Peter J. Stam
[Publisher’s Note: This article was written by AccuFund, a provider of financial solutions for nonprofits. AccuFund is a Philanthropy Journal business partner.]
Too often, nonprofits delay the investment in new financial-management software far beyond their current system’s useful life.
They do that for many reasons they believe are valid, including, “we’re just too busy to deal with it now,” or “it’s not in the budget,” or “our tried-and-true software is doing just fine.”
So when should you look for new software? Let’s look at each of the arguments above for answers.
We’re just too busy now
When I hear this, I usually think they are in fact in need of new software. The first question I ask is how much of their reporting are they doing in spreadsheets?
If they are doing 50 percent or more of their reporting in spreadsheets, and not letting those reports be generated from the accounting system, that may be why they are too busy.
Current technology should be generating 90 percent or more of your required financial reports. If you need to add a graph for the board, current products will export reports into a spreadsheet where you can add a graph or a comment.
You should not be reading a trial balance – a list of all the nominal or general ledger accounts – or basic profit-and-loss statement, and re-keying the data.
Many current products have spreadsheet interfaces that allow you to build the whole report in the spreadsheet and just push a button to refresh the data each month.
If you are concerned about the conversion, most current products have excellent import functions that will allow you to quickly and easily convert from your old software to your new software.
Yes, there will be a learning curve, but in the end, the number of steps for activities like accounts payable or payroll are actually reduced compared to the prior system.
It’s not in the budget
Look at your five-year total cost of running the current product, including support fees and departmental operating costs.
It frequently is the case that the total operating costs can be lowered, including the cost of the new product, because of the high maintenance fees on some older products and the labor required to work around them.
With the availability of “cloud” or software-as-a-service solutions, the up-front fee is even lower as you are renting the software rather than buying it.
Our tried-and-true software is doing just fine
If your software is more than five years old and it is not getting regular updates, there may be problems.
Current competitive vendors are regularly updating their products at least once a year with major new functionality for their clients.
Vendors are making it easier to integrate with productivity tools such as spreadsheets, and they are providing web portals to provide employees with access to information over the web.
They are changing their user interfaces to be friendlier for the user and consistent across modules.
These advances make the user experience better for all members of the finance staff, from the chief financial officer to the accounts-payable clerk, and provide interfaces to allow end-user departments the ability to run reports and look at data in a controlled environment, saving even more time for the finance staff.
Find out what you’re missing
Non-profit accounting vendors now offer free webinars where they provide a live demonstration of their software and answer questions about their products.
It is worth a couple of hours of your time to look at what the current technology offers. You might be surprised to find out what they can do to improve your financial office.
Peter J. Stam is president of AccuFund, which specializes in financial solutions for nonprofits.