Are you curious about free accounting software for nonprofits in 2021? Or about the best accounting software for nonprofits? Read this article on accounting software for small nonprofits. You will find here answers to questions about types of software that are appropriate for nonprofits, needs, and benefits of free or free trial accounting software, some advice on choosing the right free or trial version of accounting software for small nonprofit organizations.
You don’t have to be a large company with a dedicated finance department and an unlimited budget to have quality accounting software. As a nonprofit organization, you just have to take advantage of the best free accounting software for nonprofits.
Many small nonprofit organizations are interested in using free accounting software but are unsure what packages are the best. This guide on how to choose free accounting software for nonprofits will help you find, download, and use nonprofit software that can keep your records up-to-date.
Nonprofits need business management software to help them operate their organization. It should also help a nonprofit treasurer to effectively manage day-to-day operations and not get bogged down in the details of accounting. Nonprofit accounting software is a great option for any non-profit to manage finances.
The Benefits of a Nonprofit Accounting System
We know that nonprofit accounting is different than for-profit accounting. Nonprofits must track and report on segregated
accounts in the form of funds which have to be treated as separate entities with their own general ledger. They must provide
individual income statements and balance sheet reports in addition to total reports for the entire organization. These tasks
are easy with a nonprofit accounting system that helps:
• Meet unique financial reporting requirements
• Drive different business processes, such as grant and endowment management
• Ensure that donor and grant restrictions and intent are met
• Provide internal accountability to safeguard assets
• Make timely financial information readily available to donors and prospects
• Provide actionable data to managers to use in strategic decision making
• Demonstrate accountability to multiple stakeholders—donors, volunteers, the public, and state and federal agencies
Another important note is the difference in staffing levels between nonprofits and for-profit organizations.
QuickBooks Online
QuickBooks Online is designed for use by growing businesses and freelancers but can be configured for nonprofits. The software has become the go-to tool for many nonprofits for their accounting needs mainly because of its ease-of-use and integrations with popular third-party programs. Using the platform eliminates the need for nonprofits to invest in costly fund accounting systems, very ideal, indeed, if you are on a tight budget. The solution effectively mimics the functions of business accounting systems; all it takes is some tweaking.
To customize QuickBooks Online to fit your nonprofit’s accounting processes, you will need to configure your account to treat customers as donors. This can be done by accessing the system’s account and settings. Another thing that you need to tweak is your income and revenue, which can be altered to reflect revenue and expenditures. You can also change the tax form to form 990, which is assigned to nonprofits. Now you can enjoy the benefits that come with using Quickbooks Online.
You can monitor both revenues and expenses based on donor, service activity, and project while populating the system with all your donors and subdonors, which is very helpful in establishing a contact database. This allows you to track donations and come up with reports that can be presented to decision-makers. Revenues from projects can likewise be monitored according to donor, giving you an idea who’s funding what. And if you want, you can also copy some information from your donor management tool. If you do not yet have one, you can take your pick from the best donor management software.
Quickbooks Online is being marketed under different pricing schemes, starting at $7.50/month.
Detailed QuickBooks Online Review
Sage Business Cloud Accounting
Though it is designed specifically for small businesses, the cloud-native accounting platform Sage Business Cloud Accounting is also suited to nonprofit organizations. It aims to help them overcome common accounting challenges, such as compliance. The also software makes most complicated accounting processes fairly simple, getting rid of complexities arising from the simultaneous administration of numerous projects and the use of a variety of currencies. The system resolves these problems by effectively tracking all donations and expenses while supporting different currencies.
The program likewise stores all information relevant to transactions, which further assists nonprofits in complying with standards. It provides transparency to all organization activities by giving them accurate and detailed data. This ensures total accountability, ensuring that stakeholders and donors remain engaged. The system’s powerful reporting tools enable it to generate reports that can be used in making data-based decisions. You can likewise boost your fundraising activities using Sage Business Cloud’s project tracking feature.
Furthermore, Sage Business Cloud Accounting offers two free licenses to nonprofits. The Sage Foundation also provides a 50% discount on subsequent user licenses.
Detailed Sage Business Cloud Accounting Review
AvidXchange
If you are a growing nonprofit looking to streamline your accounts payable process, AvidXchange can be an excellent solution. It is a cloud-based software with modern automation features such as OCR technology that can reduce manual data entry and human error. Meanwhile, customizable and automated workflows can help your AP team gain more visibility and control when it comes to tracking the status of invoices.
A common problem with accounting and accounts payable is paper chasing. Avidxchange helps address this problem with automated invoice processing. Your AP team no longer needs to deal with an endless and chaotic pile of paper documents since all your invoices can be automatically coded, passed on to the appropriate workflow and sent electronically for approval.
