Is your non-profit in need of a new fund accounting software solution? Growth brings more funds and programs to manage, more reporting, greater need for visibility and often more complexity, including multi-currency, multi-entity, and multi-location accounting. If your fund accounting processes have become inefficient as your organisation has grown, it could be time to consider a more modern system.
This article provides 10 important tips for what to do and what to avoid when your organisation is searching for new fund accounting software.
You don’t want to assemble a project team and invest time in evaluation, only to be told a new solution is not an executive priority this year. Build a business case and present your reasons for needing a new fund accounting system to the executive team and/or the board of directors up front and convince them of the need.
Without careful project management, software evaluations can get drawn out and bogged down. Begin by creating a clear set of goals for the team and a project calendar. Everyone involved needs to understand the project objectives and timeline.
Assemble a team that includes a variety of stakeholders, including accounting and finance team members and non-finance managers who rely on your reporting products. Someone on the team should be strong in technology. You will need to define system requirements and evaluate the usability of each software solution to be evaluated. End users are critical to both of those processes, so include them on the team.
Will your organisation best benefit from a cloud fund accounting solution, a hosted software or an on-premises system? If, like many non-profits, you prefer to leave the hardware and IT responsibilities to the vendor, you will want a cloud application. This is a choice you will want to make up front, because it will be important in terms of accessibility, real-time visibility, and integration, among many other factors. Deciding on your delivery model also narrows the list of solutions you will research and evaluate.
When considering fund accounting software, most non-profit finance leaders think of the benefits of saved time, reduced data entry and reduced clerical errors. But the right system should also deliver real-time visibility and better insights for decision-making. CFOs should think about how a new solution can help the organisation gain productivity, supply insight, focus resources, and scale for growth.
Some non-profit leaders assume they need to buy a software suite from a single vendor in order to enjoy tight integration between different aspects of the organisation, such as accounting, human resources, payroll, and CRM. That’s not true anymore, thanks to the ease of integration offered by cloud applications. Now it is possible to select a best-in-class fund accounting system and have it integrated seamlessly to many other cloud applications. Best-in-class software is purposefully designed to provide more and better functionality for each department. Not only do best-in-class systems offer more features than software suites, but they are also designed to scale up with your organization.
As you move from your research phase into your active software evaluation, it’s time to narrow your candidates to a short list of solutions that meet your requirements and come from reputable vendors. It’s likely your organization will be involved with your fund accounting software vendor for a long time, so it’s important to do a thorough job of vetting potential vendors.
Review vendor reputation by checking online sentiment, accounting publication reviews, and product endorsements, such as from the AICPA. Check recent industry awards. Inquire about the customer satisfaction rate and customer renewal rate. And of course, ask industry peers to recount their experiences with the vendor. Finally, check references by contacting current customers. Customer success is a great way to judge the potential fit for your organization.
ROI is the standard key performance indicator (KPI) most businesses apply to their software purchasing decisions. Here’s how to calculate it:
Remember that on-premises and cloud computing software offer very different models for cost. With on-premises, the software license cost is a very small fraction of the overall costs lurking beneath the surface. On the other hand, subscription fees make up the large majority of costs associated with cloud solutions. That is why cloud applications almost always offer better ROI. A cloud model also shifts fixed CAPEX to variable OPEX from an accounting and budgeting perspective.
Non-profits need to consider an additional key performance indicator: Return on Mission (ROM). ROM looks beyond the standard ROI formula to make sure your investments have the maximum impact on your mission, not just the bottom line. ROI on its own is not the complete picture. If new software makes your finance team 30% more efficient, how does that translate to your mission and community?
Here’s an example of ROM: Sage Intacct helped Vitamin Angels identify 200,000 in logistical savings in Nigeria freeing money to deliver vitamins to an additional 800,000 undernourished pregnant women and children.
Adopting a new fund accounting software solution can be a big move for any organisation. It helps to start with a solid plan and process for your evaluation. Sage Intacct helps organisations consider their options, evaluate and compare solutions, and build the best possible business case.
The Akuna Solutions Team