Nonprofit accounting software helps simplify the complex task of keeping track of cash flow and generating financial statements. Plus, it allows nonprofits to build donor relations and show accountability to their varying funding sources. Integrating the best nonprofit accounting software into your organization’s IT infrastructure will make preparing for audits a breeze, and you will quickly understand your nonprofit’s financial health at a glance. In today’s podcast, Joe Scarano from Araize and Stephen Halasnik from Financing Solutions, a leading provider of business loans for nonprofits, discuss how to pick the best nonprofit accounting software.
What Is Nonprofit Accounting Software?
Accounting is an essential element of running a successful nonprofit organization. Fiscally responsible nonprofits are more likely to receive donations from individuals, foundations, and government agencies. Every nonprofit that craves growth and sustainability should diligently record, report, and analyze its financial activities for optimal performance. One great way to keep accurate financial records within your organization is to put in place accounting software that aligns with its needs.
Essentially, nonprofit accounting software helps simplify the complex task of keeping track of cash flow and generating financial statements. Integrating the best nonprofit accounting software into your organization’s IT infrastructure will make preparing for audits a breeze. And you will quickly understand your nonprofit’s financial health at a glance.
Hence, we have come up with what you need to know about nonprofit accounting software to make the best choice.
Key Benefits of Nonprofit Accounting Software
Accounting app or software offers numerous benefits to nonprofits in managing their financial resources. Below are the many advantages of nonprofit accounting software:
It Engenders Accountability and Transparency
Accounting software helps nonprofits segment their funds, identify what their revenue is designated for, and monitor the restrictions usually attached to certain donations. When you allocate funds appropriately to their various designations, it fosters transparency, accountability, and stewardship. Plus, it prevents nonprofits from making inappropriate expenses.
As a result, nonprofit organizations can keep tabs on their diverse revenue stream and create each fund’s revenue and expense report to ensure clarity.
It Helps You Track Your Revenue And Expenses
Keeping track of your funds and knowing where they go is essential in running a sustainable nonprofit. And nonprofit accounting app helps you track your cash flow and categorize it to understand your finances clearly.
In addition, it also helps you know who’s donating or granting funds to your organization so that you can target better when planning for a fundraising campaign. Plus, it lets you know who your organization is paying expenses such as payroll, rent, and utilities.
It Promotes Efficiency and Enhances Decision Making
Handling your nonprofit’s account on a spreadsheet can be time-consuming, confusing, and error-prone. Nonprofit accounting software helps streamline the daunting task of keeping financial records by nonprofits’ treasurers, and it can quickly aggregate and analyze a pool of financial data without any error.
Additionally, decision-making becomes so fast and optimized as you will have readily available data that you can quickly pull from the system to make informed decisions.
What Are the Best Accounting Softwares for Nonprofits
There are plenty of accounting applications for nonprofits, but choosing the right technology solution for your nonprofit accounting will make a world of difference. Below, we have highlighted the various accounting software you’ll want to consider for your nonprofit.
FastFund Software Fund
If you want a cloud-based solution that provides a single source solution for all financial management needs with nonprofit fund accounting, donor management, and payroll in a single system, FastFund Software Fund might be all you need.
This powerful application helps you manage the various critical task in running a successful nonprofit organization, including grant proposals, fundraising, program management, payroll, fiscal management, and more, making your nonprofit more efficient in fulfilling its mission.
One great thing about this single integrated database and system is that it’s designed by Certified Public Accountants with over 40 years of experience in the nonprofit industry. And it’s equipped with a suite of tools that will help you properly manage your entire back office accounting, grants, and programs.
FastFund Software Fund helps build donor relationships and demonstrate accountability to your myriad funding sources.
Denali Fund Software
This product is designed for small to midsize nonprofits. And it features many functionalities, such as grant management, donation management, event management, and reporting.
Additionally, it has a donor tracking feature that allows users to enter pledges, monitor donations, and maintain visibility into their fundraising efforts.
Denali Fund offers numerous reporting options for cash flow reports, financial activities, and the entire financial position of your nonprofit. Plus, it provides encumbrance transactions, allowing a nonprofit to set aside money for known expenses.
AccuFund Anywhere Online
AccuFund is specifically built for nonprofits and government entities and can serve nonprofits of all sizes. This software incorporates compelling features, including fund accounting, financial management, grant management, payroll, and human resources.
With AccuFund, you can automate and improve efficiency in all essential tasks within your nonprofit.
Aplos is a cloud-based system that focuses 100% on serving nonprofits and church organizations. This software features fund accounting, online donation management, reporting functionalities, fundraising tools, membership management, event management, and custom communication.
Aplos helps nonprofits to manage their fund accounting, report transactions, keep track of cash flow, and effectively manage their finances in one place.
QuickBooks helps you categorize revenue and expenditures by fund or program and create custom reports based on the most relevant data for your nonprofit. This nonprofit accounting software allows you to track budgets by program or fund in real-time.
With QuickBooks, you can track your donor management, grant management, financial reporting, and bank reconciliation, among other things. Some other accounting software for nonprofits includes Tangicloud, Netsuite, Sparkrock, Nonprofit Plus, Money Pod, AccountEdge, and more.
What to Consider When Choosing Accounting Software for Your Nonprofit
If you’re considering getting accounting software for your nonprofits, there are critical factors you must look out for before making a choice. Below are some of the salient variables that will help guide you while shopping for your nonprofit’s accounting software:
- Software type: An important factor you don’t want to neglect when choosing accounting software is the software type. In other words, do you need a desktop or cloud-based software? Cloud nonprofit accounting software is 100% online and accessed through an internet browser. In contrast, you need to install desktop accounting soft on your computer and can only access it from the device.
- Features: Ensure you check the software’s features to know if they align with your nonprofit functionalities and needs.
- Cost: Since nonprofits always operate on a shoestring budget, it’s essential you subscribe to an accounting app that will not dig deep into your pocket. Make a price comparison to know the most cost-effective accounting product to get for your nonprofit.
- Reports: Try to ascertain the reporting it offers and find out how straightforward it is to access, print, and share with your members.
- Accessibility: Find out if the nonprofit accounting software is accessible on the go and easy to use. You need a flexible and responsive app compatible with both PC and mobile.
- Security: Go for accounting software that can secure your organization’s information by finding out the security measures the provider has in place.
Learn About Our Guest
Joseph is the CEO of Araize, a software company whose sole focus is to provide cost-effective, comprehensive software management solutions to nonprofit organizations. Joe has 10 years of experience as a CPA in a public accounting firm specializing in auditing and consulting nonprofits. With 36 years of experience providing software solutions to nonprofits, Joe is dedicated to helping nonprofits be more accountable and more sustainable, so they can better fulfill their mission.
Learn About Stephen Halasnik
Stephen Halasnik is the host of the popular Nonprofit MBA Podcast. The Nonprofit MBA podcast’s purpose is to help nonprofit leaders and their teams. Stephen is the Co-founder and Managing Partner of Financing Solutions, a leading provider of loans for nonprofits in the form of a Line of Credit. Stephen is a best-selling Amazon author and is considered a leading authority on building great, purpose-driven businesses.
Stephen lives in New Jersey, and his top life mission is to raise his two sons, Michael and Maxwell, to be good men