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How to Make the Most of Nonprofit Accounting Software

Most nonprofits are small or midsize operations. And like their counterparts in the business world, they often struggle to maintain an efficient back office due to lack of resources — especially if they are growing fast. For 501(c)(3) nonprofit leaders, back-office pressures can be even more intense due to the added responsibility of maintaining tax-exempt status.

Nonprofit accounting software can help to ease the burden on back-office staff for these organizations. However, many nonprofits choose to put off this type of investment because they think they're too small of an operation or can't afford the technology, says Jim Arnott, a senior executive at Blackbaud Inc., a supplier of software and services designed for nonprofits.

However, according to Arnott, Software-as-a-Service (SaaS) licensing and delivery models make it easier and more cost-effective for nonprofits to access tech tools that can help them better manage their back-office responsibilities and move away from time-consuming and error-prone manual processes.

“Using these tools also gives them [nonprofits] more time to focus on their mission, which is what's most important," he says.

Regardless of the potential benefits, making the leap from manual to automated processes can be daunting even for tech-savvy back-office teams. Here are a few tips to ensure you get the most value from your nonprofit accounting software.

Take Advantage of Training

“Training is the most critical part of implementing a new system, but it's often overlooked or cut to keep costs down," Arnott explains. He says cross-training is also valuable because it helps ensure that the nonprofit can still operate smoothly when back-office staff leave or are unable to work for an extended period.

Be Flexible

Different systems function in different ways, and what worked in the old system may not be a perfect fit for the new system, Arnott cautions. “Seek to understand how the new system will affect your operations, and listen to your implementation resources," he says. “Their job is to configure the software to match the customer's business needs until they can't. Then, they configure the customer's business needs to match the software."

Invest in Everything You Need

Cost-conscious nonprofits naturally want to make certain that they're spending wisely when choosing a software solution. However, not taking a long-term view when selecting features could prove costly later, according to Arnott. “Configuring a system is much easier than trying to reconfigure one," he explains. “Know what you can add in the future, like user licenses, and know what should be done up front, like adding a particular module."

Stay up to Date

Software, like all technology, evolves over time. "New features are added, bugs are squashed and the interface may get an overhaul," Arnott says. He adds that working with a cloud vendor can be beneficial for nonprofits of all sizes, especially those with a lean IT team, because updates happen automatically.

Even though operational staff behind a small or midsize nonprofit are usually well-versed at solving challenges on their own, Arnott says, “DIY" is not the way to go when implementing nonprofit accounting software. “Going it alone may seem like a good idea at the time, but in the long run hiring a professional is always the best choice," he explains.

In addition, Arnott advises nonprofit management to include all back-office staff in the vendor selection and software implementation processes.

“You may think you know everything about how the accounting department runs, but your staff will be using the software every day and they know how they like things to work," he says. “If you don't involve them, you may end up with unhappy staff. Manage change by providing necessary training and giving your people a voice in the process."
    
See how PEX automatically controls budgets, tracks spending and time-consuming reconciliations.  

Jane Irene Kelly, who has two decades of professional writing, editing and reporting experience, writes about business and technology. Jane is a graduate of Syracuse University’s S.I. Newhouse School of Public Communications and resides in Pennsylvania.

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