fulfill the nonprofit’s mission. If you’re looking to add fund accounting software to your organization, these five steps will help you choose the right one for your needs.

Five Steps to Find the Best Fund Accounting Software

As you search for the best fund accounting software for your organization, you may feel overwhelmed by the choices available. These steps will help you organize the software selection process so that you can quickly assess the options and make smart choices about the finalists before reviewing each one individually.

Step One: Gather Your Team

Even though you’re selecting software, the process begins with people, not technology. The first step in selecting fund accounting software is to gather the right people to participate in the selection process.

First, you’ll need a project leader, someone willing to devote the time, energy, and resources to guide the project’s successful completion. This person doesn’t necessarily have to be in IT – someone on your accounting team may be willing to take the lead.

After determining the project leader, you’ll need to gather a team who will work together to find the right accounting software. This team should include at least one department representative who will use the software. End-user participation is vital to the project’s success. The software must meet their needs first and foremost, so get them involved early and often!

Lastly, finding an executive champion or someone from the executive level in your organization who will promote the project among the leadership team is also essential for success. This person may be able to remove roadblocks, approve the budget, or help you navigate internal politics to achieve project success.

Step Two:  Define Requirements

Working with the project team, define the requirements for the accounting software.

Define your requirements by asking these questions:

  • What do we want to achieve with our new system?
  • What information do we need to make better decisions?
  • How many people need to access the system, and what roles will they have? Which processes do we want to automate?
  • What other applications are we using that need integration with the accounting system?

Document the expected improvements with a new fund accounting system, including Return On Investment or ROI and total cost of ownership.

Step Three: Understand Delivery Options

Fund accounting software is available in three delivery options: on-premises, hosted cloud, or native cloud. What does each mean?

  • On-premises or “on-prem” software is purchased upfront and installed on a computer in your office. It is accessed within your network by other users but cannot be accessed remotely. All the information in the system is contained on the premises, hence “on-prem.”
  • Hosted cloud software is owned by your organization but hosted by a data center offsite. It is accessed over the internet.
  • Native cloud accounting software is also called “SaaS” software. It is housed and maintained by the vendor offsite. Your organization accesses it securely through the internet.

As a team, explore what each option may mean for your organization and review the pros and cons of each delivery method.

Step Four: Develop a Requirements List

This is the time to assemble your “wish list” of requirements. Basic nonprofit accounting software should include general ledger capabilities along with account, bank, and credit card reconciliation; financial management; cash flow management; invoicing and payments; reporting; and possibly integration with other systems, such as donor management. Look for software developed explicitly for nonprofits. General business accounting software does not track fund accounting or grant funds and may require significant (and expensive) customization, while fund accounting software is developed with the unique needs of nonprofits in mind.

It’s also important to consider any complex needs your organization may have. For example, an organization with one location has different software needs than one with 10 locations across seven states. Those operating internationally have even more complex needs as accounting requirements vary by country, and languages and currencies also vary. List these factors as part of the requirements.

Step Five: Evaluate Software Vendors

Now, it’s time to evaluate software vendors. To find possible candidates, speak with colleagues from the nonprofit world. Ask for recommendations; many will be happy to share recommendations for vendors with whom they’ve had positive experiences.

Review information about each possible fund accounting software system online, watch demos, and read information about the system. Then, with your requirements in hand, speak with vendors and make appointments for consultations, demos, and discussions.

Here are a few tips to keep in mind when speaking with vendors, software resellers, and consultants:

  • Winnow the larger list of possible vendors into a short list based on your online research.
  • Create a request for a proposal document that contains your organization’s requirements. This can be shared with the shortlisted vendors so that the responses address the same points and provide an apples-to-apples comparison.
  • Some vendors simply sell software. Others install it but do not provide training. Ask what each vendor includes in their package.
  • Assess how well the vendor’s approach fits your organization. Ask who will work with you on the implementation and what support is provided. Ensure you “click” with the person you’ll be working with since you will spend considerable time together on this project.

