How to choose the best Accounting Software for Nonprofits + Top Nonprofit Accounting Software for 2025

Erin Booker

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December 18, 2024

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10 minutes

Nonprofit Trends

How To Nonprofit

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Nonprofit work is more than just soul-fulfilling work like community-building programs, heart-warming success stories, and world-changing missions. It's boring stuff like operations and payroll and accounting—which means your accounting software needs to hit the mark, not just with numbers, but with solutions tailored to the nonprofitsphere. Because nonprofits have unique challenges around budgeting and compliance, it's crucial to pick software that aligns with your goals.

If choosing a financial management platform sounds overwhelming (or incredibly boring), read on! We're breaking down what to look for in nonprofit accounting software, highlighting the must-have features that can boost your operational efficiency, and sharing our picks for 2025.

A Summary: Nonprofit Accounting

Nonprofit accounting requires specialized tools for fund accounting, restricted funds management, and compliance with unique financial reporting standards mandated by the government. Key focus areas include tracking diverse revenue streams, managing program-specific expenses, and preparing Form 990s. Accurate financial stewardship is crucial for nonprofits to maintain both their tax-exempt status and their donors' trust.

Read on for nonprofit accounting strategies and tips that you need to make the most of your accounting software.

Tracking revenue by funds

Otherwise known as Fund Accounting—and we know Fund Accounting is the foundation of nonprofit financial management. It's pretty simple; Fund Accounting is accounting for funds. Where did they come from, where are they going, and what are the secret details that need to be brought into the light.

Compliance and regulations

Funraise partner Harbor Compliance is a powerhouse when it comes to keeping nonprofits in line with the rules and regs and hoops that charitable organizations have to jump through. Here's what they had to say about online fundraising compliance:

The reality is that organizations that fundraise online have solicitation activity that reaches residents in multiple states, if not nationwide. Every state's forms, fees, deadlines, charitable solicitation registration, and information required when applying differ. Yes, charitable solicitation laws are complex, yet organizations have a general obligation to comply.

Internal controls

The checks and balances that nonprofits need to ensure that every donation is recorded accurately and consistently.

Financial statements

A feast for your board! Seeing how your organization is doing financially will get your board talking about how to capitalize on those wins and pivot from the not-so-wins. (And hopefully, they'll listen to the ED and fundraising team!)

Donor restrictions

Donor restrictions play a crucial role in nonprofit accounting by determining how funds can be used and how they're classified on financial statements.

Grant and pledge management

The management of specialized funds coming in and going out is a key—and necessary—piece of the nonprofit accounting pie.

Allocations

The opposite of Fund Accounting! Fund Accounting is where the money comes from; allocations is all about where it's going and how it's being spent.

Transparency

The difference between a great nonprofit and an awesome nonprofit. When you have nothing to hide, transparency is child's play.

Why prioritize proper accounting practices at your nonprofit

You're not the only one asking! Justin Wheeler, Funraise CEO and Co-founder recently asked the same thing of Jason Kruger, nonprofit accounting expert, on the Nonstop Nonprofit podcast. Here's how Jason answered Justin's crucial question, "Why should accounting be prioritized by nonprofits?"

"The foundation of how how a nonprofit operates and how a nonprofit evaluates itself throughout the year is based on the budget that they set. And so as organizations grow, that becomes more and more critical, because... [the board] makes decisions... based off that budget. And so if you don't have a grasp of what your budget is, then you start making decisions that are impacting the success of the overall organization.

[For example] ...If an organization is just saying, well, we did $10 million last year, so we're going to add 10% this year without any underlying data as to the why behind it, then you could be setting yourself up for some challenging times.

The other piece that's really important for the executive team is ...the requirement for ...audited financial statements [as a nonprofit grows]. That can be very challenging process if you don't have good solid financial information with the appropriate supporting documentation."

Strategic planning

Long-term strategic plans are crucial to sustainable nonprofit growth. And clean, clear financial records are key to making a doable, workable strategic plan.

Decision-making

Sounds common sense, but humor us: How are nonprofit boards and staff supposed to make great decisions for the organization, constituents, and mission if they're in the dark when it comes to the nonprofit's finances?

