What is accounting software? Accounting software is a program that automates accounting tasks, from record-keeping to billing and payroll. Accounting software for nonprofit organizations is very different from accounting software for small business owners. Because the needs of organizations for each of these groups differ so greatly, a program or application designed specifically with nonprofit accounting in mind will usually be a better fit than one designed for the needs of a more general audience.
There are several benefits that we can get from accounting software. The most common benefit is that it helps us to keep track and monitor the money and the financial status of the Organization. This Software tool usually designed specifically for nonprofit organizations and manage their finance and accounting aspect very effectively. Nonprofit organizations for having so many expenses which should be tracked, controlled and monitored.
How to choose accounting software for your nonprofit
Accounting software should solve problems, not create headaches. So the first step in choosing nonprofit accounting software is to identify the obstacle(s) blocking your work. Then, look for features that can push those roadblocks aside.
That might be robust CRM functions that let you track, analyze and engage a large donor or membership base. Or maybe you need a way to easily accept online donations, along with some basic accounting functions.
Other features to look for:
- The ability to budget by fund, project and/or tag.
- Automated reporting for IRS Form 990.
- Grant management features to meet time and use restrictions.
Balance the features you need alongside your budget and whether the software checks other boxes, like scalability and ease of use, to choose the best accounting software for your organization.
QuickBooks Enterprise
You can tweak most QuickBooks accounting solutions to work for a nonprofit organization, but who has time for that? QuickBooks Enterprise does much of the work for you with a nonprofit chart of accounts that gives a clear picture of your organization’s assets, expenses and revenue, including from donations and retail sales. At tax time, you can easily transfer your data to the relevant IRS forms. Customizable reports allow you to manage budgets for various programs, view contributions by donor and grant and track top-tier donors.
While QuickBooks Enterprise is stacked with features, it also requires a stack of cash to acquire. Annual subscriptions start at $1,655 for one user and there’s no discount for nonprofit organizations.
Pros
- Industry-specific reports to track donors and manage budgets by program.
- Capable of handling a robust donor database.
- Priority customer service.
Cons
- Desktop only. Remote access is an additional charge.
- Expensive annual subscription.
- Limited to Windows users.
Aplos
Aplos does more than accounting — way more. The cloud-based software is a full-fledged customer relation management tool that allows your organization to easily track, manage and engage members and donors. True Fund accounting features help you stay on top of donation restrictions to ensure funds are spent on time and in the correct manner. And event management tools let you register, track and check in attendees.
The “Advanced Accounting” package is a pricey add-on at $159 per month but unlocks the ability to budget by fund or tag, track fixed assets and automatically complete your annual IRS Form 990.
Pros
- Designed for nonprofits and churches.
- Tools to build and host your website.
- Accept tithes and donations from your website.
- Online event registration and attendee tracking.
- True fund accounting with balance sheets and income statements by fund.
Cons
- Accounting features like tax reporting and budget by fund require an upgrade.
FastFund Online
FastFund Online Nonprofit Fund Accounting is an all-in-one accounting, fundraising, and payroll software program. It was designed by nonprofit experts to meet the needs of nonprofit and small governmental agencies.
There are four plans to choose from. The all-inclusive Premium plan starts at $94 per month and includes fund accounting, fundraising, and payroll tools all in one program. If you don’t need the all-inclusive option, you can purchase just the plans that you need. The fund accounting plan and fundraising plans both start at $42 per month, and the payroll plan starts at $66 per month. There is no setup fee, you can cancel anytime, and technical support is included in all four plans.
We chose FastFund Online Nonprofit Fund Accounting as the best overall accounting software for nonprofits because it meets the accounting, fundraising, and payroll requirements at the best price, less than $100 per month.
Features of each of the plans offered by FastFund include:
Nonprofit Accounting Plan
- Customized chart of accounts
- FASB-compliant financial statements
- Reports to assist with completing IRS Form 990
- Tracking of cash receipts and disbursements
- Customized financial statements
- Budgets
Nonprofit Fundraising Plan
- Constituent management
- Campaign management
- Membership management
- Cash, pledge, in-kind gift processing
- Automated receipts
- Pledge reminders
- Customized reports
Nonprofit Payroll Plan
- Payroll payment options
- Built-in payroll tax tables
- Automatic payroll tax payments
- Payroll tax filings
- Customized reports
You can schedule a free one-hour demo to learn more about how the software works. Tech support includes access to free webinars and YouTube video tutorials, and you also can schedule a private training session for your staff at an hourly rate of $100.
