Has 2020 stalled your organization’s plans for a new accounting solution? Despite the many unprecedented challenges of this year, your organization’s goals for achieving financial sustainability and growth are still ever present and how you manage to get there is of top priority.
Considerations for, or resuming your prior evaluations of, a new nonprofit accounting solution is crucial to supporting key next steps for your organization. Now is the time to prioritize your organization’s wants, needs, and requirements – and successfully gain a clearer picture of the financial management solutions that will provide a powerful accounting solution infrastructure for 2021.
Some key considerations as you work to evaluate your upcoming nonprofit accounting system needs:
Size of your organization
The larger your organization, in number of funding sources, programs, or employees, the more the need for a powerful, robust accounting system. If your organization has experienced, or anticipates experiencing, a change in size – from larger to smaller or smaller to larger for any or all of revenue, programs, or staff – the best option is a scalable solution that can fit your organization’s financial management needs past, present and future, no matter which direction it goes.
Complexity of accounting moving forward
On top of the general accounting complexities of an organization and the mission it serves, many nonprofits have experienced one or all of the following scenarios during 2020:
- Lost a funding source completely
- Lost or surpassed expectations for donor revenue
- Lost of surpassed expectations for fundraising revenue
- Gained additional funding with less restrictions
- Gained funding from a new grantor
- Gained funding from another new, previously unknown source
- Experienced loosened restrictions and eliminated requirements on existing grants
- Received loan support through the CARES ACT (i.e. PPP Loan recipients)
Each of these scenarios force a new reality for your finance and accounting team to quickly and swiftly adapt to, including fluctuations to and additions of alternative funding and revenue sources. With so many changes to funding sources and revenue streams, the best accounting systems are those designed specifically to handle complex finances as they flex and scale, including tracking and reporting on multiple funding sources, and their requirements – across programs, departments, functions, and organization-wide.
2020 has given us at least one big gift, the ability to carefully consider your current state and accounting needs, and easily alter or pivot for your anticipated future needs. For example, given the scenarios above:
- Will you want to apply for additional grants or funding?
- Will you add programs that require new functionality or tracking?
- What kind of outcome measures and reporting will be required or needed with new funding sources?
- Will you want to increase fundraising and donor dollars that may have restrictions?
Purchasing an inexpensive, general accounting solution while you finalize your plans for the future will only provide you with a limited system that your organization can, and will, quickly outgrow. A feature-rich, modular system can accommodate your changing or growing needs for accurately managing and tracking revenue and expenses.
How your finance and accounting staff is able to access your accounting system and other key solutions is perhaps more important to consider and understand than ever before. Nonprofits, education-based organizations and schools, and even government organizations, are swiftly looking to migrate to cloud-based accounting systems in order to better allow for secure anytime, anywhere access to managing their day-to-day accounting and financial management needs.