Donor stewardship

Donors love love L♡VE being let in on how an organization is doing financially and how their donation is making an impact in the community. Not only that, but how can you plan sparkling swag and stewardship events if you don't know what the ROI will be on your fundraising efforts?

Accountability

Accountability is a major Why when it comes to nonprofit accounting—think about all the times you've had to bust that tired Overhead Myth. If you can show every move you make, everything falls into place.

Legal compliance

What do you do when the IRS comes knocking and you don't have complete financial records? Combust into flames and rocketship into space, that's what. How do you not spontaneously combust? Keep solid records, that's how.

Budgeting

Similar to planning, budgeting just can't happen without a... budget. Or financial statements. Or intelligent reports.

How is nonprofit accounting different from for-profit accounting?

Nonprofit accounting focuses on accountability and mission fulfillment rather than profitability. Key differences include fund accounting for restricted donations, unique financial statements like the statement of activities, and specialized tax reporting. Nonprofits must track program-specific expenses and demonstrate proper use of funds to maintain donor trust and tax-exempt status.

Key features of top accounting software for nonprofits

Fund Accounting

This is essential for expense tracking income and expenses tied to specific funds. It ensures you can allocate and report on restricted funds, like grants, accurately.

Donation management

A solid donation tracking feature is a must. Your software should help you manage and report donations seamlessly to keep your financial health in check.

Automation tools

Look for automation capabilities to handle routine tasks like transaction recording and financial report generation. This not only saves time but also minimizes errors.

Security features

Protecting your and your donors' sensitive financial data is non-negotiable. Opt for software with robust security measures, such as data encryption and secure access controls. The importance of data for nonprofits cannot be overstated.

System integration

Choose software that can integrate with your current systems, like online fundraising, donor management, and volunteer tracking. This enhances overall efficiency and keeps everything connected.

Top 10 Accounting Systems for Nonprofits

When it comes to specialty software, the big question is whether you should purchase a purpose-built platform or use a more general big-box system and customize it for your needs. Only you can answer the question for your nonprofit, and you do that by identifying and prioritizing your organization's and your donors' needs.

QuickBooks Online for Nonprofits
Daxko Accounting
Accounts by Software4Nonprofits
MIP Fund Accounting
Denali Accounting
FundEZ
AccuFund
MoneyMinder
Blackbaud Financial Edge
OneNFP Financials

QuickBooks Online for Nonprofits: Top tech for tailored charitable financial management solutions

QuickBooks: Top Nonprofit Accounting Software

If you’re looking for a popular and versatile choice, QuickBooks Online Plus is a top pick for nonprofits. It provides handy specialized features like fund tracking by location and class, which makes it easy for nonprofits to manage different activities. And for larger organizations, QuickBooks Enterprise Nonprofit offers specialized tools and a customizable chart of accounts.

What’s more? With Funraise's QuickBooks integration, you can make the most of your online fundraising.

Automated data entry: Donations from Funraise import transactions directly into QuickBooks, cutting down on manual entry and errors.
Real-time financial insights: Keep tabs on incoming donations instantly, providing immediate visibility over cash flow and funding.
Smart reporting: Easily align your fundraising efforts with financial performance, making decision-making a breeze.
Effortless donor management: Sync donor info between Funraise and QuickBooks to maintain accurate records and solidify relationships.

QuickBooks Online services

QuickBooks Live Expert Tax help
Bookkeeping automation
Capture and organize receipts
Mileage tracking
Invoicing
Reporting
Manage 1099 contractors
E-commerce and inventory
Multi-currency transactions
Track program profitability
Auto-track fixed assets
Financial planning
24/7 support and on-demand training

Nonprofit discount and assistance on QuickBooks Online from TechSoup

If you're looking for a discount on QuickBooks Online (and what nonprofit isn't?), try TechSoup's discounted nonprofit technology products. You may find everything you dreamed of and more.

Daxko Accounting: Best financial management for community nonprofits

Daxko: Top Nonprofit Accounting Software

If you haven't looked at your current tech stack for accounting assistance, now's the time to dig in. Even if your CRM or ESP or BLT (yum!) doesn't offer an accounting system, they may have integrations or suggestions.

