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5 Signs Your Nonprofit Has Outgrown its Accounting Software

The key to running a successful organization is knowing when you need to evolve at every level. Sometimes that means looking for indications in broad context. Sometimes it means looking for more specific signs. Deciding when to upgrade your accounting software falls into the latter camp.

And upgrading your finance system is something you want to do as soon as those signs become apparent, because good financial management is key to meeting your goals. Good accounting software doesn’t just help you work, it’s the heart of your organization’s efficiency and efficacy. It’s one of the best tools you can have in your organization’s kit, and better tools at your disposal deliver better results.

So what signs should you watch for to know it’s time for an upgrade? Here are five key signs and what they look like:

1. You’re using multiple systems and solutions

Multiple siloed or compartmentalized software is often a sign that it’s time to change to more widely accessible, networked software. That presents in the following ways:

  • Information gets missed because of inefficiencies stemming from no integration or poor integration
  • Different systems show different or varying results
  • Data access and security issues arise from permissions issues and confusion over who can access what in each system
  • Lost time moving information between systems and exporting data to combine in Excel or other spreadsheet software

2. You can’t get information you need and don’t trust what you get

Data access and accuracy are imperative when compiling and tracking financial information. If your departments aren’t communicating through centralized financial management software, you’re getting an incomplete picture. You can tell that’s the case if:

  • It takes a long time to pull reports, and/or you’re not sure if the information at the end is accurate because what you’re getting from multiple departments doesn’t line up
  • Inadequate reporting makes it hard to give funders the information they need, or track client outcomes
  • You’re finding it hard to make data-supported decisions

3. You’re using complicated workarounds for common processes

If you’re constantly requiring your software to do things it isn’t built to do, it’s costing you time you’re not getting back. And the true cost of all that lost time is wasted operating funds and a reduction of time you could have spent helping clients. Here’s what that wasted time looks like:

  • Tasks that should take minutes take hours instead, leading to widespread inefficiencies and slowdown
  • Time spent researching solutions and tools for requirements your current system doesn’t have or can’t imitate
  • Time spent manually creating those alternate processes or functions

4. You spend a lot of time re-entering data

By having siloed, non-networked systems, you set yourself up to spend a lot of time manually re-entering data. You need a system that’s fully integrated so you can enter data once and have it automatically accessible to everyone who needs it. Departments not communicating well looks like this:

  • You export data from one system to another manually, or have dual (or more!) entry requirements
  • You deal with ongoing errors because of duplicated data entry
  • Data needs to get manually corrected in all departments because corrections can’t automatically update across your network

5. Not everyone has the right level of access

Access imbalance usually looks like people who need it not having information, but it can also present as the wrong people having too much or too broad access. Correcting that imbalance requires understanding what access stratification needs to look like for your org specifically. So here’s what to look for:

  • Some people need information they can’t get – like managers who aren’t able to track budgets or vacation allowances
  • Other people have access they shouldn’t – like IT having admin access to HR systems
  • Different departments are telling you they need tailored access your uniform system can’t provide

Ultimately, your accounting software has to be right for your org’s needs. Uniform or off the shelf solutions don’t cut it because they don’t get you the functionality and level of communication you require. You deserve technology built for you. A roles-based cloud system with employee and manager self-service is ideal for nonprofits because it means everyone has the information they need at their fingertips, and also helps you prevent privacy and security issues by restricting access to the right roles.

At Sparkrock we specialize in those tailored software solutions. Want to find out more? Connect with us today to inquire about purpose-built accounting software to help evolve your organization.

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