Accounting software should help your nonprofit grow without causing sleepless nights and consuming valuable staff time. Because of such, we are discussing six questions to ask your outsourced accounting provider as it relates to your accounting software.
1. Can my nonprofit continue to use our present accounting software?
The outsourcing provider should have experience with the more popular accounting software applications used by nonprofits. More specifically, some examples of these applications include QuickBooks, Abila MIP Fund Accounting™, Blackbaud Financial Edge, and Intacct. The provider will require access to the software through a secure Internet connection. Is your software presently deployed on an in-house server or PC? If so, the provider may recommend that it be moved to a hosted, off-site environment for 24/7 access by on-site personnel and the outsourced accountants.
In some cases, the present accounting software may not be the best solution for your nonprofit. If this is gthe case, the outsourcing provider will recommend upgrading the software to a later version or an entirely new product. This decision will help your organization fully realize the benefits of improved financial management. Furthermore, the decision would have to be made sooner or later, regardless of if your nonprofit outsources its accounting. For help on deciding which accounting software is best for your nonprofit, click here to read “Importance of the Right Accounting Software.”
2. What are the “must-have” features to expect from nonprofit accounting software?
The accounting software recommended or deployed by the outsourced accounting provider should minimally provide the following functionality:
- A general ledger account structure that supports multi-dimensional reporting by natural account, program, funding source, and optional segments as applicable
- Is in full compliance with generally accepted accounting principles for nonprofit organizations.
- Budget development and management.
- Routine processing of accounts payable invoices and payments, accounts receivable and cash receipts, and bank reconciliations.
- Ability to use credit cards and electronic funds transfer technology for payments and receipts.
- Dashboards for real-time financial information to management.
- Integration with third-party systems for payroll.
- Financial reporting capability and flexibility for internal management, Board of Directors, funders, financial institutions, taxing authorities, and other stakeholders.
- Easy preparation of the accounts for the outside auditor.
- Ability to interact with the accounting system via smartphones and other mobile devices.
3. What other automated accounting technology capabilities could the outsourced accountant provide?
A major advantage offered by the outsourced accounting vendor is integration with specialized applications that automate much of the day-to-day drudgery and inherent inaccuracy of handling paper. A primary third-party resource is a cloud-based accounts payable application that automates invoice data capture, approval, payment, and vendor management. Does your organization process 50 or more invoices monthly? If so, outsourcing all or part of accounts payable generates a direct saving of personnel time in addition to improved accuracy and timeliness.
Other candidates for integration are applications for employee time and expense reporting, advance budgeting and forecasting, and payroll and human resource management.
4. Does the nonprofit outsourced accounting firm provide accounting software implementation services?
The outsourced accounting firm normally works with the software vendor on behalf of the client to plan and manage the implementation. Furthermore, this service offers training to key personnel as appropriate to the level of accounting services provided. For the more common accounting software applications, the client should expect the outsourced accountant provider to have personnel who are trained and certified on the applicable software, for example having QuickBooks ProAdvisor or a Certified Abila MIP Fund Accounting™ Consultant on staff. As the outsourcing organization has been involved in numerous software implementations, the time and cost are minimized in relation to a client working directly with the software vendor.
5. Will my nonprofit’s data be secure and easily accessible?
Accounting applications hosted in the cloud are inherently more secure than if run within on-premises’ servers. Applications are usually subject to extraordinary measures to protect access and physical security (e.g., mirror processing at a separate server-site). Further, the provider should offer cloud storage of accounting source documents with tools for easy access.
6. Can our nonprofit organization expect the outsourced accounting provider to stay current with technology upgrades and take advantage of them to our benefit?
To remain competitive, the outsourcing firm must stay current with technology developments. Additionally, these developments should offer significant benefits in efficiency and effectiveness to client organizations. One can expect technologies, now on the leading edge such as artificial intelligence, machine learning, internet of things, software connectivity and blockchain, are already being implemented to varying degrees and will become commercially viable in the foreseeable future for most organizations. As a result, providers of outsourced accounting services are in the best position to implement the innovations and pass along the benefits to their clients. Those who don’t will fail.