Nonprofit organizations across the country are flourishing. Almost two-thirds of these entities are expanding mission-critical services in response to heightened client and donor demand, while more than 50 percent are increasing staff rosters and enriching compensation packages, according to research from the Nonprofit Finance Fund. However, operational challenges accompany this widespread growth. For instance, an estimated 59 percent of nonprofits are still understaffed despite the recent recruitment upswing, making it difficult for many to meet on-the-ground expectations, per the NFF. At the same time, key internal processes that once required little administrative bandwidth are now becoming unwieldy.
Among the numerous functional areas facing pressure as a consequence of this niche-specific surge, the accounting department is perhaps the most important. While more than three-quarters of nonprofits maintain stable margins, thin as they might be, the vast majority continue to fret over their finances, analysts for the NFF discovered. This makes perfect sense considering the mercurial state of the funding environment. Unfortunately, the recent growth has complicated nonprofit accounting operations, forcing financial stakeholders to reckon with new responsibilities. The reality is, the small, sometimes single-person accounting teams that drive financial operations within modern nonprofits cannot manage more complexity, and with recruitment still a challenge, simply upping manpower is not an option. However, nonprofits are not doomed to lose control of their books. There is a viable solution that can help their accounting departments scale up with ease: accounting software.
These digital tools give nonprofits the power to streamline and in some cases, automate their accounting processes. This makes it possible for such entities to expand their financial workflows without hiring new employees. Of course, many nonprofit leaders might then ask, “But how does this software, which is normally associated with for-profit businesses, fit into my organization?” The answer is surprisingly simple.
Deploying technology for a cause
Today’s nonprofits are attuned to the larger digital environment, analysts for Nonprofit Technology For Good found. The vast majority maintain robust online footprints that stretch across all corners of the web, according to NTFG. A good number also leverage sophisticated backend platforms, including customer-relationship management solutions, to cultivate connections with clients and donors and ensure mission alignment on the ground, the group revealed. However, this sector-wide embrace of enterprise information technology has not translated to nonprofit accounting departments, where staffers still, by and large, depend upon spreadsheets and other antiquated tools that require significant manual manipulation, according to npEngage. That said, this can easily change since many nonprofits already have some IT infrastructure in place, including online transaction channels.
Understanding the benefits
Why should organizations go to the trouble of implementing accounting software? The benefits that accompany implementation are significant.
For one, such solutions boost efficiency by streamlining financial oversight via automated data-mining components that cull information from preconfigured connections. This negates the need for manual data analysis and reduces the likelihood of human error, ultimately saving precious time. Accounting platforms also facilitate real-time reporting, compiling and making available accurate, up-to-the-minute financial statements that decision-makers can use to shape the organization through everyday tweaks or macro-level adjustments. These tools lay the foundation for organizational scalability as well. With access to streamline, web-based accounting solutions, financial stakeholders can easily manage their duties and deliver insights that support growth. Additionally, accounting programs with multi-entity capabilities support the formation of satellite divisions with disparate books. Finally, these innovative products drastically reduce the burden of compliance. Since December 2017, when the Financial Accounting Standards Board released newer, more stringent reporting rules, nonprofits have been forced to navigate a veritable regulatory minefield, according to the National Council of Nonprofits. Online accounting tools make this process easier, lending financial stakeholders the granular recordkeeping features needed to meet the requirements outlined in the renewed FASB regulations, including those pertaining to board restriction, donor restriction and liquidity disclosure.
Selecting the right accounting solution
Nonprofits that ultimately elect to move forward with accounting software implementation have numerous options to choose from. However, one solution sticks out among the rest: the Sage Intacct Nonprofit Board Book. Developed in partnership with GuideStar, this unique platform simplifies and enriches nonprofit accounting processes through an array of pre-developed dashboards that display real-time financial data culled from Sage Intacct. In the end, the product gives nonprofit organizations the ability to easily keep an eye on accounts, monitor operational effectiveness and gather financial insights that can catalyze true transformation.
Are you interested in embracing backend digitization and bolstering your accounting department through the Sage Intacct Nonprofit Board Book? Connect with The TM Group today, to learn more about their Sage Intacct implementation offerings. You might also take some time to read about how one of their nonprofit clients leveraged Sage Intacct to simplify financial reporting practices and plan for the future.