A Simple Guide to Accounting for a Nonprofit Aplos University

However, donors might hesitate to give if your functional expenses become too large. When choosing accounting software for nonprofits, it’s crucial to consider a few important features. While the size of your organization may influence your choice, some features, such as activity tracking and reporting and donor management, are essential regardless. Zoho Books is a cloud-based accounting software that provides features such as invoicing, expense tracking, and inventory management. It is aimed at small businesses and includes integrations with various other business tools.

Today’s leading accounting platforms offer standard security features, such as data encryption, secure credential tokenization and more. While human error will always play some role in security breaches, you can be confident in your accounting platform when it comes to keeping your information safe. Sage Intacct is best for global nonprofits that must work across currencies and tax codes to manage their financials. This form is required for most tax-exempt organizations that receive more than $200,000 in annual revenue or hold more than $500,000 in assets.

• As your nonprofit grows, it becomes less sustainable to maintain your accounting information in a spreadsheet or a small-scale generalized software solution.
• Financial statements provide insight into how much money your nonprofit has, where you spend it, and how it’s used.
• Some of the links that appear on the website are from software companies from which CRM.org receives compensation.
• Non-profit accounting software may vary in cost, depending on the company offering the software and the features it offers.
• Blackbaud Financial Edge NXT offers Starter, Essentials, and Pro packages for your nonprofit to choose from.
• Additionally, sloppy or inaccurate accounting can lead to problems with the IRS; such problems include possibly losing nonprofit status, hefty fines and even criminal charges.

Specific Professions

• Standout features include precise tracking and management of multiple funds to ensure financial transparency.
• Whether you are navigating from entering expenses to collecting payments, the sidebar is intuitive to use and doesn’t get lost in confusing jargon.
• Opt for software with robust security measures, such as data encryption and secure access controls.
• Track donors’ contact information such as their address, email, phone number, and other information on contact cards with AccountEdge.
• Quicken is a comprehensive money management software that offers a range of features for nonprofits.
• QuickBooks gives nonprofits the ability to perform basic nonprofit accounting functions.

Nonprofits must also be careful to record and report the valuation of specific employee benefits, which can count as taxable income if not reported properly. “A nonprofit’s UBTI includes any qualified transportation fringe benefits and on-premises athletic facilities provided to employees,” Treppa noted. Some of a nonprofit’s income can be taxable if not reported or managed correctly.

This makes it more likely for the CRM to be regularly updated or offer troubleshooting assistance. However, compared to Odoo, it’s relatively more straightforward and lightweight, making it somewhat easier to use for non-trained staff. However, it remains customizable in many ways due to having an open API. This may make it preferable for smaller-sized freshbooks for nonprofits NGOs and nonprofits compared to CiviCRM, as it generally requires less knowledge on initial use.

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Learn how we stay transparent & our accounting software review methodology. As financial operators ourselves, we know how critical and difficult it is to make the right decision when selecting software. FreshBooks is known for its intuitive interface that’s easy to navigate.

QuickBooks Online for Nonprofits: Most user-friendly

Wave’s free invoicing tools offer the ability to send customized and branded invoices and automated payment reminders. You can also accept credit cards, bank payments and Apple Pay from invoices. Its free accounting tools offer income and expense tracking, reports (such as overdue invoice reports) and a reporting dashboard. Finally, its banking tools allow you to automate bookkeeping, receive instant payments and deposit checks via a mobile app.

Why Nonprofits Need CRM Software

For instance, an income statement for a company would show revenue from the sale of goods, and its expenses would show the cost of goods sold. A statement of activities for a non-profit would show revenue from contributions and expenses from fundraising. Keeping overhead costs low from the beginning is a great way to demonstrate trustworthiness when you seek financial support. People want to give to causes that will put their donations to good use, so keeping expenses to a minimum will help them decide to support you. The cash accounting method records transaction amounts when the money is transferred in or out of the organization. The accrual accounting method records the amounts when the transaction occurs, regardless of when the money is transferred.

Top 10 Accounting Software for Nonprofit Organizations

While you’re optimizing your accounting processes, consider how you can enhance other aspects of your nonprofit’s operations. Zeffy offers a 100% free fundraising platform for nonprofits to save unnecessary software and transaction costs. Serenic Navigator is a cloud-based ERP solution designed for nonprofit organizations and government agencies alike.

Sign up for a 30-day free trial of Fund EZ before you make your final purchase. Then, contact their product specialists to discuss the features of your nonprofit’s ideal solution and receive a custom quote based on your organization’s needs. The internal controls of Financial Edge allow your organization’s system administrators to allow or deny access to specific information within the software. This supports the confidentiality of your donors’ personal information, maintains security, and prevents financial fraud. Intuit QuickBooks has a variety of pricing options from SimpleStart to Advanced.

Discover the essential skills and key responsibilities of a nonprofit bookkeeper. Take advantage of free trials or demos to test the software in real-world scenarios. Involve key staff members in this process to get diverse perspectives on usability and functionality. Some of the links that appear on the website are from software companies from which CRM.org receives compensation.

Infoodle is also integrated with Xero accounting software, making communication and donor analytics much quicker and simpler. Nonprofit accounting is different from the practices of for-profit firms. Nonprofit groups must adhere to stringent financial accounting rules since they rely on donations and grants.