Common Points That Make Nonprofits Change ERP Systems
As any CFO or controller will tell you, no enterprise resource planning (ERP) system is perfect. As a result, a nonprofit will develop different ways to “live with” a financial management and accounting system that really doesn’t meet its needs.
However, after more than 25 years implementing and supporting ERP systems, I have seen the same reasons, time and time again, that drive nonprofits to look for new software.
Here are 8 common pain points that may trigger your nonprofit to look for a new ERP system
1. Limited access to financial and operations information, sometimes requiring the use of a third- party system and/or manual manipulation outside of the ERP system.
2. Chart of Accounts (CoA) unable to completely track grants, projects, and tax filings.
3. A difficult reporting process, particularly for grants and IRS Form 990.
4. Limited functionality hampers the ability to meet the organization’s business needs, resulting in increased process complexity and valuable information residing outside of the ERP.
5. Lengthy and cumbersome closing process due to over reliance on manual steps to generate reports.
6. Overburdened and unhappy staff – in the accounting department and throughout the organization – due to process inefficiencies reflected in the mandatory use of manual processes and ERP system workarounds.
7. Costly implementation and support of not just an inadequate ERP system, but also of numerous third-party systems.
8. Unable to configure the system to each end user, resulting in a loss of control over organizational data and an increase in training for employees to ensure they understand elements of the system not pertinent to their jobs.
One of these items may not make your nonprofit re-evaluate your financial management and accounting system. However, when three or more of the pain points become part of you daily business processes, it may be time to invest in a new ERP system and the long-term financial and operational health of the organization.
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