2007 Review of Not for Profit Accounting Systems

Because
of these new requirements, it will be more important than ever to have a software
system in place that performs the necessary functions that nonprofit organizations
require. Such functions include a solid allocations module that allows you to
allocate both direct and indirect costs, perform advanced calculations, and
ensure compliance with the previously mentioned OMB cost principles.

A grant administration function can also prove important, allowing users to
keep a solid history of all grants, manage funds, and control budgets and future
expenses. An encumbrances module will allow users to adequately plan for all
future expenditures, with the added ability to track and budget expenses properly.
As well, a program’s AR capability must be able to sufficiently track
all customers and donors, along with maintaining a solid transaction history.
Fundraising capability is also key, particularly for larger nonprofits. For
those that offer products for sale, solid inventory and sales order modules
are imperative. And with the additional reporting requirements that are due
to be implemented in 2008 with the revised IRS Form 990, it’s more important
than ever that an organization’s software track, manage, and produce the
reports and other data that will be required by the federal government.

Do all of the products reviewed here offer all of these functions? The easy
answer would be no. But the more detailed answer is that many nonprofits, particularly
those with specialized scope, require only a small portion of the functions
that many of these products offer.

Here are the review categories for the 2007 review of not-for-profit products:

Ease of Use/Flexibility
It’s important to note that, generally, the more complex a program is,
the more detailed and complex the system setup will be. Though not always the
case, I tried to examine general determining factors such as company setup,
data- entry screens and lookup options.

Modules/Scalability
Though the majority of the programs reviewed this year are modular in scope,
I looked at system function in general, along with available modules, add-ons
and any other third-party applications that may work in conjunction with the
product. I also considered versions available. Does it offer a single-user system?
Is it better for smaller companies? Will it be able to support a growing organization?

Features & Functionality
What does the program actually do? All of these products offer strong accounting
functionality, but what makes this program stand out? What makes it irresistible
to the nonprofit organization?

Reporting
Reporting functionality is important to all businesses, but it’s even
more important to nonprofit organizations. Some organizations have been known
to change software products simply based on reporting capability (or lack thereof).

Support/Help
This area is really hard to assess until you actually need to use customer support.
What I do consider here are the services available. Training is another aspect
that is difficult to assess without going through a training course, etc. However,
I explain the training services that are available.

Relative Value
This area lists the approximate cost of the system. Obviously, a lot of variables
enter this equation, such as how many users you’ll have, the number of
modules purchased and the database utilized. I recommend a visit to the vendor
websites, where you’ll find extensive information, links to interactive
presentations and demo downloads. No one can assess the value of a product as
well as the person or organization that will be using it.

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