Shopping For Non Profit Software
Shopping For Non Profit Software
When one mentions accounting for non profit organizations, many people would assume that this is no different from the accounting system used by most companies and businesses. In truth, non profit accounting is much more complex than a commercial accounting system.
Although “non profit” usually denotes religious groups, non profit organizations could actually include health care services providers, colleges and universities, voluntary health and wellness organizations, and other organizations or groups such as civic organizations, political parties, museums, libraries and labor unions. The jurisdiction for the accounting system of non profit organizations are also divided into two – private sector whose GAAP is set by FASB and public sector whose GAAP is set by GASB.
One of the basic differences between the accounting system for a non profit organization and the commercial accounting system is the presence of net asset classes. There are three different net asset classes as well as revenue classification– restricted, temporarily restricted, and permanently restricted. The restrictions usually come from the donors themselves. Some non profit organizations classify their revenues as public support and revenue.
It is because of the abovementioned complexities that choosing a nonprofit accounting software can be a daunting task. Is there a short cut or a secret to finding the right software? Can’t you just pick out the first one that comes across your way?
When shopping for a non profit accounting software, one of the first things that you have to consider is the type of organization that you have. Do you expect to get funds from multiple sources? Do you need to record multiple entities as well as do cross transactions? Do you expect endowment income? Will your organization be giving out donations and contributions? Aside from this, you would also need to check whether most of your activities would include fund raising. If this is so, you might need to avail of a nonprofit fund accounting software. It is also advisable to check user-friendliness of the interface, the scalability and the presence of technical support.
Before you buy your chosen non profit accounting software, make sure that you have the needed hardware to support it. Check whether it is compatible with your computer’s existing OS. You would also need to have someone handle the use of the system.
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