One of the notable features of AvidXchange is integration. The platform has more than 180 integrations with leading ERP and accounting systems, which means your nonprofit can continue using your current accounting system of record while creating new custom approval workflows.
The software consists of four modules, which offer a lot of flexibility for companies and organizations when it comes to choosing apps they would like to implement in their AP processes. For example, the utility bill payment module is suitable if you are looking for a way to reduce the burden of capturing, receiving, and paying utility invoices. It has automated consumption analytics and payment processing so your AP staff can take some of the manual and repetitive tasks off their shoulders.
Detailed AvidXchange Review
Rossum
All-in-one document gateway Rossum is a platform built to help teams collect their documents in a secure and unified inbox for easier processing. It comes equipped with self-learning AI technology and cognitive data capture to make it easy to record transaction information. What makes this document management tool unique is that it has a highly configurable interface that allows users to use it for accounts payable processes.
Once you set Rossum up for your accounting workflows, you can then use its notification systems and custom approval rules to optimize your processes. You can also integrate the platform with your ERP and RPA systems so you can further streamline your accounting processes.
Aside from the abovementioned, Rossum also comes with an analytics and reporting system. With this, you can easily access audit trails and keep tabs on who has access to your accounting files.
Rossum is available on a by-quote basis. Make sure to get in touch with the vendor to get more information on their pricing tiers.
Detailed Rossum Review
Bill.com
Bill.com is an end-to-end accounting platform created for SMEs and freelancers. Completely web-based, the app makes it easy for users to access their data wherever they may be. Nonprofits stand to benefit from the numerous features that accompany the tool.
Using Bill.com, you can accept donations, record them, and even track newly received contributions. It can be configured to schedule one-time or recurring donations on a monthly, quarterly, or annual basis. It even comes with bank account management tools that make it easy to keep tabs on all transactions with donors and sponsors.
All nonprofits generally face problems when it comes to recording expenses. Luckily, Bill.com automatically records cash inflow and outflow and syncs all data from other business systems you leverage for transactions. It also comes with ePayment processing tools that make it easy to facilitate transactions as securely as possible. Last but not least, the platform has a robust reporting module that lets users gain insight into their company data. Should you need to extend the functionalities of the platform, it comes with API capabilities and has native integrations with a number of third-party business systems.
Bill.com offers three monthly plans ranging from $39/user/month to $69/user/month as well as an Enterprise plan available by quote. All subscriptions are priced depending on the features that a user requires.
Yooz
Yooz is all about providing nonprofit organizations a state-of-the-art accounting solution to handle the complexity of grants and donations from the campaign activities generating them. A powerful AI Deep Learning algorithm churns any number of data generated by these campaigns quietly while a user-friendly interface ensures that users are not intimidated by the platform.
Nonprofits can generate more than their share of paper trail or digital forms, but Yooz is designed to handle all of them. It can work with any format of scanned images and files from any operating environment, from PDFs to JPGs.
Yooz provides nonprofits the unmatched simplicity, mobility, and traceability that it is known for. It allows users to capture data seamlessly and automatically syncs with the master data, eliminating the need for manual updates that are also prone to human error.
For security, Yooz implements a FakeDetection module to detect forged documents and eliminate fraudulent transactions, a known hazard in today’s high-stakes world. Internal controls are overseen by powerful robotic process automation (RPA) technology for additional safety to nonprofit organizations.
DocuPhase
DocuPhase is a multi-application automation software. It can be a nonprofit organization’s valuable asset, as it is a robust platform that has numerous capabilities. Its main use is for accounts payable automation, which can assist nonprofit entities in keeping track of their dues. This can also assist them in sending payments to their vendors or suppliers on time to maintain profitable relationships.
The software enables nonprofits with tools and technologies such as Optical Character Recognition. With it, DocuPhase can read the contents of scanned documents and use the information it gathered to fill forms. As a result, there is no need to manually enter data on the end of the user. Because of this feature, nonprofit organizations can automate payments to their suppliers based on the information from invoices.
Argenta by Devscape
For organizations looking for a scalable, all-in-one solution, Argenta may be the right option for your nonprofit organization. In addition to accounting, you’ll have access to CRM, event management, fundraising, and workflow tools all in one convenient, cloud-based platform.
Core features include:
- General ledger
- Donor tracking
- Grant management
- Donation management
- Account registers
- Payroll
- Budgeting
- Financial statements
- Time tracking
- Purchace orders
- Invoice system
- Custom reporting
Best for Small nonprofit organizations who want a comprehensive, all-in-one, organization management platform.