In the case of Daxko, though, there's a financial management system baked in: Daxko Accounting Software for Nonprofits. Daxko's accounting suite delivers simplified, integrated accounting, customized reporting, and best-in-class accounting security—all special features that are essential to charitable organizations.

Daxko's integration with Funraise seamlessly connects Funraise's front-end fundraising tools with Daxko Operations, offering essential tools.

Create donation appeals with ease
Build annual appeal campaign sites that inspire donors
Grow and sustain recurring gifts
Monitor performance with data dashboards and custom reports
Manage multiple nonprofits under one roof

Now, we know what you're asking: "Is Funraise data synced with Daxko Accounting?" And the answer is, sadly, no, Funraise data is only synced with Daxko Operations. But Daxko is always working on the integration, so we encourage you to talk to them about your integration needs.

Daxko Accounting services

Financial planning
Integrated accounting
Staff solutions
Customizable reporting
Forecasting and budgeting
Accounts receivable

Accounts by Software4Nonprofits: Best tech for small nonprofits with basic accounting needs

Software4Nonprofits: Top Nonprofit Accounting Software

With special features tailored specifically for nonprofits, including nonprofit fund accounting and donor management, Accounts by Software4Nonprofits helps you keep your financial ducks in a row. It's affordable and user-friendly, making it a hit with smaller nonprofits who have basic accounting tasks. However, like trying to fit a square peg into a round hole, Accounts might struggle with more complex accounting needs of larger organizations.

Accounts by Software4Nonprofits services

Nonprofit Fund accounting
Custom chart of accounts
Create and track budgets
Generate nonprofit financial statements
Unlimited technical support

MIP Fund Accounting: Top all-in-one solution financial software for nonprofits

MIP Fund Accounting is a robust, versatile financial software built for nonprofits, and it can handle just about anything you throw at it—short of actually filing your 990 for you (sorry, you're on your own for that one). With its powerful reporting capabilities and ability to segment accounts six ways to Sunday, MIP is a favorite among larger nonprofits and those with complex financial structures.

MIP Fund Accounting services

General ledger
Accounts payable/receivable
Bank reconciliation
Budget management
Grants administration
Data import/export
Electronic Funds Transfer
Reports manager

Denali Accounting: Best accounting software for growing nonprofits

Denali: Top Nonprofit Accounting Software

Designed specifically for nonprofits, and offering robust features like nonprofit fund accounting, grant tracking, and GAAP compliance, Denali Accounting's strengths lie in its robust reporting capabilities, fraud prevention through audit trails, and scalability for growing organizations. Denali is ideal for small to mid-sized nonprofits looking for a comprehensive core accounting solution that can grow with them.

Denali services

General ledger
Accounts payable
Accounts receivable
Reporting

FundEZ: Most complete nonprofit accounting technology + training combo

FundEZ: Top Nonprofit Accounting Software

FundEZ lives up to its name by making nonprofit accounting, well, easy. It's tailored for small to mid-sized organizations and offers strong budgeting capabilities and allocation features.

FundEZ shines in its ability to track multiple grants and projects across fiscal years, which is as handy as finding an extra dollar in your pocket on laundry day. The customizable user interface is a plus, making FundEZ a solid choice for nonprofits that need robust budgeting tools without overwhelming complexity.

FundEZ services

Fundraising accounting
General ledger
Bank reconciliation
Budget tracking
Dashboards
Accounts payable/receivable
Purchase orders
Direct and indirect allocations
Batch processing
Security

AccuFund: Most comprehensive financial management solution for nonprofit organizations

AccuFund: Top Nonprofit Accounting Software

With a comprehensive suite of tools that can be tailored to your organization's needs, AccuFund is one of the strongest options for nonprofit accounting software on the market.

Its core accounting system is strong, and the ability to add modules as needed makes it flexible for various nonprofit sizes and types. AccuFund's user-friendly interface and extensive reporting capabilities are definite strengths. It's particularly well-suited for nonprofits that need a scalable core accounting solution with strong financial reporting and grant management capabilities.

