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Then most not-for-profit organizations are formed, their accounting needs are very basic and are nicely served by the user-friendly QuickBooks or Peachtree low-end accounting systems.
Many times these sub-$200 systems fit a nonprofit's needs exactly. And sometimes, organizations stay with basic software systems because they don't know what an industry-specific software system would do for them.
One of the biggest shocks is the cost of software. QuickBooks or Peachtree can cost $250 or less, while all the higher-end, nonprofit-specific accounting systems retail for over $1,500 per module. While this allows you to purchase only the features that your organization requires, it can add considerably to the final cost. It's not unusual to see price tags of $20,000 and higher for full implementations.
Because not-for-profit industry software is more complex, it often requires the assistance of consultants in the installation and training process. With consuiting rates ranging from $100 to $200 per hour, depending on geography, it's easy to see that the cost of upgrading to a larger nonprofit-specific system cannot be taken lightly.
Signs you may be outgrowing entry-level software
Low-end accounting systems are most practical for nonprofit organizations that process between 300 and 500 transactions per month.
Beyond these levels of transactions, you may see slowdowns in reporting or on-screen inquiries. These slowdowns are sometimes acceptable to organizations in light of the large costs that may be needed to move to a larger software program designed for nonprofits.
Does your organization require customized financial statements?
Entry-level accounting systems often provide only basic financial statement customizations. Moving to nonprofit-- specific accounting packages adds the ability to customize the look of financial statements to the specifications of boards of directors, auditors or other reporting agencies.
Frequently, nonprofit organizations must monitor expenditures right down to the funding source or program level. These reports may have to draw financial data that crosses over one or more fiscal years. Creating reports that cross financial periods is usually not an option with lowend accounting systems. This requirement alone often forces nonprofits to upgrade to a software system written for their industry.
It is not unusual for a nonprofit to grow so much that a larger number of characters are needed for their chart of account structure. These characters are often...