5. BUCS Fund Accounting
Created by Donald R. Frey & Company BUCS (Budgetary Control System) Fund Accounting Software is designed to address the unique needs of nonprofits, government agencies, and utility companies. With Microsoft Windows® design, users will find this offers a familiar, simplified layout while the tutorial explains the details, and you can customize your software with the needed modules to add on. It’s important to note this is a Windows® only option, and it is not cloud-based, which may prove challenging for those who work from home or remotely.
Core features include:
- General ledger
- Unlimited funds
- Basic reporting
- Budget planning
- Project tracking
- Grant tracking
Additional features include:
- Accounts payable/receivable
- Bank reconciliation
- Cash receipts
- Fixed assets
- Fee receipting
Best for: Small nonprofit organizations, municipal and government offices, and small utility companies who need a basic accounting platform.
Free trial: N/A
Contact Donald R. Frey and Company for a demonstration!
Blackbaud Financial Edge NXT
Blackbaud has a well-earned reputation for designing nonprofit software solutions, specifically serving large organizations and government entities. The Financial Edge NXT fund accounting software is no exception. This cloud-based software is robust, allowing users to streamline the financial operations of your organization and save you time while ensuring accuracy. However, its biggest advantage is the level of transparency it provides, with built-in compliance and security management that not only saves you time but keeps your organization accountable.
Features include:
- General ledger
- Accounts payable/receivable
- Activity tracking
- Asset management
- Grant management and tracking
- Bank reconciliation
- Budgeting and forecasting
- Compliance management
- Partnership accounting
- Fundraising support
Best for: Large, multi-department nonprofit organizations who need comprehensive accounting software.
Free Trial: N/A
CommunitySuite
CommunitySuite is a web-based nonprofit software solution that allows you to integrate your fund accounting into your other operations to minimize data entry and importing While the customization features and capabilities are limited, most small organizations will find the convenience and affordability make up for the lack of high-end features.
Core features include:
- General ledger
- Accounts payable/receiveable
- Asset management
- Bank reconciliation
- Compliance management
- Donor management
- Donation management
Best for: Small, community foundations
Free Trial: N/A
Denali FUND
Denali FUND is available as both cloud-based options and on-site. You’ll notice that this platform highly emphasizes security with internal controls that allow for GAAP and FASB compliance and help deter fraud while managing fund accounts. With multiple modules and built-in features, users can create a more customized platform for how they maintain their accounting, and there are reporting options, including cash flow, grants, donation tracking, and financial activities.
Features include:
- General ledger
- Bank reconciliation
- Compliance management
- Unlimited fund accounts
- Grant management
- Donation management
Additional features include:
- Accounts payable/receivable
- Payroll
- Predictive analytics and pulse alerts
- Fixed assets
- Cloud accounting
- Donor management
- Time tracking
- Fundraising tools and tracking
Best for: Small to medium-sized organizations who are seeking strong internal security
Free Trial: 60-Day trial
Demo: Register to view a demo
Fastfund Nonprofit Accounting Software
Fastfund Nonprofit Accounting Software is a cloud-based software for small to medium nonprofits and small government agencies. This is specifically designed for fund accounting to ensure accountability and maintenance related to funding specific goals or sources, and it saves time through seamless integration with your accounts payable, cost allocations, fundraising, and payroll.
Core features include:
- General ledger
- FASB compliant statements
- Bank reconciliation
- Cash receipts and disbursements
- Asset management
- Donor management
- Budgeting and forecasting
Optional features:
- Accounts payable/receivable
- Cost allocations
- Fundraising management
- Volunteer management
- Donation processing
- Campaign management
- Payroll
Best for Small and medium-sized nonprofit organizations and churches
Free trial: Yes, contact for the length of the trial
Demo: Connect to an online, 60-minute demo
Key Advantages of Fund Accounting Software for Nonprofits
Nonprofits practice accounting as they record money received from donors and fundraising and money spent on administrative or operating expenses. The accounting method used by nonprofits varies from for-profit businesses. For-profit businesses use their financial reporting to identify profitability. Nonprofits use their financial reporting to ensure that assets feed the organization’s mission. Nonprofits use fund accounting and benefit from several advantages of using this method.
Conclusion
The professional field of non-governmental organizations, which includes religious organizations, charitable organizations, social clubs etc., handling the daily matters include bookkeeping, finance administration, donations collection, donations management etc. It’s certainly not an easy task. It costs a lot of money if you hire a team of professionals towards these tasks.
That’s why dozens of nonprofit software platforms have recently appeared on the scene. You can test them all or find tools which are related to each other and see if you can work with one platform which includes all these modules or a few platforms from different vendors at once.