As they grow, many nonprofits find themselves reassessing their accounting software needs. They may have started small, with a general-purpose accounting package like QuickBooks, and the evolution of their organization has created more sophisticated requirements. For instance, if the nonprofit receives grant funding it will need fund accounting capabilities to track spending against grant requirements and restrictions.
Choosing an accounting software product is challenging as the market is crowded with products at a wide range of prices and features. Product review sites such as Capterra and G2 list hundreds of accounting products which are intended for nonprofits. You likely do not have time to evaluate every software solution out there, so finding user reviews can ensure you’re considering all your options.
The following steps can help you narrow your search to those products which will fit your organization’s size, have the right features, and fit within your budget!
1. Determine the size and complexity of your requirements.
Some products, especially enterprise resource planning (ERP), are explicitly built with a certain size customer in mind. That size can be expressed in the number of employees, revenue, geographic reach, functional modules, and number of users.
Knowing where your organization’s profile fits for a software vendor can save you time and lead to greater satisfaction with your choice. Most software is optimized for specific types of organizations. Look for a vendor with many organizations of your size, revenue level or number of users.
Finding the right product with the appropriate level of complexity can also save your organization money in the long run as you should only pay for access to the tools you need. Be mindful of the number of users you have as many products bill customers based on number of “seats” or accounts. Once you’ve found the right software, designate someone on your staff to remove former employees and onboard new employees as needed.
2. Choose how to integrate your solutions.
Is accounting an island or do you need it to be integrated with operations, such as program management? Either approach can be successful, but if you choose integration you may want to place a premium on standardizing your enterprise architecture and sticking to a family of compatible products rather than a best of breed approach which could result in incompatible products and higher total cost of ownership.
3. Decide how much customization you need.
The best nonprofit accounting software already contains customizations which meet common requirements for your type of nonprofit, whether it be a nongovernmental organization, a religious organization or ministry, a membership organization or other nonprofit. The more customization you need for unique requirements increases the cost and time of the implementation and adds technical risk. Again, targeting solutions from vendors with decades of experience in your market means market requirements will be available and customization wouldn’t be required.
4. Choose your deployment method.
Knowing whether you prefer a cloud solution which is hosted by a vendor or a package that you run on your own hardware and network can narrow your options. There are a few products that are available in both cloud and on premises deployments.
5. Support is essential.
For some organizations, it may be appropriate to hire a consultant who specializes in writing requests for proposals, analyzing requirements, and making recommendations for software purchases. The ideal consultant would have experience with similar nonprofits and has current knowledge of the software market.
If you’re on a budget or have simpler needs- think “out-of-the-box” software- choose a vendor that not only offers customer support and ticketed requests, but also gives you access to a knowledge base with best practices, how-to-guides, and training videos.
When you’re considering vendors, ask the salesperson to give you a demo of the support options to ensure your staff will have the resources they need to navigate the product. Choosing an industry leading software solution with decades of experience can help ensure that the knowledge base and support resources are deep and include articles for your organization’s specific needs.
These five techniques will help you narrow the field so you can conduct a more efficient evaluation. Determining and documenting your requirements is an essential step in the process and will be necessary for evaluating the success of the implementation regardless of what product you choose.