AccuFund services

Accounts payable
Bank reconciliation
Cash receipts
Dashboards
Financial reporting
General ledger
General ledger allocation

MoneyMinder: Best accounting and bookkeeping for volunteer-run nonprofits

MoneyMinder: Top Nonprofit Accounting Software

MoneyMinder is the friendly neighborhood superhero of nonprofit accounting software, designed specifically for volunteer-run organizations. It strikes a balance between the complexity of full-fledged accounting software and the simplicity (and risks) of spreadsheets.

MoneyMinder's strengths lie in its user-friendly interface, member tracking capabilities, and integrated online payment options. However, it may lack some of the more advanced special features larger nonprofits require. It's the perfect fit for small, volunteer-led nonprofits that need straightforward bookkeeping services and reporting without the accounting degree.

MoneyMinder services

Accounting
Bookkeeping
Bank registers
Budgeting
Chart of accounts
Document storage
Integrations & Imports
Reconciliation
Reporting & Analytics
Statements & Letters
Tax forms

Blackbaud Financial Edge: Easiest accounting software for Blackbaud users

Financial Edge: Top Nonprofit Accounting Software

Blackbaud Financial Edge is the heavyweight champion of nonprofit accounting software, designed for large organizations with complex needs. Its strengths include robust nonprofit fund accounting, budget tracking, and seamless integration with other Blackbaud products like Raiser's Edge. This integration is so smooth, it's like peanut butter and jelly decided to become accounting software. However, its complexity and cost can be overwhelming for smaller nonprofits. Blackbaud Financial Edge is best suited for large nonprofits that need enterprise-level financial management and can leverage its full suite of integrated nonprofit solutions.

For even easier control over data, try Funraise's integration with Raiser's Edge and Raiser's Edge NXT. Here's what you can do with Funraise and Raiser's Edge:

Send lots of Funraise data to Raiser’s Edge
Use Funraise to collect online donations and run P2P campaigns
Handle Funraise online donation management and donor data in Raiser’s Edge

Financial Edge services

Fund accounting
Automated bank and credit card reconciliation
Automated budget and detailed report creation
Expense submission
View-only licenses
Create and manage budgets
Restricted funds
Audit trails
Advanced security

OneNFP Financials: Microsoft-based financial management

OneNFP: Top Nonprofit Accounting Software

OneNFP Financials App, built on Microsoft Dynamics NAV, is a comprehensive solution tailored for nonprofits. It streamlines various financial processes, making life easier for both program managers and accounting teams.

For nonprofit staff, this means:

Easy expense reimbursement and time allocation
Simplified approval processes
Up-to-date budget monitoring
Seamless access to financial data without accounting expertise

The accounting team benefits from:

Reduced data entry and improved accuracy
Ability to share KPIs and specialized reports across the organization
Real-time data validation

OneNFP Financials App bridges the gap between program management and accounting, offering a unified platform for financial oversight and advanced reporting within the familiar Office 365 environment. It's designed to enhance efficiency and accuracy in nonprofit financial management.

OneNFP Financials services

Time and expense entry
Approval processing
Real-time reporting and transaction tracking
Direct integration with Microsoft Dynamics NAV
User-friendly interface within Office 365

Accounting software that nonprofits love

If none of the purpose-built accounting systems on the market fit the bill, expand your search into more general accounting SaaS products. These are top-notch accounting systems that are built for general for-profit use, but many nonprofits find them to be useful.

Xero
Zoho Books
FreshBooks
FINSYNC
Wave
NetSuite

Xero: Flexible and scalable accounting option for growing organizations

Xero: Top Accounting Software for Nonprofits

Xero is a cloud-based platform perfect for growing nonprofits. Its customizable financial reporting enhances planning and strategy, with additional tools to compare actual reports to scenarios. Xero offers cash management, donation tracking, and multi-entity options. Integrations with over 1,000 third-party apps, such as Infoodle and Gusto, boosts Xero's functionality. Xero is scalable and user-friendly for nonprofits with specific needs.

