3 Signs It's Time for Your Organization to Transition to a Modern Fund Accounting Solution
The past decade has presented the nonprofit industry with several new challenges when it comes to their finances. Along with an increase in donor skepticism, recent accountability standards imposed by the IRS require organizations to provide more detailed information about their operations to the government.
While greater transparency increases donor trust and reduces fraud, its growing importance has put an added burden on agencies to track their funds, donations, and grants more carefully than ever before. And producing required documentation is an even greater challenge if the organization is using accounting software originally created for the for-profit sector.
Are you feeling these pressures?
If you are attempting to get by with your current accounting system to avoid the time and expense required by an upgrade, you are only delaying the inevitable. As your donors become increasingly more sophisticated in their ability to find 990s and balance sheets online, solid and dependable reporting is critical for the long-term success of your nonprofit organization.
3 Telltale Signs It’s Time for Your Organization to Transition to a Fund Accounting Solution
Below are some telltale signs that your organization’s run-of-the mill commercial software isn’t cutting it anymore, and it’s time to switch to a true fund accounting solution.
1.) Auditing is a challenge.
Does your organization have difficulty finding the information it needs for transparency and compliance? If your current software does not allow you to maintain tight audit trails, you could be at risk. You should be able to easily access reports of every transaction that takes place within your accounting system, including details about the action’s sender, receiver, date, and time. Legitimate nonprofit accounting solutions offer history logs to assist with the identification of internal fraud, which both reduces vulnerability and enhances donor trust.
2.) Your reporting capabilities are lacking.
Commercial software packages neglect to offer in-depth reporting features because for-profits don’t need them. However, nonprofits are responsible for more and different types of reporting and require a unique solution to track these complex reports. True fund accounting software enables nonprofits to analyze revenues and expenditures when entering transactions and produce reports that comply with the stringent standards of the Financial and Governmental Accounting Standards Boards (FASB & GASB), as well as private and public granting agencies.
3.) You struggle to perform nonprofit accounting tasks.
If your existing accounting system requires you externally manipulate data to make up for software insufficiencies, you face a greater chance of errors, and your overall documentation may suffer. As a nonprofit organization, you have social and legal responsibilities to accurately track and report on separate sums as these resources move through your programs and funds. Fund accounting software built for the nonprofit sector meets these nuanced tracking responsibilities and handles the separate requirements that may come with each source of funding.
If your organization is experiencing any of the above pain points, consider switching to a true financial management and fund accounting solution, like Serenic Navigator, which is built on the stable and scalable Microsoft Dynamics NAV platform. Designed to meet the unique requirements of your nonprofit, Navigator offers complete system integration that will save you time and money while providing the ease of use to gather accurate data quickly. Learn more.
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