WHY TRUE FUND ACCOUNTING™?
Many nonprofits use commercial accounting products initially, but as they grow and gain multiple funding sources, they find off-the-shelf accounting software doesn’t meet their special tracking and reporting needs. Customizing or overlaying features onto commercial software to achieve nonprofit accounting functionality is inefficient, incomplete, and expensive to maintain. At worst, it can open the door to costly errors and complex audits.
To determine whether your organization requires a true fund accounting™ system, ask yourself the following 10 questions:
#1: Do I have specific restrictions that I must apply to funds?
#2: Can I easily measure performance of a program or activity?
#3: Am I able to create reports for varying fiscal years?
#4: Do I have funds that need to be recorded as encumbered?
#5: Can I perform allocations of indirect costs by grantors?
#6: Can I easily tailor reports for each funding source?
#7: Does my current solution incorporate nonprofit-specific accounting rules?
#8: Can I easily manage and report on multiple budgets?
#9: Can I easily show how money is tracked or budgeted?
#10: Does my current solution integrate with other software?