Xero services

Payments
Online invoicing
Bank reconciliation
Expense management
Bill pay
Purchase orders
Reporting & Analytics
Inventory
Multi-currency accounting
Sales tax
Online file storage
Accounting dashboards
Fixed asset management

Zoho Books: Cost-effective accounting tool with automation

Zoho Books: Top Accounting Software for Nonprofits

Zoho Books emerges as a user-friendly solution for nonprofits in need of accounting software. Its strengths lie in its intuitive interface, comprehensive financial overview, and effortless fund management capabilities.

Zoho Books excels in tracking restricted funds, managing grants and donations, and generating customizable financial reports. It also simplifies project management and allows for multi-currency donations, making it as versatile as a Swiss Army knife for nonprofit finances. However, larger organizations with complex financial structures might find its features somewhat limiting compared to more robust enterprise solutions.

Zoho Books services

Books
Billing
Expense
Inventory
Invoice
Checkout
Payroll
Commerce
Practice

FreshBooks: All-in-one billing, payroll, and accounting software

FreshBooks: Top Accounting Software for Nonprofits

FreshBooks is the charming overachiever of the nonprofit accounting world. Its user-friendly interface and intuitive features make accounting tasks a breeze, even for those who think "balance sheet" is a yoga pose.

With time-tracking tools and customizable invoices, FreshBooks helps you manage your nonprofit's finances without breaking a sweat. However, larger organizations with complex financial needs may find it limiting.

FreshBooks services

Accounting
Expenses & Receipts
Reports
Mileage tracking app
Bookkeeping
Invoicing
Payments

FINSYNC: Cloud accounting solution

FINSYNC: Top Accounting Software for Nonprofits

FINSYNC positions itself as an all-in-one intuitive software for nonprofits, focusing on simplifying accounting, payments, invoices, and payroll. Its strengths include automated payroll processes, real-time cash flow management, and the ability to invoice donors and sustainers efficiently.

While FINSYNC offers a comprehensive suite of tools, it may lack some of the nonprofit-specific special features found in software designed exclusively for the sector, such as detailed fund accounting or grant tracking capabilities.

FINSYNC services

Payments
Cash flow management
Payroll
Accounting
Bookkeeping

Wave: Free accounting solution for budget-conscious organizations

Wave: Top Accounting Software for Nonprofits

Wave is a top choice for small to mid-sized nonprofits with budget concerns. It offers essential features like income and expense tracking and invoicing at no cost. Automatic bank transfer uploads keep financial data current and reduce errors. Wave supports donation tracking and allows receipt scanning for easier expense management. Wave provides comprehensive tools that support financial health without the added cost.

Wave services

Invoicing
Payments
Mobile receipts
Accounting
Estimates
Payroll

NetSuite: Advanced financial management software suite

NetSuite: Top Accounting Software for Nonprofits

NetSuite stands out as a comprehensive cloud accounting solution. Its strengths include specialized modules for grant accounting, program-efficiency tracking, and automated generation of key FASB reports.

NetSuite's integration with its ERP system allows for improved internal controls and automated prevent-and-detect mechanisms. However, its cost and complexity might be prohibitive for organizations with limited resources or technical expertise.

NetSuite services

General ledger
Cash management
Accounts payable/receivable
Account reconciliation
Tax management
Close management
Fixed assets management
Payment management

Best practices for nonprofit accounting software

Nonprofit-specific accounting software offers nonprofits flexibility and accessibility. Keeping best practices in mind allows nonprofit accounts and financial professionals to maximize the benefits of your purpose-built tech solution.

1. Choose the Right Accounting Software Suite

Selecting the appropriate accounting software is crucial for nonprofits. Look for solutions that offer nonprofit-specific features like fund accounting, donor tracking, and customizable reporting.

Benefits of choosing the right accounting software:

Improved financial transparency and compliance
Enhanced donor management and fundraising capabilities
Streamlined reporting for stakeholders and regulators

2. Train Your Team

Proper training ensures your staff can fully utilize the software's features. Invest in comprehensive training programs to maximize the return on your software investment. Even better, think carefully about the level of support your accounting software options offer before committing to a tech solution.

