From fundraising to operations, specialized technology can improve nearly every part of your nonprofit organization. However, when it comes to finances, many nonprofits, foundations, and associations still rely on spreadsheets and other outdated systems to run the finances of the organization
The right technology can transform your nonprofit’s ability to manage its finances effectively, enabling you to better track your budget, file appropriate reports and tax forms, easily apply for funding, and maintain financial compliance. The right nonprofit financial management technology, including ERP, answers questions for leadership, staff, funders, and Boards.
In this guide, we will explore ways technology can improve your nonprofit’s finances and why you should adopt sophisticated, modern financial tools.
Centralize and Connect Your Systems
As your organization grows, so will the various application tools to handle financial-related tasks, such as your fundraising platforms, payroll system, ticketing, or grant management software. Over time, using disparate tools can lead to data silos and inefficiencies, potentially requiring time-consuming data migrations.
A centralized nonprofit financial platform, including ERP, can help keep all of your data in one place, making it easy to track, understand, and manage your finances. Specifically, with the right financial technology, your nonprofit will be able to improve:
- Financial visibility. When all of your data is present in one system, you can get a quick overview of your finances through comprehensive dashboards. Plus, you can rest assured that your reports aren’t missing any data siloed in disconnected tools.
- Collaboration. Allow your entire finance team, and the broader organization, to access and update your financial data as needed. With the right tools, your bookkeeper, accountant, finance committee, and other financial team members can collaborate to manage your finances.
- Financial forecasting. When you have an easily accessible overview of your nonprofit’s finances, you can make more accurate predictions about your organization’s financial future. As a result, you can set well-informed budgets and more easily plan for the future.
When assessing financial management tools, such as ERP, look for solutions that integrate with your current software. Some integrations are easy to set up, allowing you to immediately get data flowing from one tool to the rest of your system.
Improve Financial Decision-Making and Reporting
Technology allows you to visualize your financial data in new ways and get updates in real time, improving your ability to analyze information and make strategic decisions. For instance, ERP and financial software with overview dashboards can track top key performance indicators (KPIs), providing instant updates on your programs’ efficiency, liquidity, and fundraising return on investment (ROI).
With this information, you can craft more accurate nonprofit budgets, improving your ability to plan ahead. Then, if you need to make adjustments, you can get the high-level information you need quickly.
Additionally, financial tools can generate a wide range of reports that provide dynamic visuals for presentations and stakeholder communications. For example, in your annual report, you might share a breakdown of the ROI for each program to demonstrate responsible resource allocation to donors.
Create a Foundation for Growth
Outdated financial management tools, including spreadsheets, can only support your nonprofit’s growth for so long. Mid-size and large nonprofits require scalable financial software that evolves with their organizations. With reliable financial management software backing your efforts, your nonprofit can more easily:
- Support new teams. If your nonprofit plans to open a new site, support a remote team, or otherwise expand, technology can help you do so in an organized, sustainable manner. ERP or modern financial tools give staff new ways of understanding the financial health of their teams and departments
- Reduce manual maintenance needs. Advanced financial tools can automatically reduce data entry needs, identify trends, and generally aid your team in maintaining and tapping into your financial data.
- Ensure data continuity. Your nonprofit likely has years of financial data, and all of that information should be easy to access, analyze, and understand. More than ever, you need flexible and scalable financial management software to support you even as your nonprofit evolves over time.
Investing in new technology is a strategic decision your nonprofit should always weigh heavily. Build out a technology roadmap to help your nonprofit understand current and developing financial management tools. Then, start researching tools that align with your needs so you can begin reaching out to vendors to ask questions, test different solutions, and find the right platform for your nonprofit.
Guest Author
Jennifer Alleva is the Chief Executive Officer at Your Part-Time Controller, LLC (YPTC), a leading provider of nonprofit accounting services and #65 on Accounting Today’s list of Top 100 accounting firms. Jennifer brings over three decades of expertise in accounting and leadership to her role as CEO of YPTC.
When Jennifer joined YPTC in 2003, the firm consisted of just over 10 staff members. Since then, she has helped grow YPTC into one of the fastest-growing accounting firms in the country.
Jennifer’s accomplishments include her tenure as an adjunct professor at the University of Pennsylvania Fels Institute, her frequent speaking engagements on nonprofit financial management issues, her role as the founder of the Women in Nonprofit Leadership Conference in Philadelphia, and her launch of the Mission Business Podcast in 2021, which spotlights professionals and narratives from the nonprofit sector.
