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Issue link: https://cpapracticeadvisor.epubxp.com/i/309054
NOT-FOR-PROFIT Reviews Software for Managing the Needs of Nonprofts By Mary Girsch-Bock L ike all businesses, non- profits need to track e x p e n s e s , m o n i t o r income, create budgets, and produce financial statements. Also unlike their for-proft counter- parts, nonprofits also need to track programs, membership dues, association fees, donations and grant funds. In 2012, the National Center for Charitable Statistics estimated the number of nonprofts in the U.S. at 2.3 million, with just over1.6 million of those nonprofts registered with the IRS. Unlike their for-proft counter- parts, nonproft revenue is typically i n t h e f o r m o f d o n a t i o n s . Fo r ex ample, in 2012, 72 percent of nonproft revenue was received in the form of individual donations, with just over 16 percent of revenues coming from foundations. Like all businesses, nonprofits need to track ex penses, monitor income, create budgets, and produce financial statements. Unlike their for-proft counterparts, nonprofts also need to track programs, mem- b e r s h i p d u e s , a s s o c i a t i o n f e e s , donations, and grant funds. Depending on the legal classifca- tion of your clients' nonprofts, their sof t ware need s can var y greatly. Annual budget size can also help to determine the best software fit for your clients. For instance, if your client receives the majority of its revenue from individual donations, a product that offers comprehensive donor management capability is a necessity. If funding is grant driven, the availability of grants management module would be prudent, particu- l a r l y i f g o v e r n m e n t g r a n t s a r e common, as comprehensive tracking of these grants is a necessity. Te above statistics alone demon- strate the need for comprehensive nonproft sofware that can adequately manage fnances as well as manage donor data. Although it adheres to the standard financial structure found in most s o f t w a r e p r o d u c t s , n o n p r o f i t accounting sofware is very diferent. While processing standard accounting transactions is part of any business or organization, whether a for-proft or nonproft, nonprofts also have to track separate funds, grant dollars, member- ships, programs, and donations. Te nonproft sofware products reviewed in this issue probably difer just as much as the needs of the nonproft. Several are well-suited for smaller nonprofits, offering quick system setup, easy system navigation, and a lower cost. Those suited for larger nonprofts ofer a laundry list of modules and system features, along with a signifcantly higher fnancial investment. There are also several scalable products that ofer the best of both worlds: a smaller, entry level system, as well as a more comprehen- sive version avai lable i f needed . P r i c i n g i s a l s o m o r e f l e x i b l e depending on needs and modules purchased. Scalable products are particularly well suited for nonprofts experiencing a growth spurt. What category your clients belong in and what product works well for their organizations is best determined by you. In this review, we try to make that process a litle easier by looking at several products that difer greatly in scope and functionality. We looked at the following area for each product, hoping to make you and your clients' decisions a litle easier. Basic System Functions – Tis is where we examine the basic program format. Is it a traditional desktop p r o d u c t , S a a S o r C l o u d - b a s e d product, or both? Ease of setup, navigation, and available modules are also examined. Core NFP/Fund Accounting Capabilities – In this area we look at nonproft-specifc features and func- tionality such as the ability to process multiple transaction types, create varying types and levels of budgets, and the availability of grant manage- ment and donor management func- tionality. We also look at basic chart of accounts structure and system customization capabilities. Management Features – In this area we look at various management tools such as the availability of dash- boards, budget forecasting tools, and expense control features. We also look at the ability to track and monitor collections and donor management capabilities. F i n a n c i a l S t a t e m e n t s a n d Reporting – In this area we examine the depth of reporting available. Can u s e r s ea s i l y c u s to m i z e e x i s t i n g reports? Does the system ofer a solid list of standard reports? Can the system product nonprofit specific reports such as the FASB 117? We also look at report export capability. Integration/Import/Export – In this area we examine the ability of the system to import data from other appl icat ions, w hether user s can export data easily from the product, and whether the product fully inte- grates with other available modules and add-on features that are available. Help/Support – In this area we examine the various support options ofered by the sofware vendor; the availability of a solid help system, and what training options are available to new system users. Summary – In this area we provide product pricing as well as a general summary of the product. It's important to remember that many of these products ofer free webinars and demos that allow users to try them out prior to purchasing. And while everyone's needs are different, you' ll likely find a product here that is well suited for your client. ● REVIEW SECTIONS BASIC SYSTEM FUNCTIONS • Installation • General Navigation/Ease-of-Use • Modules • Scalability CORE NFP/FUND ACCOUNTING CAPABILITIES • Account Structure/Types • Multiple Transaction Types • Budget Management/Tracking • Multiple Budget Types • Donor Management/Tracking • Grant Tracking • Automatic Fund Balancing • Multiple Year-End Closings • Audit Trail • E-Features MANAGEMENT FEATURES • Dashboards (snapshots) • What-If Analysis & Budgeting Scenarios • Security Features/User Roles • Spending Control Functions • Collections • Fundraising • Document Management Capabilities FINANCIAL STATEMENTS & REPORTING • Customization Capabilities • Financial Statements • FASB/GASB Reporting • Endowment/Grant Reporting • Reporting Export Options INTEGRATION/IMPORT/EXPORT • Data Transfer/Import • Integration w/Vendor's Other Products • External Program Integration • Remote Accountant Access or Online Accountant Data Transfer Tool HELP/SUPPORT • Built-in Support Features • System Updates • Support Website/Documentation • Training Options • Live Support 6 May 2014 • www.CPAPracticeAdvisor.com Mary Girsch-Bock Mary began her career as an accountant in the property management industry, later moving into the healthcare industry. She is now a feelance writer specializing in business and technology issues and is the author of her frst book, several HR handbooks, training manuals, and other in-house publications. She can be reached at mary.girschbock@cpapracticeadvisor.com . cpa_6-11_NFPReview.indd 6 5/7/14 8:52 AM