Benefits of training:

Increased efficiency in financial processes
Reduced errors and data entry mistakes
Empowered staff who can leverage advanced features

3. Leverage Automation

Automation is a game-changer for nonprofit accounting. Implement automated processes for tasks like bank reconciliation, accounts payable, and spend management.

Benefits of automating accounting:

Time savings on routine tasks
Improved accuracy in financial reporting
Real-time insights into financial health

4. Keep Your Data Secure

Data security is paramount in nonprofit accounting. Implement robust security measures to protect sensitive financial information and donor data.

Benefits of data security measures:

Enhanced donor trust and confidence
Compliance with data protection regulations
Reduced risk of financial fraud or data breaches

5. Integrate with Your Other Systems

Seamless integration between your accounting software and other systems is crucial. Look for solutions that can connect with your customer relationship management tool, fundraising platform for nonprofits, and other powerful tools, and remember, the right accounting software is versatile, reliable, and indispensable when you need it most.

Benefits of integrating your accounting software with the rest of your tech stack:

Improved data flow and accuracy across systems
Enhanced reporting capabilities
Streamlined operations and reduced manual data entry

6. Regularly review financial reports

Using intelligent reporting tools, nonprofits can create specific financial statements. This not only helps with compliance but also boosts operational efficiency by identifying trends and improving processes. Keeping an eye on real-time data ensures that organizations can act quickly to maintain their financial health.

Benefits of regular financial report reviews

Transparency and Accountability: Demonstrates effective use of donations and grants.
Trend Identification: Helps spot areas needing improvement.
Compliance: Customizable report features ensure donor requirements are met.

Here's a simple table to illustrate the types of financial reports and their uses:

Get more information on more must-have reports for nonprofits, examples of statements and reports, and dashboard templates.

Top nonprofit accounting consultants

Signature Analytics
Carey & Co
Smarter Good
Accordus

Signature Analytics

Signature Analytics provides outsourced accounting and strategic financial solutions to mid-sized companies who need more clarity from their financial data with accurate, relevant, timely financial reports, prudent, strategic financial advice, and day-to-day accounting processes.

Signature Analytics' services

Comprehensive assessments
Outsourced accounting services
CFO and business advisors

Carey & Co

Carey & Co helps nonprofits grow by providing a focus on nonprofit finance. Carey & Co solves your governance, compliance, department turnover, monthly reporting, and audit concerns.

Carey & Co's services

Financial leadership team as CFOs, Controllers, and Senior Accountants
Communications & Operations
Human Resources
Governance
Automate, modernize, and assess all types of organizations

Smarter Good

By supporting client partners with a variety of services in fundraising, prospect research, communications, accounting, bookkeeping, and finance through high-quality services, Smarter Good helps grow their clients' reach and impact.

Smarter Good's services

Fundraising & Prospect Research
Financial management & Accounting
Editorial & Design support
Strategic planning
Grantmaking services
Customized research

Accordus

Accordus works with your staff and executive leaders to handle accounting, HR, donor management systems, and other industry-specific technical systems.

Accordus' services

Accounting
Database
Marketing & Communications
Design

How to choose the best nonprofit accounting software

Step 1: Evaluate Needs and Goals

Start by identifying your nonprofit’s specific accounting needs and long-term goals. Consider whether you need features like an all-in-one platform, fund accounting, grant tracking, intuitive interface, or donor management. Understanding your priorities ensures you choose software that aligns with your mission.

Step 2: Set a Budget

Determine how much your organization can allocate for accounting software. Consider not just the upfront costs but also ongoing expenses like training, support, and upgrades. Remember, affordability doesn’t mean compromising on essential features.

Step 3: Speak with the Specialists

Consulting with advanced product experts or software providers can save time and ensure you make an informed decision. These advanced product experts can guide you through features, compliance requirements, and implementation processes tailored to nonprofits.

Step 4: Understand Obstacles

When choosing and implementing new accounting software for a nonprofit, several obstacles can arise. Overcoming these obstacles often requires careful advanced plans, expert guidance, and selecting software specifically designed for nonprofit accounting needs (which is what you're doing now!)

