Wednesday, October 4, 2017
Looking for Better Decision Support in 2018? Consider Software Solutions in These 3 Areas
Posted by Scott Schimberg
Nonprofits need realistic numbers on which to base sound operational and strategic decisions, and financial software that is tailored to the industry can help finance teams generate this data quickly and efficiently. Here are three areas where nonprofit-friendly software can facilitate financial processes and deliver the information you need to keep the ship moving in the right direction.
Budgeting and Forecasting
Will your programs finish the year in the black? Or will you be explaining to board members and donors why a key program is draining money from the general fund? Accurate budgets and forecasts allow you to predict and circumvent problems while building trust with your board and other stakeholders.
Financial planning software fit for a nonprofit should include this functionality:
- Rolling forecasts. Look for the ability to conduct frequent forecasting and what-if analysis to improve accuracy and turnaround time in the planning and reporting process.
- Overhead planning. Will you be able to easily report on overhead costs by employee, fund, program and location?
- Fundraising support. The system should support planning for fundraising efforts over multiple channels and help you create plans based on average donor contributions, cost-per-program and more.
- Ease of integration. Look for a cloud-based system that is built to connect with other financial applications, enabling secure data import from your general ledger, enterprise resource planning (ERP) software or other proprietary systems.
Financial Management and Accounting
Growth is a good problem to have—but a problem, nonetheless. Increased fundraising efforts demand more staff and resources to generate that increased income, and diversifying your funding sources adds complexity to financial and accounting processes. As a result, you might suffer from longer financial close processes, a multiplying number of spreadsheets, and excessive manual re-entry of data across disparate systems.
A robust accounting/ERP solution can shave weeks off the reporting cycle, reduce the burden on your financial staff, and provide timely access to data and insights. As you evaluate potential solutions, consider whether they provide:
- Robust fund accounting and reporting. Will you be able to account for and report on sources and uses of funds in accordance with grant agreements, donor expectations and statutory requirements?
- Customizable dashboards. Your financial management software should enable individual dashboards so team members can track the key performance indicators that matter to them.
- Training and implementation support. No software is truly “plug and play.” To get the most out of your financial management and accounting solution, ask what kind of training and implementation support will be available from the solution provider.
Procurement and Accounts Payable
Paper-based procurement and accounts payable is not only labor-intensive, it also lengthens the payables cycle, potentially damaging vendor relationships and your credit. Lack of visibility into purchasing activities also can hamper decisions about what to buy, when and from whom.
A cloud-based accounts payable platform can alleviate these pain points. Look for software that enables:
- Centralized management of a decentralized procurement process. For nonprofits that have chapters in various states, a cloud-based spend management platform can help you manage a decentralized procurement process without losing control of budget compliance.
- End-user functionality. Users at the local level should have the ability to create a new supplier, initiate a requisition, or open a new purchase order without waiting for approval at a national level. At the same time, national headquarters needs the ability to stay informed of these new suppliers and make sure requisitions stay within budget.
- Electronic invoicing. Vendor invoices that are received electronically and processed automatically speed up the revenue cycle and improve vendor relationships.
Spend More Time on Your Mission
The right software solutions enable your finance team to function more efficiently and allow your leadership team to focus on strategic initiatives that achieve your organization’s mission. Contact your Armanino nonprofit accounting team to discuss which solutions are right for your organization, and check out these case studies to learn how other nonprofits have solved their budgeting/forecasting, financial management/accounting and accounts payable/procurement challenges.
Signs that you’ve outgrown your current financial system:
- Excessive use of Excel spreadsheets
- Manual duplication of data into multiple systems
- Need to constantly re-check data for timeliness and accuracy
- Lack of controls and audit capabilities
- Manual consolidation of data from multiple locations or entities
- Longer close periods
- Lack of useful reporting and insight for management