5 Best Nonprofit Accounting Software Options

Budgets allow you to plan for the future and make sure your spending aligns with your nonprofit’s mission. Their experience in the nonprofit sector ensures that your financial statements and reports meet the necessary standards, and they can guide you through any challenges unique to your organization. Hiring a bookkeeping advisor or consultant helps take the burden off your internal team, allowing you to focus on your nonprofit’s mission. But since most nonprofits work with tight budgets, it’s important to find someone who’s experienced, reliable, and affordable. These statements are the backbone of your nonprofit’s financial health and play a key role in maintaining transparency with your donors and stakeholders.

How are donations recorded for a nonprofit?

Nonprofits of all sizes use the following software to create and keep these reports up to date. To rank the best accounting software for nonprofits, we first considered whether the software offered nonprofit-specific features, like donation tracking and Form 990 generation. We also considered price, ease of use, data security, types of plans, and customer reviews. An income statement for nonprofits is a financial statement that shows the sources and uses of funds over a set period.

Nonprofit Accounting: Basics and Best Practices Guide

• At The Charity CFO, we’re not just here to reconcile your books—we’re here to elevate your thinking.
• While for-profit organizations track bottom-line earnings, nonprofit accounting focuses on demonstrating good stewardship of financial resources.
• In this comprehensive guide, we will break down the basics of bookkeeping for nonprofits and show you how to keep your financial records in order.
• And, because choosing the nonprofit accounting software can be a complicated decision, we’ve compiled this guide to help you find the right solution for your organization.

Since QuickBooks was also made for non-accountants, it’s easy for first-time nonprofit bookkeepers to get a handle on nonprofit finances. Plus, QuickBooks’s mobile accounting app is at least as user-friendly as its software—so if you plan to do a lot of on-the-go donor management or financial tracking, QuickBooks is one of your best options. It also helps nonprofits measure their financial performance against their charitable goals. Unless you’re a power user or an accountant, business accounting software https://greatercollinwood.org/main-benefits-of-accounting-services-for-nonprofit-organizations/ can be difficult to use. This is most apparent at smaller, volunteer-run nonprofits that “do the books” manually or with Excel spreadsheets.

Is there free accounting software for nonprofits?

Outsourcing can provide advanced and less costly bookkeeping services than a typical in-house bookkeeper. So, your first task is to decide whether you just need compliance (basic bookkeeping), or if you’re ready to graduate to full-service accounting that will help you serve more people and raise more money. Both require very different levels of effort and expertise and the cost for full-service accounting is much higher.

• Plus, give you timely financial reports and expert advice that help you carry out your mission.
• Following generally accepted accounting principles helps prevent issues with donors and audited financial statements.
• Springly offers an all-in-one solution for nonprofits, which can simplify workflows by keeping accounting, membership and event management under one roof.
• Nonprofit organizations face unique challenges in managing payroll, particularly when integrating volunteer efforts with paid staff compensation.
• For larger needs, we recommend the Advanced plan, accommodating more than five users.
• This website uses analytic tools to collect anonymous information such as the number of visitors to the site, and the most popular pages.

Where exactly your income and expenses come from and how you group them in your budget will depend on the nature of your organization. An annual operating budget for a university will be very different than a budget for a small local art gallery. Our team is ready to learn about your business and guide you to the right solution. Keep in mind that financial reporting should be accurate and consistent and reflect the true nature of the organization’s operations. Taking care of overhead before seeking out donors for a nonprofit demonstrates financial responsibility and a commitment to efficiency—important decision-making factors for potential donors.

Zoho Books

It’s made for nonprofits run by volunteers, and also lets you manage volunteers with its built-in tool. You can handle budgets, manage bookkeeping, and create financial reports with this software. Between meeting with Board members, tracking volunteers, and applying for grants, you’re probably low on spare time. This lack of time means you have less energy to focus on accounting and bookkeeping.

Taxes for nonprofits

NerdWallet compared more than a dozen accounting software products, and Aplos is our top choice for most nonprofits. ZipBooks also offers color-coded reports and simple graphs, which make it easier for non-accountants to get an overview of financial performance. This can be helpful for nonprofits that want a quick, visual understanding of their financial status without digging through complicated spreadsheets or reports. Many small non-profits have a modest budget or minimal operating activities. If your non-profit can’t hire an employee with specialized experience, consider outsourcing to third-party professionals. Bookkeeping professionals can help your non-profit maintain accurate records and comply with reporting requirements.

Nonprofit organizations have a tax-exempt status with the Internal Revenue Service (IRS). If they want to maintain this status, they need to do accurate bookkeeping. First, find out which considered software offers a free trial or a version you can use to try the software before buying. No one knows your nonprofit better than you do, which is why you should hire a professional bookkeeper to get your records in order and leave the decision-making up to your organization’s leaders. And, if you need further advice, an experienced bookkeeper can give you their perspective on your budget. Depending on the location of your nonprofit, you may be required to abide by certain state reporting requirements.

Whereas your type of work might need more administrative support than others. A one-time unrestricted gift needs basic transaction recording, while a multi-year restricted grant requires continuous monitoring. This key difference in the LLC vs. nonprofit Top Benefits of Accounting Services for Nonprofit Organizations You Should Know comparison comes with strict requirements for financial reporting and public disclosure. You’ll need to file Form 990 with the IRS, which anyone can look up online. For example, when a nonprofit buys equipment or property, these assets are managed differently than in a business setting. Invoices are legal documents and should have your organization’s logo, name, address, email, phone number, invoice number, and date.