Not-for-profit organisations are under constant pressure to do more with less. They are often expected to deliver services to a high standard, with minimal funding and resources. This can make financial management a challenge.
However, there are ways that a financial management system (FMS) such as SunSystems or NetSuite Financial ERP can help not-for-profit organisations to overcome these challenges and improve their financial management. Here are seven areas where financial management systems can help:
Not-for-profit organisations are required to produce a range of reports on their activities and financial performance, both internally and externally.
This information is used by donors, funders, regulators and the general public to assess your organisation’s work, making it important that your reports are accurate and up-to-date. It’s also instrumental to the internal team for making data-driven decisions fast.
Your accounting software should make it easy for you to produce real-time reports you need when you need them. It should allow you to generate reports on demand, or schedule them to be produced automatically. It should also allow you to customise your reports, so you can include the information that is most relevant to your audience.
2. Donor management
If you rely on donations to fund your work, it is important to manage your donors effectively. The right accounting system will provide the tools and functionality you need to manage donations and donor information, from the initial donation to the final receipt.
This enhances your organisation’s relationships with your donors and ensures that they are happy with how you are using their donations.
Fundraising activities are an important source of income for many not-for-profit organisations. A financial management system can help you to plan and track your fundraising activities, so you can see how effective they are.
This information can be used to improve your fundraising strategy and make sure that your organisation is maximising its income from this vital source.
4. Grant management
Effective grant management goes beyond just keeping track of money. It also involves ensuring that the right processes and procedures are in place to meet the requirements of the grant.
By using dependable finance ERP software, you can automate and manage the end-to-end grant process from start to finish. This will help you to ensure compliance with all the relevant regulations, as well as improve your organisation’s chances of securing future funding.
It will also give you visibility of your organisation’s overall financial situation, so you can make informed decisions about how to use your resources.
5. Process optimisation
With an FMS in place, not-for-profit organisations can develop and streamline their financial processes. But it goes beyond financial processes – an FMS can automate and manage all organisational processes, from purchasing and inventory to asset management and reconciliation.
This not only saves time and money but also makes the organisation more efficient and effective while reducing costs.
One of the major benefits of modern finance systems is providing quick access to insightful and actionable data.
This data helps both employees and upper management make informed decisions backed by verifiable information.
7. Tracking income and expenditure
By tracking your income and expenditure, you can get a better understanding of your financial situation. This information can be used to inform your financial planning and budgeting.
A good financial management system will make it easy for you to track your income and expenditure. It should allow you to categorise transactions, so you can see where your money is being spent.
8. Financial planning and budgeting
Reliable accounting software for charities can help you to plan your finances and budget more effectively. It can give you a clear overview of your finances, so you can make informed decisions about how to allocate your resources.
This is important because it can help you to avoid overspending, which can put your organisation at financial risk.
There are a range of compliance regulations that apply to not-for-profit organisations. These include financial reporting standards, taxation requirements and anti-money laundering regulations.
The system you choose should help you to comply with all the relevant regulations. It should provide features such as audit trails and user permissions, so you can control who has access to your organisation’s financial data.
It should also allow you to produce the reports you need to meet your compliance obligations.
There are many financial management systems available, but not all of them will be suitable for your organisation. When choosing a system, it is important to consider your specific needs and requirements.
The seven areas covered in this article should help you to identify the features that are most important to you. By considering these factors, you can make sure that you choose a system that will help you to run your organisation more effectively and efficiently.
Need help finding the right system for your organisation? Download our free guide, The 20-Point Guide to Selecting and Implementing An Accounting System for Your Not-for-Profit Organisation.
Otherwise, you can book a call with one of our experts to discuss your specific requirements. We’ll then provide you with a tailored demonstration of how our accounting software for charities meets your needs.