How do you know your accounting software is the best choice for your organization? It’s somewhat like choosing an ice cream flavor – the choices are limited by specific needs or intolerances and the rest is just personal preference. However, with an ever-increasing number of choices available, the decision is never easy. It’s important to know what factors other than cost to consider when weighing your options.
QuickBooks (QB) is a popular choice for all types of organizations, and while we aren’t promoting any specific software in this article, QB does have some benefits. Other software like FreshBooks and Xero may be just as user-friendly as QB, but they aren’t as widely used. That alone can make QB a more appealing choice – organizations know they can easily find a bookkeeper familiar with the software and CPAs know how to easily get what they need from QB. A software with more users will also tend to respond to user issues or quirks in the system with updates on a more regular basis. For organizations with more complex needs, Abila/MIP, Blackbaud Financial Edge and AccuFund are the most widely used choices, although there are others that may be more suitable for sophisticated users with special needs. Though not necessary, churches and schools often use accounting software specifically designed for those types of organizations.
The decision about whether to use a cheaper, more basic software or a more expensive, robust software should be based on the complexity of your organization’s financial reporting needs, not the size of the organization’s budget. More revenues don’t necessarily require a more complex software, but additional grants, funder reporting requirements and more diversity in program activities may indicate a need for more complex software, even for lower revenue organizations. Consider how much time your accounting staff spends tracking financial data on spreadsheets and creating financial reports outside of the accounting software. Could some of that be done within a more robust accounting system to prevent duplication of data entry efforts? If your organization needs to track revenues and expenses separately for various types of activities, locations or grants, be sure the accounting software you choose can handle what you need. More robust software provides significantly more tracking capabilities for various data segments.
Another consideration is how the software interacts with your fundraising software or payroll system. Compatibility between various software create efficiencies and reduce data entry errors that cause reconciliation discrepancies.
Online versions of accounting software are becoming more prevalent, even with the more robust systems. This isn’t always a cheaper option, but offers many organizations the flexibility they need for outsourced bookkeepers, CPA assistance and multiple locations. It can also be a great option for organizations without an IT department since backups, updates and hosting is all in the cloud. Online versions of accounting software have commonly sacrificed functionality for mobility, which ruled out online options for many complex organizations. However, we’re seeing the online versions of software become more functionally comparable to the desktop versions each year. It’s definitely worth considering.
While the process of migrating to a new accounting software is rarely simple, it’s not impossible. The most important things you can do when migrating to a new accounting software are backup your old system and hire a consultant who specializes in your new software. Get recommendations for the consultant, if possible. You want to feel comfortable they’re going to set up your new system with your organization in mind. We’ve seen situations where additional options could easily have been made possible during setup for free, but changing it later requires additional fees. Know what options and chart of accounts framework you want before completing the setup. Have your consultant review your options and talk to your accountant if you’re not sure what you need. Remember that a change of accounting software is typically giving you more features, so the fact that you didn’t have a feature previously doesn’t mean you don’t want it in the new software.
As with ice cream, there will be some intolerable options that you can ignore, and the final decision will be based on which features make you and your accounting staff most satisfied.
