For most nonprofit organizations when it comes to finance, the focus has traditionally been to minimize overhead costs. Unfortunately, the area that suffers the most is investment in systems. Debits and credits used to be the only focus, but now most nonprofits have corporate cards, shifting the conversations to expense management. This becomes a barrier for nonprofits as they often have more complete reporting needs.
These organizations face unique challenges when it comes to expense management:
- Finding a system that addresses their pain points and provides visibility and control into spend
- Managing the manual process of reconciling credit card transactions
- Removing workflow bottlenecks with multiple approval layers
Whether it’s an association, foundation, charity, or youth organization, nonprofits exist to improve the quality of life for their constituents. So, what can we do to help them get their “Return on Mission (ROM)?”
First, it’s important to choose an accounting system that can accurately handle contributions from donors, grants, investments, and fundraising events, and produce reports that make submitting IRS Form 990 and other tax reporting easier. Most accounting software systems were not designed with the nonprofit in mind.
For example, the competition for funding has intensified over the years. Grantors now want to focus their support on nonprofits with the highest ROM and lowest overhead costs to demonstrate good stewardship and how their grant was consumed. With a modern accounting software solution, such as Intacct, the dimensional chart of accounts allows nonprofits to track revenues and expenses per grant with minimum effort. Additionally, easily configurable dashboards facilitate reporting to grantors and overall decision-making.
Next, choose an expense report software that easily integrates with your accounting system. Implementing the right expense management solution can be simple and efficient, and will save time and money, both which will go back into the organization to be used to further your motives. A fully automated expense report process can be configured to meet the nonprofit’s needs, add multiple approval layers to remove a backlog of reports, and integrate credit card data, saving the accounting team hours of data entry.
Expense management is no less important in the nonprofit sector, they just face unique challenges. But if we let systems do the hard work, we can get the best ROM.
To learn more about managing expenses for your nonprofit organization, join our 30-minute webinar on Tuesday, June 27 at 11AM PDT. If you missed it, watch the on-demand version. For more information on accounting systems and automating expense reports, contact The Resource Group by visiting www.erp4nonprofits.com or Nexonia at www.nexonia.com.