Do you need accounting software for your nonprofit organization? Here are some ways to make the right choice.
When it comes to accounting systems, you need to know that there are two basic categories: commercial (also called business or for profit) and fund (or non profit) accounting software packages. It is true that both types of systems have a common goal, which is to provide you with a complete accounting package and they also have certain features in common. But there is a large difference between for profit and nonprofit accounting software. Software for nonprofit organizations has features that help track funds that are based on certain restrictions or limitations. For example, certain funds could be allocated to a specific relief project that a charity is working on.
Here are some ways to select a good fund accounting system for your organization:
- Check to make sure that it is really a fund accounting system
Some software packages that are sold as fund accounting systems are actually modified versions of commercial programs.
While they may suit the needs of some users, larger organizations would benefit from getting an application that has been designed from the ground up to be a nonprofit accounting system.
- What kind of security is offered by the software?
Security is important in any accounting application, especially so for a nonprofit organization. Take a look at how access to the application is controlled and what security features the software offers you.
- Is the system able to handle accrual basis and cash funds at the same time?
There are various organizations that would need use of this feature. While the general fund might be on a cash basis, a gift shop that is run by a nonprofit group may be on an accrual basis. If you need this functionality, make sure that your accounting software has it.
- Check the reputation of the software vendor
When you select nonprofit accounting software, you should look not only at the software itself, but at the reputation of the vendor. Is it a company that has been in business for a long time? Is their nonprofit accounting product a new creation, or is it a product that they have been selling for a long time that they’ve updated on a regular basis. When you’re choosing a software product that will be crucial to the operations of your organization, you should be certain that you’re not only getting a good software package, but that the company that is behind the product is a solid one as wellNo tags for this post.