Software applications dedicated to financial management for nonprofit organizations have been around since the early 1980s. These nonprofit financial applications and their underlying technology have undergone significant changes in the past 30-plus years. Nonprofits themselves, and the reporting requirements they must adhere to, have evolved as well. Combine these system and organizational changes with the turnover that nonprofits experience among financial staff and you have the recipe for an underused and/or misused financial system.

Years of system conversions, staff turnover, changes to funding streams, and evolving reporting requirements have a tendency to transform financial systems into something that resembles a dusty, jumbled, overfilled attic.

Long-term use or even short-term use by an ever-changing financial staff negatively impacts a financial system’s configuration, creating a cluttered and inconsistent database. Worse yet, overlapping business rules and workflows that are no longer pertinent for your organization’s needs result in user dead ends.

These system dead ends create substantial obstacles to the users’ ability to efficiently leverage your financial system to meet both external and internal stakeholder requirements. To compound matters, your staff is working with incomplete knowledge of the accounting system, having never received full training on its proper use. The drag on efficiency is palpable in a neglected system; shortcuts making staff’s lives easier, automated business processes that save time, and procedures that protect funding and reporting integrity have all been diminished over time.

The end result of this neglect is an accounting system that has morphed into an ever-present hindrance to your staffs’ daily work lives. Furthermore, a neglected financial system and staff ultimately result in stale information being generated for stakeholders, decreasing productivity, and cratering staff morale. Ironically, the tool that’s supposed to be creating a positive impact for your organization’s management and stakeholders has become a drag on your operations. Limiting your organization’s ability to provide proof of stewardship required by your funders. It’s at this point many organizations perceive a wholesale change to their system can cure what ails them. However, in reality, a complete system migration merely re-propagates the very issues you’ve failed to address in your old system, and injects them into the new financial system.

Conducting a System Assessment

The solution to all this is a system assessment, which is designed to address your neglected financial system and staff. An assessment gives organizations a point of validation from which to build on and improve.

The first stage of an assessment starts with the review of current system processes. Stage two goes “under the hood” focusing on an in-depth analysis of the chart of accounts’ structure and financial statement formatting as they relate to supporting the organization’s reporting and tracking requirements. The third step involves staff interviews with system users and stakeholders, as to what is and is not working from their perspective.

The key outcome of the assessment stages is the creation of a unique roadmap document. Which outlines the steps necessary to refresh the performance of your system and staff. Frequently neglected systems share common characteristics that, if addressed, can alleviate the need to consider switching systems and/or staff. These characteristics include:

  • Re-ordering of the chart of accounts and shedding unused segment values makes data entry and reporting more logical.
  • Cleaning up and archiving Accounts Payable vendor and Accounts Receivable customer rosters, the register histories can speed up the system while minimizing staff time spent wading through obsolete information.
  • Closing, optimizing, or deleting old fiscal years to speed up report generation and system inquiries.
  • Identifying additional modules that can create efficiencies for staff; efficiencies such as eliminating the need to maintain manual spreadsheet schedules for allocations, purchasing, reconciliations, and other needs.
  • Re-training staff to address underutilized modules, that if retuned and used properly could create significant efficiencies for an organization.

A system assessment methodically researches the organization’s data management and reporting needs to identify challenges to organizational success, and outlines recommended steps for remediation. The research includes in-depth discussion with all stakeholders in the financial management and reporting processes, as well as hands-on diagnostics of actual data. The written roadmap document outlines problems, as well as solutions, and identifies resources needed to achieve success. Steps to improving system efficiencies, and therefore a more effective system of record and reporting, is created.

About the Author

Bob Schilling is VP of Sales for Capital Business Solutions, Abila’s Business Partner of the Quarter. Each quarter, Abila recognizes the top Business Partner, based on its continued support of our association and nonprofit customers. Abila Business Partners are trusted experts authorized to resell and implement one or more Abila products.