20 Questions to Ask Before You Buy Non-profit Accounting Software

The decision to purchase a non-profit accounting software solution requires careful consideration and research. After all, your organisation’s financial management system will play a crucial role in your mission. The right accounting software will help you measure and analyse your financial performance, program outcomes, and mission impact and share those results across your organisation and key stakeholders. Conversely, choosing the wrong non-profit accounting software can create cross-departmental inefficiencies and hamper your board’s visibility and decision making.

After working with thousands of non-profit organisations, the Sage Intacct non-profit team understands the issues involved in evaluating and selecting accounting software specific for the needs of non-profits. We’ve assembled a list of the 20 questions you should ask to help you consider some of the main factors for decision-making.

Download the Non-profit Accounting Software Buyer’s Checklist and get a list of the
40 essential features of a modern accounting system.

20 Questions to Help You Decide

Discuss these 20 questions with your team and stakeholders to uncover organisational needs and requirements for a new accounting system:

1. What is the right software delivery model for our organisation?

Non-profit accounting software solutions have three possible delivery models: Native cloud (multi-tenant), on-premises, and hosted (single tenant). With true cloud non-profit accounting software, you do not buy, license, or manage the underlying hardware, software, or networking infrastructure. Upgrades are performed at no cost to you.

2. Does our team need to work outside the office?

If you need to support work-from-home or remote field work, then your organisation will benefit from the “anytime, anywhere” access of cloud solutions.

3. Do we need our accounting software to integrate with other software systems, such as Salesforce.com?

Cloud non-profit accounting software offers APIs and web services to easily integrate with other cloud software. Easy integration lets you leverage key data from donor management, payroll, budgeting, CRM, and other systems without costly custom programming and maintenance from expensive IT resources.

“In many non-profits, there’s a bit of a disconnect between the development team and the finance team because they’re each counting things differently. With Sage Intacct’s seamless connection to Salesforce, that whole conversation and frustration has evaporated. We’re always in sync because both teams work off the same accurate data.”

Alliah Mohamed | Director Accounting & Financial Operations | DonorsChoose

4. Does our organisation struggle with inefficient processes?

The cloud can help you gain organisation-wide operational efficiencies. By streamlining classic finance processes, by automating processes like procurement, allocations, grant management, and compliance reporting, you can free-up resources for value-add activities.

5. Do key stakeholders at our organisation want self-service access to KPIs?

The real-time visibility enabled by cloud systems lets you extend access to dashboards beyond the finance department to executives, employees, auditors, CPAs, and board members.

6. Do we need to scale for growth without growing our IT budget?

With a cloud-based financial system, the vendor provides world-class infrastructure with 24x7x365 operations, continuous backups, disaster recovery, and superior security. Cloud applications are upwardly and downwardly scalable, to accommodate rapid growth or budget changes.

7. Are we trying to accelerate financial processes without expanding our staff?

Cloud systems greatly accelerate processes like accounts payable, consolidations, grant management, and revenue recognition. They also offer extensive automation and integration capabilities to help eliminate manual data entry, paper-based processes, and spreadsheet maintenance.

8. When do we expect to get a return on our investment in accounting software?

High ROI and rapid payback are common with cloud applications. In a recent study by Nucleus Research, cloud-based financial management and accounting implementations were found to deliver 3.2x more ROI than on-premises software.

“Sage Intacct has delivered clear ROI by saving our team members upwards of 70% of their time… As a result, we estimate that our investment in Sage Intacct was paid off in less than 6 months.”

Braam du Plooy | Controller | Atlanta Convention & Visitors Bureau

9. Do we have multiple entities or multiple locations?

Some non-profits account for different locations or programs as separate entities. If you support multiple entities, you need a system capable of multi-entity accounting and global consolidations.

10. Do we conduct transactions in multiple currencies?

If your organisation operates internationally, you probably need an accounting system capable of recording transactions in local currencies and calculating exchange rates for consolidated reporting.

11. Do we need to shorten our reporting cycle?

Many non-profit finance teams spend up to a week or more running reports each month-end, quarter-end and year-end. By improving the ease of reporting and analysis the right system can help you save days and weeks when you close the books.

12. Do we want to simplify our Chart of Accounts?

As non-profits grow, GL codes in their chart of accounts tend to proliferate. Each year can bring hundreds or even thousands of new codes and greater complexity. True cloud accounting can greatly reduce the number of codes by categorising each transaction by donor, program, grant, location and more for a “clean GL.”

13. Do we want to automate reporting to ensure compliance?

Systems that make it easy to create report templates and dashboards make it easier to provide timely reporting for funders, board members and executives. Report templates can ensure compliance with FASB and government requirements, including: Statement of Financial Position, Statement of Activities, and Statement of Functional Expenses.

14. Do we need to be able to manage fund restrictions and grant requirements?

Look for non-profit accounting software that gives instant visibility to restricted funding, program outcomes, and budget-to-actuals.

“One of my favourite things about Sage Intacct is how we can track and report on grants and restricted contributions very easily and instantaneously, up-to-the-minute.”

Robert Ehret | VP of Finance | Boys & Girls Club of Greater Tarrant County

15. How easily can we “slice and dice” information to tailor reporting?

A good non-profit accounting software should provide the means to pull information you need quickly and easily. Operating dimensions, such as location, grant or program, should allow you to quickly get a holistic view of performance and outcome measures.

16. Do we need access to our financial management data from mobile devices?

24/7 visibility from mobile devices helps staff stay in control of budgets and expenses from anywhere.

17. Do we need to automate revenue management?

With automated revenue management, you can decouple your fund invoicing schedule from revenue recognition, helping you manage the most complex schedules.

18. Would it strengthen our financial management to have better control over spending?

Systems with spend management capabilities help you balance cash inflows and outflows to avoid overspending and ensure budgets are followed.

19. Does our finance team receive too many requests for ad-hoc reporting from stakeholders?

Self-service reports and custom dashboards can reduce these types of requests, while delivering real-time updates and drill down capabilities for visibility and insight into the numbers.

20. Does our organisation have good visibility into how financial decisions impact outcomes results that drive mission impact?

A modern cloud accounting system should enable you to create reports and dashboards that automatically combine operating results with financial data.

“With Sage Intacct’s visual reports, dashboards, and trend indicators, we can easily see all our revenue sources and understand the differences between them, so that we allocate resources thoughtfully. Standard reports straight from the system show which programs are making or losing money, which has been very beneficial in planning how we can reach our goals while maintaining healthy financials.”

Chace Holland | Director of Programming & Business Operations | GRAMMY MUSEUM Mississippi

Conclusion

Taking the time to answer the 20 questions above can help define why your organisation is ready for a new accounting system and what benefits you expect to gain. Now, it’s time to research solutions and evaluate how their features fit your organisation. For a complete list of essential features of a good non-profit accounting software, consult our Non-profit Accounting Software Buyer’s Checklist. The checklist includes the 40 must-have features of a modern accounting system formatted for an easy head-to-head comparison of multiple software vendors.

The Akuna Solutions Team