Has your not for profit organization considered a transition from its current accounting software to a new, more updated accounting software? Have you thought about the ways in which a software upgrade could be more beneficial to your organization? Transition can be tough, but is often necessary at some point, in order to better prepare for the future and to sustain your organization in order to ensure it moves in a positive direction. As leading technology becomes more affordable, improving your accounting software is likely on your organization’s list of research tasks.

Maybe your organization’s current accounting system is outdated, which leads to cumbersome and inefficient tasks and heavy use of Excel spreadsheets. It’s also possible you’ve outgrown your current accounting software or maybe your organization is simply looking for increased functionality. Depending on the size and complexity of your organization, accounting software needs can vary greatly. Whatever the situation, understanding the fundamentals of searching for, and transitioning to, a new software platform is critical.

In selecting the best accounting software for your organization, there are generally two main objectives. First, a solid accounting software package will automate many tasks, allowing your organization to function more efficiently. Second, an adequately designed accounting software system will provide greater access to your organization’s information. A useful accounting software system should simplify the storage of data, while also providing your organization with the ability to analyze and act on this vital information.

With these objectives in mind, it is now time to carefully consider your organization’s needs.

Formulate a Plan. Consider the present-day size and scope of your organization and compare that to where you wish to be in the next few years. The following factors should be analyzed and the questions posed below will likely vary depending upon the current size and future direction of your organization.

Some Important Factors to Consider:

Ease of use: Regardless of organizational size, a solution that is intuitive for workers will allow them to embrace the change and make for a simpler and faster transition.

Staff: How many current users are there? How many future users do you project?

Revenue: What are your current and future goals with regard to fundraising? Tuition? Membership enrollment? Grants? Programmatic revenue? Does the software application have a built in CRM system? Can it perform billing for your services?

Volume: How many donors do you have in your fundraising database? How many consumers does your organization have? How many funds/grants/programs do you need to track in your chart of accounts?

Growth: Are you launching a new fundraising campaign that will drastically increase donations and corresponding records? Do you wish to track special events? Is your organization pushing to increase membership and/or tuition enrollment in the years ahead? It’s vital to select an accounting software package that will grow as you grow.

Reporting: What type of organizational reporting requirements are there? Consider the requests from your board of directors, auditors, funders, the IRS, and other state regulatory authorities.

Integration with other systems: Many not for profit organizations rely on the use of multiple software systems, which must be periodically reconciled to the accounting software. What kinds of redundancies would be eliminated with an integrated system?

Your answers and considerations to the factors outlined above should prove useful for determining the software that will best meet your organization’s needs. Making a software transition is not a simple process by any means, so don’t be discouraged if some of the answers are tough to determine. Considering technology needs in the broader scope of your organization’s mission is a thought-provoking and often timely process. Accepting that this process is not easy, will better position your organization to perform the required due diligence to select the best possible software solution.

Now that you’ve assessed your organization’s current and future needs and have gone through the rigorous process of formulating a specific accounting software transition plan, it is now time to think about implementing the plan. In order to effectively implement the plan, your organization should consider:

  • Establishing or updating policies to preserve the integrity of your database and to ensure reliability among your records.
  • Determining the specific functionality and compiling a list of expectations to ensure that you’re gaining the most from the new software. Really consider how the new system will work with slightly older systems currently in place that don’t necessarily require an upgrade.
  • Setting a realistic time frame for implementing the new software. Once the system is selected, you will need to allow adequate time for training and converting the old data. The size and complexity of your organization will likely have the greatest impact on the time it takes to transition and fully implement the new software.
  • Sticking to your budget and exploring ways to fund your purchase. In addition to the software cost, your budget should also factor in the costs of new hardware (computers, printers, scanners, etc.), data conversion and training costs, and maintenance and support expenses.

Hopefully the above information will provide your organization with the necessary tools to help begin a successful transition to an updated accounting system. However, it is important to understand that the guidance above merely scratches the surface. Many of the factors discussed will vary greatly depending upon an organization’s current and future operations, size, complexity, and specific industry.

Although making the transition may seem like a daunting task, it is also exciting! Technology moves at a relentless pace and the improved features, new functions, and updated integrations should improve your accounting and finance department by helping to create and achieve more efficient and effective processes. Making the transition won’t be an easy process, but as the great Theodore Roosevelt once said, “Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty…” Here’s to hoping this guide will make things slightly less difficult for you and your organization!

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This article was also featured in the NFP Advisor Vol. 16.

Kenneth R. Cerini, CPA, CFP, FABFA

Kenneth R. Cerini, CPA, CFP, FABFA

Managing Partner

Ken is the Managing Partner of Cerini & Associates, LLP and is the executive responsible for the administration of our not-for-profit and educational provider practice groups. In addition to his extensive audit experience, Ken has been directly involved in providing consulting services for nonprofits and educational facilities of all sizes throughout New York State in such areas as cost reporting, financial analysis, Medicaid compliance, government audit representation, rate maximization, board training, budgeting and forecasting, and more.