Resources (aka $$): Nonprofits often operate with constrained budgets and staff, making it challenging to invest in new software and provide adequate training.

Special nonprofit requirements: Nonprofit accounting has unique needs like grant tracking and fund accounting, which not all software solutions adequately address.

Compliance and reporting: Nonprofits must adhere to specific regulatory and compliance requirements, necessitating software that can handle complex reporting needs.

Staff expertise: There's a reason why accounting is a whole field of its own. Finding and retaining staff with the necessary accounting and technical skills to implement and use the software effectively can be challenging.

Customization needs: Nonprofits may require software tailored to their specific operations, which can be costly or time-consuming to implement.

Migration: Switching to new software often involves migrating existing data, which can be complex. Ensure the software provider offers migration support to avoid data loss or errors during the transition.

Customization: Every nonprofit is unique, so customization is key. Look for software that allows you to tailor reports, workflows, and dashboards to fit your organization’s needs.

Step 5: Take Your Current Tech Stack into Account

Your accounting software should integrate seamlessly with existing tools like donor management systems, CRM platforms, or fundraising software. This ensures data consistency and reduces manual entry.

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Nonprofit accounting software FAQ

What are the typical costs associated with nonprofit accounting software?

Nonprofit accounting software often requires an annual subscription. This can be costly, especially if you need additional user licenses or cloud access. Many free options exist, but they might not fit larger organizations due to limitations. The software choice affects financial health by influencing operational costs through its functions and customization. Expenses may include consulting services if the software is complex or needs significant customization. Using general accounting software might require integrating third-party software applications for nonprofit-specific functions, adding to the overall cost.

How do I determine if a software option is suitable for my nonprofit?

Choose a software that's easy to set up and use, especially for employees with limited tech skills. Keep cost-effectiveness in mind, and remember that many providers offer discounts for nonprofits. Look for software that has fund accounting features to categorize income and expenses by fund and donation tracking for handling contributions. It should allow allocation of donations to projects for proper tracking and transparency.

Can I transition my organization to new accounting software smoothly?

Transitioning to new software needs careful planning to ensure financial data meets nonprofit compliance. Look for software with features like fund accounting and donation tracking tailored to nonprofit needs. Consider if the software integrates well with existing CRMs for a smooth changeover. Taking advantage of staff training to allows quick adaptation to the new system after transition.

What support options are available for nonprofit accounting software users?

Nonprofit accounting software should be easy to set up and use, especially for employees with limited tech knowledge. Customer support options, like online chat, technical support, and on-call training help nonprofits tailor accounting solutions for their financial management and compliance needs.

How do accounting software options differ in terms of compliance reporting?

Nonprofit accounting software helps navigate compliance needs by tracking donations and transactions like invoices and payroll, so the level of user access and controls for financial data privacy is a major differentiating factor. Other options that affect compliance are audit trails and approval controls to manage and track changes to transactions and advanced reporting tools that make comprehensive compliance reporting possible; the ability to generate custom reports is critical for tracking fund use, essential for regulatory compliance and transparency.

What accounting software do most nonprofits use?

Many nonprofits use QuickBooks Online or Blackbaud Financial Edge. Smaller organizations often opt for QuickBooks Online due to its affordability and user-friendly interface. Larger nonprofits may choose Blackbaud Financial Edge for its advanced features, inclusion in legacy nonprofit software, and nonprofit-specific functionalities.

What is the best accounting method for nonprofit organizations?

Fund accounting is the best accounting method for nonprofits, allowing tracking of different revenue sources based on donor restrictions. It ensures restricted funds are used for intended purposes and maintains transparency. As organizations grow, accrual-basis accounting becomes necessary for GAAP compliance and more accurate financial reporting.

Is QuickBooks free for non-profits? Does QuickBooks offer a discount for nonprofit organizations?

QuickBooks isn't free for nonprofits, but significant discounts are available. Through TechSoup, eligible nonprofits can access QuickBooks Online for a minimal annual fee. This offer is available for QuickBooks Online for Nonprofits; please note that organizations may request QuickBooks desktop products only if they have previously received a QuickBooks desktop product through TechSoup.