Nonprofits often struggle with tracking donations, cash flow, expenses, and restrictions. After the industry-wide disruptions of the COVID-19 pandemic, it’s more important than ever for organizations to adapt and effectively manage their financials. We’ve compiled a list of common financial challenges nonprofits face and how leading financial software like Sage Intacct can overcome them.
1. Tracking donor restrictions
With multiple funding sources and contributions with varying restrictions, managing funds is a constant challenge. When contributions are restricted and designated for a specific program, your organization must track them to the correct program. And, you need to know when funds become unrestricted so you can put those funds toward other programs.
Sage Intacct’s cloud technology simplifies fund management by tracking fund restrictions and release dates. You can tag grants to specific programs and build reports that show fund and program usage in real-time. With financial insights like these at your fingertips, you can improve your planning.
2. Managing accounts receivable
Knowing the status of your accounts receivable (AR) is key to managing your cash flow. Many nonprofits struggle to understand the true status of their AR. Do you know the average time it takes for your customers to pay bills? Do you know the outstanding amount? How are your receivables aging? Have you missed invoicing any customers? It’s best to manage your accounts receivable consistently and regularly.
Sage Intacct helps by automating invoices and reminders, allowing you to request payment sooner and follow up on unpaid bills with minimal effort. Its reporting features give instant, real-time access to how much money is outstanding and the ability to forecast when payments will arrive. With automation and documentation, you can better manage your AR and deploy strategies to get paid faster, improving your cash flow.
3. Integrating donor databases and financial systems
When a donor makes a contribution, you want this information in your finance system and donor database. If these systems don’t integrate, your staff is tasked with duplicate data entry or data imports/exports. Manual data entry is tedious, time-consuming, and presents an opportunity for errors.
Sage Intacct was built to talk with your key business systems via two-way, system-to-system communication. You can build a custom connection between your existing donor database or choose a solution with a pre-built connection in Sage Intacct’s marketplace. Connecting these solutions reduces data entry, gives you greater financial insights into your donor database, and positions you to increase and reward donor engagement.
4. Allocating functional expenses
When you purchase a functional expense (like a printer), how do you allocate the cost of that item across departments? Programs? How do you allocate staff members’ time? When do you allocate functional expenses? If you wait until the end of the year, it may be a challenging, lengthy project. Accurately tracking functional expenses is essential to understanding how various resources support your organization and impact program success.
Sage Intacct categorizes these expenses by department and program as needed. And, with time entry tools, staff can allocate time to specific programs, activities, work, etc. You’ll track expenses with more control, simplify reporting, and eliminate the need to allocate costs at year-end.
5. Reporting federal funds
Tracking federal grants is a critical task and comes with its own set of challenges. Many federal grants are issued on a reimbursement basis, and your team must track how much they receive and spend. Plus, your organization needs to know when to bill the funder.
With a cloud-based solution, you can record your federal grants in a centralized database and use dimensions to tag financial transactions to the grant or funder. Spend less time tracking your grant usage and more time securing additional funds!
If you’re tired of dealing with these financial setbacks, it’s time to explore Sage Intacct! The best-in-class financial software is known for its comprehensive grant tracking and billing, revenue recognition, audit trails, dynamic reporting, and more! You’ll benefit from financial insights, time savings, and efficiency. And, your team will shift their focus from administrative work to impacting the success of your mission.
Wondering how Sage Intacct can vanquish your financial challenges? Let’s talk!
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