Breeze
Breeze is an affordable, cloud-based software designed specifically for churches. The pricing structure is simple—one plan at $50 per month that includes all available features. Breeze has been on the market since 2014 and services more than 8,000 small and mid-sized churches located all over the United States and Canada. We chose Breeze as best for churches because many of its features are customized to meet the specific needs of houses of worship.
Breeze Features
- Event management
- Access to unlimited users
- Add unlimited people to the database
- Online and text giving
- Track donors and gifts
- Access your data via the mobile app
- Create member directories
- Create, email, and text groups
- Manage event attendance
Like Aplos and QuickBooks Online, Breeze can be used on any computer with an internet connection. If you need assistance, tech support is available by phone or email.
Xero
As far as accounting software goes, Xero has a lot to boast about. This double-entry accounting software offers an advanced feature set that rivals QuickBooks Online, hundreds of integrations, excellent security, and a well-organized UI. Though the software does have a slight learning curve, there are quite a few resources available to help you get the most out of using Xero.
When used alone, Xero can help businesses and nonprofits of all sizes balance the books, send invoices and estimates, track expenses, and run reports. However, Xero does lack nonprofit-specific features. Fortunately, though, there are over 800 integrations that you can use to add the features you need for your business, including donor tracking, pledges, event tracking, and more.
What really stands out about Xero is that unlimited users are included in your monthly subscription fee. If you’ve done even a little research, you already know that this is practically unheard of when it comes to accounting software. So while you do have to pay a monthly fee for your Xero subscription (and the nonprofit integrations of your choice), you won’t have to worry about paying extra for additional users.
Pros
- Unlimited users
- 800+ integrations
- Advanced features
- Suitable for businesses of all sizes
Cons
- Learning curve
- Must use integrations for nonprofit-specific features
Xero Features
As previously mentioned, Xero may not necessarily have all of the specific features you need, but this can be easily remedied with one of its 800+ integrations. However, if your nonprofit is on the hunt for accounting software with advanced features, Xero fits the bill. Features include:
- 8 not-for-profit integrations
- Invoicing
- Contact management
- Accounts payable
- Fixed asset management
- Expense tracking
- Budgeting
- Reports
NonProfit Plus
NonProfit Plus is ideal for enterprise-level nonprofit organizations such as schools, museums, foundations, hospitals, government agencies, and food banks. It comes in three suites: nonprofit accounting, financial management, and procurement management. All three suites are cloud-based. We chose NonProfit Plus as the best for enterprise-level nonprofits because it has robust features to meet the needs of large nonprofit organizations.
Nonprofit Accounting Suite Features
- Fund accounting
- Restricted funds management
- Grant management
- Encumbrance accounting
- Budget management
- Donor management
- Board management
- Volunteer management
- Enhanced audit trail
Financial Management Suite Features
- General ledger
- Accounts receivable
- Accounts payable
- Cash management
- Currency management
- Intercompany accounting
- Recurring revenue management
- Fixed assets
- Time & expense management
Procurement Management Suite Features
- Inventory management
- Purchase orders
- Sales orders
- Requisitions
Similar to FastFund Online Nonprofit Fund Accounting, you can pick and choose the suite that best fits the needs of your nonprofit organization. NonProfit Plus does not include pricing on its website. You can schedule a free product tour to learn more about all of the robust features included in each suite plus consult with a representative who will create a custom quote based on the needs of your nonprofit.
Blackbaud
First founded in 1981, Blackbaud has had a long time to secure its name and reputation in the nonprofit accounting world. The company offers dozens of different products designed for various organizations and nonprofits. But its bread and butter is Financial Edge NXT.
Financial Edge NXT is a cloud accounting solution for mid-sized nonprofits that is used by over 5,500 organizations. The software offers strong accounting and basic nonprofit features. The interface is beautifully designed and well organized. The company also offers strong security and free chat support.
Pros
- Numerous accounting features
- Customizable
Cons
- Expensive
Blackbaud Features
Financial Edge provides a wide array of features and meets the accounting standards nonprofits need. Some of these features include:
- Fund accounting
- Chart of accounts
- Bank reconciliation
- Accounts payable
- Accounts receivable
- Journal entries
- 100+ customizable reports
- Manage grants and allocations
- Budgeting
- Invoicing
- Purchase orders
- Track revenue and expenses
- Project management
- Vendor management
- Document storage
- Fixed assets
- Payroll
CONCLUSION: Nonprofit organizations need accounting software to handle their financial records, but they have a wide range of needs. Accounting software for non-profits is different from personal accounting programs, and comes with a variety of features designed to streamline the accounting process and improve internal coordination. These tools work well for smaller organizations with fewer than a hundred employees, but can also be useful for very large groups.