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Let's face it, everyone wants to know where their money is going, but nobody wants to keep track of where it went. In the non-profit world, the focus of an organization is not on how much money was made. However, that does not diminish the importance of having a good system that accurately tracks the organization's money. An effective accounting software package can help make monitoring finances less cumbersome and help save money at the same time. You can also look at how accounting software save time and money towards implementation of money management techniques with selecting an accounting software based on your needs.
As with any major purchase, there are many factors that should be addressed before making a decision on which new accounting software package to buy, or whether to buy at all. The following list is by no means all inclusive, but should give you some idea of what to look for when evaluating your options.
Organizational Needs
Let's face it, everyone wants to know where their money is going, but nobody wants to keep track of where it went. In the non-profit world, the focus of an organization is not on how much money was made. However, that does not diminish the importance of having a good system that accurately tracks the organization's money. An effective accounting software package can help make monitoring finances less cumbersome and help save money at the same time. You can also look at how accounting software save time and money towards implementation of money management techniques with selecting an accounting software based on your needs.
As with any major purchase, there are many factors that should be addressed before making a decision on which new accounting software package to buy, or whether to buy at all. The following list is by no means all inclusive, but should give you some idea of what to look for when evaluating your options.
Organizational Needs
Probably
the most important step in determining the kind of software needed is
to make a list of what your organization requires from an accounting
software package. While this will be comprised primarily of the
accounting functions your organization performs on a regular basis
(i.e., allocations, fund-raising, billing, payroll), it will also
include compliance with current accounting standards, grantor (somebody
making legal transfer) and/or government reporting requirements and
internal reporting requirements. A good accounting package will be
capable of meeting all of your reporting requirements and adhering to
current accounting standards without forcing too much re-creation of
data. It is not a bad idea to study about free accounting software package which will be able to work for your business case where you need to have simple accounting and reporting system. You can also refer to how to find the right accounting software and how to evaluate accounting software after analysing your organizational needs.
User Friendliness
User Friendliness
With
most accounting software developers now providing (or soon to be
providing) Windows-based packages, there is a marked increase in the
"user friendliness" of these packages. This is where some of the
potential for long-term savings lies. Not only are Windows packages
generally easier to use, but they also allow for multitasking and often
have vastly improved help functions (many provide the entire software
manual at the click of a mouse button). If this allows four of your
staff members, who earn twelve dollars an hour, to save fifteen minutes a
day for an entire year, you will pay for your $3,000 accounting system
in a year with just your payroll savings.
Haredware Requirements
Haredware Requirements
While
the development of Windows accounting packages has increased "user
friendliness," it has also increased the need for more advanced and
powerful hardware. Knowing your current hardware limitations is
essential in evaluating any software purchase, especially accounting
software. It is imperative that you know that your hardware has the
adequate memory, hard drive space and processing speed to accommodate
the software before purchasing it. Without checking this information
first, you could end up with a far worse situation than the cumbersome
accounting system you were intending to improve.
Flexibility
Flexibility
As
with any software package, flexibility is an important consideration.
Non-profit accounting can be extremely complex and dynamic. There are
frequently new grants and projects which may have different reporting
requirements and there are always new accounting pronouncements, making
flexibility vital. Many packages offer reporting that can be virtually
tailor-made to your needs. Others offer versions of their product in
which the actual programming code can be accessed and altered to suit
the organizations needs. If you use other non-profit software indirectly
related to the accounting function (i.e., fundraising or membership),
many packages can be adapted to interface with those systems.
Price
Price
You
didn't think that an accountant would overlook this important
consideration, did you? Of course we all have limits on what we can
spend, but more important is the value we get for what we do spend.
Beware of the hidden costs that can be associated with a new software
purchase. Make sure you know which modules (i.e., accounts payable,
accounts receivable) are included with the general ledger software, and
the cost of any additional modules you may need. Many systems start with
the bare bones, which is rarely enough, and charge additional fees for
what many of us would consider basic needs. Also, find out how much
technical support you'll receive with the software and how much
additional support will cost. Many software companies offer free support
for a period after the purchase, but will charge fees for support of
additional modules. Be aware that some developers may require payment
for mandatory periodic upgrades and maintenance fees, and virtually all
software developers will charge additional fees for multiple users.
After you consider these factors, it is a good idea to ask potential vendors for product demonstrations. Demonstrations help to provide a better understanding of the products and may inform you of beneficial features that you had not considered. An accounting firm regularly providing demonstrations and independent from one particular software vendor, such as Raffa and Associates, provides the added advantage of an objective demonstration and comparison of several software packages viewed by the firm as the most effective software for your situation.
This should get you started on your not-too-envious task of finding the right accounting software package. As difficult as it may seem, focusing on the above factors and developing a plan for the selection process should make the task less daunting and more effective.
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After you consider these factors, it is a good idea to ask potential vendors for product demonstrations. Demonstrations help to provide a better understanding of the products and may inform you of beneficial features that you had not considered. An accounting firm regularly providing demonstrations and independent from one particular software vendor, such as Raffa and Associates, provides the added advantage of an objective demonstration and comparison of several software packages viewed by the firm as the most effective software for your situation.
This should get you started on your not-too-envious task of finding the right accounting software package. As difficult as it may seem, focusing on the above factors and developing a plan for the selection process should make the task less daunting and more effective.
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