21 Feb ERP For Non-Profit Organisations
You don’t have to peruse the media too widely to appreciate how non-profit organisations are playing an increasingly influential and powerful global role in today’s society and business. They are typically operating in a capacity that has far reaching impact on communities, groups and causes. Small or large, national or international, we can easily find accounts of dynamic organisations in pursuit of any number of missions, be they; social, religious, educational, political, in health or environmental. We all understand that these organisations are, by definition, disinclined to generate their own money and their focus is largely on grants and donations, working in a way that incurs as little cost as possible and avoiding unnecessary infrastructure. At senior levels, many directors are volunteers and offer their time ‘pro bono’. Crucially, within these operations, there is a duty of care so that all monies received are not only managed carefully but that this stewardship can be publicly proven. These organisations strive for efficient management and very often have to observe strict rules on financial governance and traceability to offer transparency to donors.
If we consider the need for information tracking surrounding these points, we can turn to technology for help. Although it’s recognised that business-wide systems are used in the commercial sector, for the reasons above, ERP has now gained significant presence within the non-profit community. ERP systems for NGOs are becoming more and more desirable because they meet both the aim to simplify reporting and financial complexities, and by helping manage disciplines such as grants, funds, commitments, budget, and fundraising, they are satisfying compliance regulations and the scrutiny of would-be donors.
Very often, we see evidence of Non-profit management solutions helping to introduce efficiency and productivity not, hitherto, experienced in this sector. Generally, the needs of non-profit organisations are split into three main areas.
Accounting Integrity. Accounting for non-profit organisations follows complex rules and standards. Like any business concern, non-profit organisations incur expenditure when providing their services and this is normally through funding from grants or donations. This facet of their operations places demands on their accounting practices in a way that is markedly different from commercial concerns. Instead of focusing on profit and revenues, they measure the effectiveness of money deployment. Some NPOs have affiliates abroad or run projects in international locations. These incur expenses denominated in foreign currencies and require the same multi-currency execution, control and reporting capabilities as commercial organisations.
Transaction Visibility. Strict requirements governing non-profit activities, along with the desire for transparency, create a need for visibility of transactions by sources, goals, and other attributes.
Reporting Requirements. Non-profits are required to prepare statements of operational results and fund balances in the appropriate format adapting to the requirements of stakeholders such as donors, government regulatory agencies, internal and external audit bodies. In order to maintain funding, meet internal and external reporting needs there is an ever present imperative to run an integrated ERP system.
Acumatica is one such system. It is a comprehensive cloud-based ERP that serves diverse markets. Fully integrated, it unifies data, end to end, across a business. NonProfitPlus is an Acumatica application developed by a specialist provider and offers a host of functions dedicated to run a non-profit organisation. Other relevant modules include: Time and Expenses, Fixed Assets and Project Accounting.
Key benefits of the NonProfitPlus Suite:
- Fund Accounting. Track revenues with restrictions against expenditure made for specific projects and purposes. This module produces a fund balance and maintains accounting integrity between recognised parameters.
- Restricted Funds Management. Define fund characteristics and eliminate cross-mingling of cash. NonProfitPlus provides the ability to define and manage how cash is received and expended without over-complicating the data entry process.
- Grant Management. Managing grants can be overlooked in most accounting systems. Grant Management module allows you to manage, track, and report on grants, even if the grant life supersedes the financial year.
- Encumbrance Accounting. NonProfitPlus understands your need to reserve funds to fulfill a future obligation. You can record these obligations at the time they are anticipated, even if the services have not yet been rendered or planned fully.
- Budget Checking. All non-profit organisations are required to operate within board-approved budgets. After creating budgets, they can be released into Acumatica and configured to notify users when an over-budget scenario occurs. The Budget Checker tool is available on all data entry screens and allows users to fully visualise the impact on their current transaction.
- Enhanced Audit Trail. Acumatica Cloud ERP provides you with a complete audit trail that covers all modules and traces entry and approval of transactions.
- Board Management. You can engage your leadership to raise financial awareness. NonProfitPlus allows you to effectively communicate with board members before they take a seat at the table, granting your leadership time to discuss what really matters.
- Volunteer Management. You can report and track volunteer contributions to secure additional funding. Not only does this allow you to recognise and value your volunteers, but you will be able to prove your effectiveness in meeting donor requirements for matching funds achieving GAAP compliance. GAAP specifies Time Card and Time Tracking for activity measurements.
Conclusion. Regardless of the mission, almost all Non-Profit Organisations face numerous challenges and complexities. Acumatica has helped many NGOs counter these and become more successful. The NonProfitPlus suite allows users to interact via a web browser on any device, anywhere. Employee empowerment is a natural and direct consequence of this, across the entire organisation. Appropriately implemented software designed specifically for the NGO user will inevitably result in growth and improved efficiency, and, in turn, better serve the wider cause.