This is the third post in our blog series: Best Practices for Selecting Nonprofit Accounting Software
Once your nonprofit accounting software requirements are documented and prioritized, the search begins for the right software and implementation vendor – or, as we like to call it, a partner.
The internet makes it easy to build an initial list of candidates. Some websites even allow you to enter accounting software search criteria to generate a list of candidates but may put you on an email/call list. So, what's the best way to find a vendor and do you really need a partner instead?
Two Types of Choices for Selecting Your Partner
Accounting software can be sold direct by the software vendor's sales team or also through value-added resellers (VARs) sometimes referred to as a partner channel. You're not just shopping for software, you're shopping for a solution that best fits your nonprofit's unique requirements.
Nonprofit Accounting Software – Vendor Direct Sales
When you purchase directly from a software vendor, the process is often that you are put into queue to have your software implemented by their service team. Often, it is done remotely. The requirements gathered during the evaluation process are shared with that team and they begin to implement to specifications. This sometimes works very well, but it can also backfire as that team was not involved from the beginning and information may not transfer completely.
Nonprofit Accounting Software – VAR or Partner Channel
Many software vendors have a VAR or partner channel. These companies implement, service, support and train customers on nonprofit accounting software they are researching. The partner will help with the evaluation process, specifications documentation and provide a statement of work which may or may not include customizations. The partners often represent multiple accounting software vendors, giving you more choices to find the best fit. If they only represent one vendor, just be careful that they really are a good fit instead of trying to fit a square peg in a round hole.
Partner vs. Vendor
Vendor sales reps are motivated to close sales quickly, which encourages moving on to their next sale as soon as possible. They may throw your project over the wall to their implementation team who will also want to implement your system as soon as possible so they can move onto the next one. A good partner will serve you for the entire lifecycle of the system. A partner may charge a bit more than a vendor but the value of the solution often pays for itself within the first 12-18 months.
The Qualifying Process
Now that you're armed with a vendor scoring model that comes out of the requirements documentation process, it's time to apply it to the nonprofit accounting software vendors and partners that you identify during your initial search. The next step is to compare them based on functional areas, which include some combination of the following:
- Core financials: general ledger (GL), AP, AR, purchasing, fixed assets, treasury/bank reconciliation, reporting, etc.
- Funds, programs, grant, and project accounting (to track the profitability of each)
- Inventory and warehouse management (if you sell products or merchandise)
- Customer relationship management (CRM)
At this point, it's wise to start reaching out to 3-5 companies because trying to compare more than that can be overwhelming. It's also unlikely that you'll find much on pricing online. Based on their feedback and ballpark quotes, your initial comparison will probably lead you to detailed proposals from your final 2-3 candidates.
"H-E-L-P" Is Not a Dirty Word
If this process seems daunting and your team is "too busy" to do it, it may be in your best interest to hire a nonprofit technology consultant. Though this will be a paid engagement, consultants can help take the pain out of selecting the wrong accounting software.
If you hire a nonprofit technology consultant, make sure they:
- Have a background in your industry
- Demonstrate familiarity with different nonprofit accounting software packages
- Have a software selection methodology specifically for nonprofit accounting
- Are good at interviewing stakeholders and executive leaders in order to document requirements
- Have a lot of experience facilitating accounting software selection and implementation
- Are vendor agnostic with no vested interest in one solution over another
Good nonprofit technology consultants want happy clients because they rely on referrals and strong references for their business.
At the end of this part of the accounting software selection process, you will have identified whether a vendor or partner offers more value for you and whether or not engaging an experienced consultant makes sense. Our next blog will focus on how to effectively compare vendor proposals to create a short list of nonprofit accounting software candidates.