Selecting Accounting Software for Your Nonprofit

What You Need to Consider Before SelectingAccounting Software for Your Nonprofit Organization Rebeka Mazzone, CPA February 16, 2011 Use Twitter Hashtag #npweb Special Thanks To Our Sponsors

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Today’s Speaker Rebeka Mazzone, CPA Director, Rhode Island Region Accounting Management Solutions Hosting: Sam Frank, Synthesis Partnership Assisting with chat questions: April Hunt, Nonprofitwebinars.com

What You Need to Consider Before SelectingAccounting Software for Your Nonprofit Organization Rebeka Mazzone, CPA Director, Rhode Island Region

Objectives• Understand various software options and prices• Learn the key considerations before making a decision• Walk away with a basic idea of where to start 5

Software Selection ProcessMy view of the World:• Start with the end in mind• GIGO• Consider the user(s)• Pay to have custom reports designed• Training, training, training

Software Selection Process1.Internal decisions and needs2.Outline specific functionality and features3.Sketch out chart of Accounts4.Demo Software Packages5.Submit requirements to vendors (RFP)6.Decision Process7.Training8.Data Migration and Implementation9.Training10.Plan for the unexpected!11.Training

Internal Decisions and Needs• Understand your organization’s mission and strategic goals• Create internal project team of key decision makers and key software users.• Decide on a timeline• Identify all areas of the organization that will be affected

Internal Decisions and Needs, cont’d• Ensure you have the resources to support the selection• Decide on budget, and how flexible that budget is• Understand other costs

Implementation Plan• A plan is key to a successful implementation• Make sure plan is thorough, specific, and flexible• A typical implementation plan should define: • Dates and deadlines • Roles of consultants, vendor, executives, trainers, end users, etc. • Key milestones• Steps of a typical implementation plan: • Design basic structure and process workflows • Data conversion and migration • Build and test • Training and support

Outline Specific Functionality andFeatures• Software • Functionality and features • Ability to meet unique needs • Ease of use – who are the users? • Ease of installation and maintenance • Ease of customizing software and reports • Ease of integrating software with other software packages

Outline Specific Functionality andFeatures, cont’d• Vendor • Financial Stability • Knowledge of industry and commitment to market • Customer support and service • How does that support work? Is it through a reseller or third party, or is it through the vendor directly? • Recommendations and references from users • Services available – consulting, customizations, etc.

Outline Specific Functionality and Features, cont’d •Number of Users •Multiple Net Asset Tracking •Grant and Endowment Allocations (endowment, grants) •Deferred revenue •Automate processes – report generation, posting, purchasing, invoices, bank reconciliations •Paperless •IT Support •Other systems (donor, tickets, registration, housing, payroll) 13

Sketch Out Chart of Accounts• The ultimate goal should be to keep reporting in the software – nothing in Excel!• Draw an organizational chart of departments, programs within departments, and grants funding programs• Understand how reporting works in the software

OrganigationSegment 1 Department 1 Department 2Segment 2 Program 1 Program 2 Program 3 Grant 1 Grant 2 Grant 3 Grant 4 15

Sketch Out Chart of Accounts• Questions to ask yourselves during design • What reports are needed? • What level of detail? • What reports are required GAAP, State Reports, etc. • What reports are you currently creating in Excel? Why? • Do you need to track restrictions? • What other cost centers, departments, locations, etc. do you need to track? • Do you require any self-balancing accounts? • Do you need to track, and report on, endowments and unitization?

Demo Software Packages •Limit to 4 Demos •4 Tier’s of Products – My Personal Opinion, not fact! Examples Purchase Price Size of Pros/Cons (Double for Organization •Off the shelf – up to $1MImplementation) -Off the Shelf Peachtree, $300-1,000 Up to $1M Easy to learn and Quickbooks manage, limited controlsEntry Level FastFund, MIP $1,000-3,500 Up to $5M good controls,Modular more complex to learnModular Financial Edge, $8,000-25,000 $1M + Ability to GP, SL, MIP, ($2,500-5,000 per customize, good AccuFund module) controls, more complex to learnHighly PeopleSoft, SAP $50,000-250,000 Large, complex, HighlyCustomized Multi-location, customizable, $100M+ very expensive to manage, more complex to learn 17

Submit Requirements to Vendors• Request for Proposal • Overview of Organization • Outline specific requirements • Be specific with deadlines and due dates • Be specific with next steps, for vendors and for your organization

Decision Process• Remember that you are not just buying software. You are investing in the future of the organization, and there are lots of aspects to consider. • Training Costs • Maintenance • Reporting • Efficiencies and Return-On-Investment metrics• Make sure you are comfortable with all aspects of the options. • Vendor • Software and Hardware • Support• Think back to the strategic goals outlined in the

Decision Process• Price and Cost Considerations: • Think of one-time costs and recurring costs • Is there additional hardware that needs to be purchased? • Also consider the value of time saved from gaining efficiencies that you may have outlined in your goals and requirements • Is financing available for any part of the project?• Understand additional costs down the road • How much would an additional user cost later? • How much would an additional module cost later? • What kind of services would I need to implement another user or module down the road?

Data Conversion and Migration• Determine timing of data conversion – start of fiscal year, halfway point, after auditors finalize their work, etc.• Determine how much data is vitally necessary • How often would you or other users go back and look at a previous year’s worth of data? • What kinds of year-over-year comparative reporting do you need? • Could you leave the old software on a standalone computer for access to history?• Understand the timeline for data conversion• Understand the vendor/reseller’s levels of data

Data Conversion and Migration• Understand the quality of your current data • Clean up the current data as well as possible • Many times, the current data is inconsistent to the point that starting over with beginning balances makes the most sense.• Understand the structure of your current data • How are the tables arranged? • How would these tables be mapped to a new database? • Can exports be created simply and imported to build the new database, or would a conversion program need to be built to pull data from underlying tables?• This information will be necessary in discussions with the vendor/reseller in

Training• Staff MUST be trained on proper use of the system• Training is needed for end users upon Go-Live• Training will also be needed on an ongoing basis

Contact Information• Rebeka Mazzone, CPA Director – Rhode Island Region Accounting Management Solutions, Inc One Richmond Square, Suite 124C Providence, RI 02906 Phone: 401-374-3222 401-374- E-mail: rmazzone@amsolutions.net24

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Selecting Accounting Software for Your Nonprofit

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Selecting Accounting Software for Your Nonprofit — Presentation Transcript