Has your nonprofit been experiencing a lot of growth or have you started adding funding through new grants? It’s great, right? You’re able to better support your community and have more resources to help fulfill your mission. But, with more funding, comes a few more problems. A lot of smaller nonprofits go for the fast and affordable off-the-shelf financial solutions, and when you’re just starting out, that probably works just fine. Then your nonprofit grows and gains multiple funding sources that commercial financial software just can’t handle, given nonprofits’ special tracking and reporting needs.
I’m sure all of this sounds familiar to many of you. A lot of nonprofits try to make due, adding spreadsheets, or trying to customize or add new features to their software. All of these things serve as Bandaids, at best! When do you know you’ve reached the point of no return? Ask yourself the following questions:
- Am I able to create reports for varying fiscal years?
- Can I perform allocations of indirect costs of grantors?
- Does my current financial solution incorporate nonprofit-specific accounting rules?
- Can I easily tailor reports for each funding source?
- Do I have funds that need to be recorded as encumbered?
If you answered “no” to any of these questions, you can find yourself facing serious consequences, including loss of funding or tax-exempt status. I know, having to move all of your data and implement a new system sounds scary, but there comes a point in time when you just can’t continue on with multiple spreadsheets or face another audit without proper reporting.
We have a couple, short whitepapers that can help! Read up on the, “10 Reasons Why Nonprofits Need True Fund Accounting™” or do more homework with our short paper, “Has Your Nonprofit Organization Outgrown its Small Business Accounting Solution?” We even have an upcoming webinar next Wednesday, April 25, “Graduate to a True Fund Accounting™ Solution” during which you can talk to an expert and determine if now is the time to move up.