Accounting is a vital part of your nonprofit organization. It’s important to know how much activities spend, how much they bring in, and how it relates to the overall mission. However, the numbers don’t really mean anything if they are wrong.
Nonprofit accounting mistakes can really hurt an organization. Below are the most common accounting mistakes we see nonprofits make:
Nonprofit Accounting Mistakes that Hurt Your Organization
Not Using Fund Accounting Software
Many nonprofits start out using Excel or another form of basic accounting software to keep track of their accounting. This can work for a little while; however as organizations grow accounting tactics tend to get more complex – much more so than Excel and smaller accounting solutions can handle.
Using a nonprofit-specific accounting solution, like Abila MIP or SerraFund for NetSuite, will provide more support for organizations as they grow. These platforms can help with budgeting, grant management, reporting and many other activities that are specific to nonprofit organizations – allowing you to focus on more the mission.
Improper Training/Setup of Nonprofit Software
Accounting software is meant to streamline and simplify the nonprofit accounting process. But if your solution isn’t tailored to your organization, you could be creating more work for you and your peers.
Take the time to set up your software for maximum efficiency. This will end up saving you time, money and energy in the long run. If you’re not sure how your software should be set up, you can schedule software training and have someone organize your solution appropriately for your needs.
At the same time, you could also schedule a training session and have the same company review how the software works, how data should be inputted, how to run reports, etc. This will give you (and the people using the software) a better understanding of what to do.
Not Having Accounting Documented Processes
Most organizations don’t have their software set up correctly because they don’t know their own accounting process or they don’t have a process to begin with. Not having a process or at least a documented process can cause a lot of confusion between staff and departments – which can greatly affect your accounting.
Take the time to create and/or review your accounting processes and procedures. This can shed light on broken business processes that can lead to better organization around the office, not just for accounting.
Tip: Create a one-page process document that employees can keep handy at their desk. This keeps everyone on the same page, and is easy to refer to quickly.
Data Entry Errors
Data entry errors can cause a variety of errors, especially when it comes time to run a report. A misplaced 0 can make a huge difference.
To prevent data entry errors from happening, it’s a good idea to double check each entry as you make it. Cross-check with bank statements as well, ensuring that data being pulled into your software is correct. Adding this to a one page process document will remind your staff to be more mindful of errors
Learn More About Nonprofit Accounting Software
Want to learn how nonprofit accounting software can improve your accounting efficiency? Abila MIP, DrillPoint Reports and SerraFund for NetSuite are just a few of the products we offer to help nonprofit and governmental organizations find accounting success. Contact us today to learn more: call 919-821-1244, email firstname.lastname@example.org, or fill out this form.
Not only do we offer accounting software, we also provide software training to help you and your team maximize the success of your software solution.