Connecticut CPA Magazine Excerpt: It's a Journey - Not-for-Profit Finance and Accounting Software Selection

By Jim Norton, CPA, Principal – GRF CPAs & Advisors and CTCPA Advisory Council Chair

If your organization is still generating manual reports, printing paper checks, and/or collecting antiquated expense reports, it's time to revisit your finance and accounting software.  

Not-for-profits and associations are experiencing the same pain points as their corporate counterparts, including hiring woes related to the great resignation and more recent pressure to reduce overhead with a looming recession. Technology is the key to achieving the efficiency and automation necessary to support your organization's present and future finance and accounting needs.

Not-for-Profit Finance Software Solutions that Scale

What served you well in the past is not cutting it now. Like many not-for-profits and associations, your needs have changed dramatically over the last couple of years. If digital transformation is now part of your organization's journey, it's helpful to have a map to guide your organization in making the best finance software buying decisions.  

While there are almost unlimited software options available in the marketplace, the only workable solution is the one that meets your needs, solves day-to-day problems, helps you scale, and provides value to your organization.  

Beginning Your Software Selection Journey

If you and your team are brave and ready to take the plunge, here are some key guideposts for your digital transformation journey.

Pick your path.  

Inventory your current finance and accounting technology stack. Be sure to discuss features, benefits, limitations, current and future needs, user experience, and integration with other software products. While legacy systems are difficult to give up, identifying and implementing the right software solutions help you build a stronger organization going forward.

Understand your ability.  

Be honest about where you are currently falling short. Are you and your team losing data, drowning in paper, or struggling to meet deadlines and provide reports? Do your audit management letter comments include findings about lack of proper documentation around approvals, revenue recognition, or appropriate reviews?  

These are all signs that it's time to upgrade your technology stack. Finance and accounting are critical to any organization's ability to scale, but they can also shackle the organization to the status quo. Do not let legacy systems or institutional processes and procedures overshadow what is best for the organization.  

Consult a map.  

Discuss your organization's long-term outlook with leadership. Any software solution purchasing decision should support the organization's future needs, so it may be helpful to approach your digital transformation journey as part of strategic planning. Bring your leadership into the conversation and help them recognize the benefits of investments in finance software solutions that support the organization's future. Plan for the whole organization – not just the accounting and finance team!

Be open to new experiences.  

Consider whether your organization has outgrown general accounting software. If you have multiple locations, juggle government grants, and struggle with managing cash as your organization grows, it might be time to take the plunge and invest in an enterprise resource planning (ERP) system. ERP connects day-to-day functions and applications across the organization in a way that supports greater transparency, flexibility, and collaboration – all critical to your ability to scale.

Don't go it alone.  

If you are ready to consider an ERP solution, think about your organization's preferences. Is your team “all in” for an all-in-one solution, or is it more realistic to create an integrated network with your ERP at the center? A single system is the clear winner from an efficiency standpoint.  

However, if team members are comfortable using highly specialized legacy software tools for a specific purpose, you might have a fight on your hands when you want to replace them with the ERP solution. Good communication in the exploration phase is the key to implementation success.  

Trying to get an all-in-one-minded organization to shift to an environment where they must log into multiple different systems to perform different work tasks can be a painful undertaking.  

Bring the right equipment.  

Do not allow budget concerns to derail strategic investments in the tools your finance team needs to be an asset to the organization. When not-for-profit leaders hear “software solutions,” they immediately think about the competing cost of the programs and services that are integral to fulfilling their mission.  

If budget is the only reason your organization is still hanging onto legacy systems and outdated processes and procedures, begin with incremental change. Not-for-profits and associations can identify easy “wins” and implement cost-effective tools that solve immediate problems. With the right approach, these initial software investments can integrate with broader software solutions, like ERP, in the future.

Reaching the Summit

To reduce administrative expenses and direct funding to their mission, not-for-profits and associations often postpone or overlook important technology investments. Unfortunately, many will pay the price later for not upgrading and expanding their technology stack.  

Modern organizations require financial software solutions that provide the critical insight, automation, and flexibility to meet the growing demand for their programs and services.