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Choosing the Right Budgeting Software Solution for Nonprofits

Finance & AccountingReporting & Dashboards

By: Laura O'Donnell, Writer at TGO Consulting

Nonprofit organizations today are expected to do more with less funding. As the need for services increases, funding tightens – which makes reporting and regulation standards even more complex.

Of course, every business has its challenges, but a nonprofit carries the added weight of a social conscience. Ensuring your time and funds go toward your mission is your first order of business.

Wise Choices Matter

It’s tough sometimes to stay on point with so many factors competing for your attention on a daily basis – but processes are what support the very foundation of your work. One of the most critical decisions you can make is selecting the right budgeting software solution ‘out of the gate.’

Clearly, having to go back and revise your entire financial system of operations after discovering costly gaps isn’t a pleasant experience. Your budget is the basic groundwork of what you are capable of accomplishing, and its management won’t be an insignificant expenditure.

As you explore available software choices, remember that budgeting and forecasting strategies should be based upon hard facts (not hopes). Ultimately, you need a system that makes sense for your organization and for those users who will be contributing the data that will make up your reports.

Key Factors to Consider When Choosing A Solution

What should you expect from your nonprofit budgeting solution? It comes down to putting a process in place that gives your nonprofit what it needs to function and achieve your goals. Listing all the possible features of available software is, of course, not something that’s going to fit into a single blog post (too many choices, too little time).

So, we’ve decided to outline some of the critical elements and features of budgeting and planning software that you should consider:

1. Simplification – Aim for a budgeting software application that keeps things simple (and interesting enough to hold your attention), while capturing the complex data necessary for accurate reporting and regulatory compliance.

2. Visible Details – The importance of digging down to the information prompting your data should not be understated. Ideally your software will allow access to everything from comments to supporting documents, all in one place.

3. Consistent Line Items – Your budget line items need to match up with the chart of accounts in your accounting system, to be certain that you end up with effective comparisons between allowances and actuals. When expenses do not properly correspond to budget descriptions, it can result in overages or erroneously reported balances.

4. Flexible Templates – There’s a good reason your organization has different divisions or departments – it lets your staff focus their talents in specific areas in order to accomplish different but complementary goals. So, if you can customize your templates to the individuals using them, it’s going to provide much more valuable input.

5. Sync-ability – Whether your nonprofit is currently using Excel, Microsoft Dynamics GP, Sage, or another accounting system for its core financials – bringing in a new and separate budgeting tool can get complicated quickly. Luckily, there are solutions which incorporate the same methods you’re used to, and work hand-in-hand with specific databases (to give you the best of both worlds).

6. Real Time Position – Reporting capabilities should allow you to easily access the data and compile information in ‘real time,’ between models. Customized grouping of reports is especially helpful as you gain more experience with anticipating future issues.

7. Analytics – More than just collecting information in an organized way, you want to be able to squeeze every ounce of actionable data from your budgeting solution. Can you tell what is driving your success, and how to refocus your path if variables change?

8. The Big Picture – When you are able to compare different versions of budgets and forecasts (side by side), you can take better advantage of ‘what if’ scenarios. A system with extensive charting functions really helps provide real-time clarity when anticipating necessary changes.

9. Progress Tracking – Being able to track where a user left off, and whether a cycle has been completed, isn’t just good to know - it’s essential information that you need for process and program improvement. Accountability matters and without it your organization’s goals can turn upside down in a fairly short order. Is there transparency to allow for easy collaboration between departments and users?

10. Audit Trails With multiple users (and managers) involved in the nonprofit operation, it’s important to have a trail of when changes are made, and by whom. This feature also facilitates a decrease in back-and-forth communications, giving you more time to analyze the figures.

11. Security Measures Make sure you’re signing up with a company who takes confidentiality very seriously. Ask about macro security measures, data clearing, and whether you have an option to prevent access to certain pieces of information.

Some budgeting software nonprofits can consider are Intuit QuickBooks, Microsoft Dynamics GP, Sage ERP X3, True Sky Budgeting, Planning and Forecasting and Sequence Kinetics Workflow Automation.

When you can combine a budgeting software solution with great user experience, the results can change your organization's entire financial future. Whichever tool you choose, expect your software tool of choice to create custom input templates, allow input data and sharing from across all departments, merge data from all permissioned sources, and provide review and analysis at all stages.

About the Author

Laura O’Donnell writes smart content on behalf of the financial systems specialists at TGO Consulting in Toronto. As an avid writer and learner, she loves to use her skills for engaging others in important topics in creative and effective ways. When she is not working, she loves meeting new people, traveling, and bringing her Pinterest dreams to life. Find her on LinkedIn.