Need More Help Choosing Fund Accounting Software?

If you are looking for fund accounting software such as Sage Intacct, MIP Fund Accounting, MIP Cloud, and more, we’d love to help you. With over 500 implementations, we bring extensive experience and expertise to the table.

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.

Dec 26
0

Five Considerations to Help You Choose the Best Accounting Software for Your Organization

By | Accounting, Accounting Software, Nonprofit | No Comments
person using financial software on a tablet and laptop

Is your current accounting and financial software platform helping you achieve your goals or hindering progress?

If you’ve decided that it’s time to invest in new nonprofit accounting software, this buyer’s guide is for you. Nonprofit software has changed rapidly over the years. While basic accounting software still contains familiar and essential elements like a general ledger, accounts payable, accounts receivable, and invoicing capabilities, new accounting platforms offer AI-enabled assistance that improves efficiency and automates routine processes. Integration with other platforms can also be easier, depending on the software vendor.

Let’s look at five questions to ask as you begin exploring nonprofit accounting software. With so many platforms available, you’ll want to narrow down the list before reviewing demos and meeting with vendors and consultants. These questions will help you focus on specific requirements for your organization’s needs—the “must haves” for your new accounting system.

Software Delivery Models

Before we dig into the five questions to ask, it’s important to understand the main software delivery models available today. These models include:

  • On-premises software, based on the client/server model, which is installed on a Windows-based computer network in your office.
  • Hosted software, which runs on-premises software in a third-party data center and adds a layer for online delivery.
  • Cloud software, or Software as a Service (SaaS), is developed to run online.

Each model has pros and cons to it. On-premises and hosted software tends to be (on average) more expensive to run over time since it requires dedicated hardware and personnel to monitor and maintain it. It also limits access to personnel located in the same office as the software; remote access isn’t available. Cloud software provides remote access, and updates are typically handled by the software vendor, for example.

Based on your answers to the following questions, you’ll know more about which type of software is right for you.

Five Considerations When Choosing Accounting Software

  1. Does my team need remote access? Cloud software allows remote access. This enables employees to work remotely. The opportunity for remote work may also improve your ability to hire skilled people from a wider geographic area; you aren’t limited to people who can commute to your location. If you offer only location-based services and never need remote access, you can choose any type of software. If remote access is essential to you, cloud platforms are the right way to go.
  2. Does my financial system need to integrate with other platforms? Cloud platforms can be more easily integrated with other platforms through APIs (Application Programming Interfaces). This leads to easier data sharing, better visibility, and enhanced productivity.
  3. Do users need real-time access to data? Real-time access can be more easily achieved through an integrated, cloud-based approach. Allowing users self-service access also improves visibility and helps team members use financial data as part of their decision-making process.
  4. Do we need to improve efficiency? Cloud accounting platforms can enhance your organization’s operational efficiency by streamlining traditional finance processes like consolidations and closings. Additionally, it allows you to automate tasks such as procurement, allocations, grant management, and compliance reporting, freeing up resources for more value-added activities. For nonprofits, the cloud helps avoid the drawbacks of “management by spreadsheet” and the limitations of single-user systems like desktop accounting software.
  5. Have we considered how to scale for growth? If your organization foresees significant changes in headcount, either adding staff or cutting back, cloud licenses tend to be more flexible, allowing you to increase or decrease licenses with ease and limited expense.

Hands-On Experience

Once you’ve thought about the answers to these questions, you’ll know whether you should explore cloud-only accounting software or consider on-premises platforms too.

Exploring demos and videos online is the best way to learn about the various accounting platforms available. Then, it’s time to engage internal stakeholders in the process of requirements gathering and all the steps needed to hone in on the right software. Fortunately, today’s market offers a wealth of choices for nonprofits. The trick is matching the best platform to your organization’s needs. An experienced consultant can help.

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.