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.

Dec 19
0

The Three Cornerstones of Financial Planning and Analysis

By | Accounting, Nonprofit | No Comments
Person giving presentation of financial software on large monitor with observers at table

Financial planning and analysis (FP & A), like many finance disciplines, has undergone significant changes with the increasing use of AI and various software platforms to support data analysis and communications. As CFOs continue to lead FP&A activities, along with their teams dedicated to research, analysis, and planning, understanding the importance of the FP&A role and including the “three cornerstones” of FP&A strategy into the process is an important step to maximize its role in overall financial planning.

Financial Planning and Analysis – an Important Strategic Opportunity

The FP&A process offers CFOs an excellent opportunity to work with cross-functional teams within an organization, using financial data to analyze past performance of activities and programs and to incorporate such data into strategic planning.

The data analyzed throughout the FP&A process can be used in multiple ways. For example, when examining the data, trends may appear that lead to exploring new opportunities. Because FP&A planning includes data from multiple touchpoints throughout the organization, such as operations, marketing, donor relations, and more, it can help leaders see the big picture and refine their plans based on data.

The data accessed through the FP&A process should be both collaborative and actionable. Thankfully, with modern AI-enabled platforms, most finance teams achieve both goals with their data.

The Three Cornerstones of FP&A

Numerous leaders cited in an online CFO article shared their vision for the “three pillars” of smart FP&A planning. We like to call them “cornerstones” because they serve as the foundation of good financial planning. The cornerstones include:

  1. Technology-enabled planning: Using the right software, incorporating AI/GenAI for data analysis, and ensuring plentiful cross-functional data are all part of technology-enabled financial planning and analysis. With these tools, teams can perform advanced analysis without it becoming a time-consuming activity.
  2. People power: After using software platforms to perform data analysis, people should take time to review them and use the information accordingly. It’s the human touch—the inherent creativity, knowledge, and awareness that people bring to the financial planning process—as well as cross-functional teamwork that makes it work best.
  3. Leadership: The last cornerstone is leadership. CFOs can take the technology-created inputs and human-generated insights and form them into actionable information for discussion. Then, based on the data analysis and team-driven insights, CFOs need to lead the discussion around the strategic plan. This empathetic, collaborative approach helps all departments get the most from the process.

Working with Data, Leading with Empathy

Financial planning begins with data. But data is just the beginning. Teamwork, planning, sharing, and collaborating on the final plans based on the data is the next step. For CFOs committed to excellence, leading the discussion that ensues with empathy and patience helps the organization benefit most from FP&A activities.

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 17
0

Transforming Finance Teams with AI

By | Accounting, Nonprofit | No Comments
Finance Team meeting with software on computer monitor

AI use is now firmly entrenched in finance teams. In a recent KPMG report, 70% of companies surveyed indicated they currently use AI in reporting, and 100% expect to incorporate it shortly. This is a far cry from a few short years ago when many companies struggled to understand how AI might be used in finance and accounting. Now, it is ubiquitous in business, with most common accounting platforms incorporating some form of AI into their basic package.

However, some organizations also leverage stand-alone AI platforms. Using these platforms comes with certain risks you should be aware of and plan for accordingly. Ensuring that your team uses AI responsibly is a big but necessary task. It’s likely that your team is using it now, and it is important to put safeguards in place to ensure ethical, responsible, and compliant use.

The Biggest Benefit of AI in Financial Reporting

One of the interesting findings from the aforementioned KPMG report is where AI can make the greatest impact. According to Edward Moran, Managing Director of the Audit Innovation Group at KPMG, AI can fill lower-level talent gaps.

Many companies are finding the workload is increasing while the talent pool of newcomers to the accounting and finance profession is shrinking. New hires may not have the experience to fully understand how to prepare financial reports. AI can fill that talent gap. When used properly by newcomers to the profession, it can be used to prepare first drafts of reports, analyze data, and organize and sort data.

Human Oversight Is Essential With AI

AI is not “set it and forget it.” In other words, you can’t just input a query into an AI model, take the results, and run with them. AI makes mistakes. It “hallucinates” or outputs incorrect or garbled data, especially when outlier questions hit blind spots in its training data.

Seasoned financial professionals should review AI-generated output for mistakes, hallucinations, and corrections. Even if the information is correct, AI may not present it in the best light. For example, you may need to add data visualizations to help your audience understand financial data and its impact on the organization. Or you may choose to present it differently.

Putting AI Safeguards in Place to Protect Sensitive Data

Another important consideration is implementing “AI guardrails” or safeguards to protect sensitive data—that is, rules to govern its use among employees.

Many common AI tools, such as Microsoft Co-Pilot, ChatGPT, and so on, ingest the information shared in its chat window and add it to the system’s training data repository. While this may not be of concern if you’re using Co-Pilot to write the text of the company’s holiday greetings, it would be of great concern if an employee fed confidential information into the system and inadvertently exposed it to the public.

Creating rules and safeguards for your company to protect sensitive financial data, proprietary marketing and operational data, and other confidential company information is vitally important. Staff training should include acceptable AI use once you have established the guardrails and rules. People may need reminders that anything “fed” to the AI chat can be spit out later by a competitor!

Learn and Embrace New Technology

AI is just the latest technology to enter the financial profession. Somewhere in the past 100 years, calculators replaced pencil figures, and computers replaced hand-created ledgers. As technology changes, finance professionals should learn all they can about it and embrace what makes sense to enhance the efficiency of their teams.

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.