FINDING THE RIGHT ACCOUNTING SOFTWARE PACKAGE
by Brandon Coleman

Let's face it, everyone wants to know where their money is going, but nobody wants to keep track of where it went. In the nonprofit world, the focus of an organization is not on how much money was made. However, that does not diminish the importance of having a good system that accurately tracks the organization's money. An effective accounting software package can help make monitoring finances less cumbersome and help save money at the same time.

As with any major purchase, there are many factors that should be addressed before making a decision on which new accounting software package to buy, or whether to buy at all. The following list is by no means all inclusive, but should give you some idea of what to look for when evaluating your options.


*ORGANIZATIONAL NEEDS - Probably the most important step in determining the kind of software needed is to make a list of what your organization requires from an accounting software package. While this will be comprised primarily of the accounting functions your organization performs on a regular basis (i.e., allocations, fundraising, billing, payroll), it will also include compliance with current accounting standards, grantor and/or government reporting requirements and internal reporting requirements. A good accounting package will be capable of meeting all of your reporting requirements and adhering to current accounting standards without forcing too much re-creation of data.

USER FRIENDLINESS - With most accounting software developers now providing (or soon to be providing) Windows-based packages, there is a marked increase in the "user friendliness" of these packages. This is where some of the potential for long-term savings lies. Not only are Windows packages generally easier to use, but they also allow for multitasking and often have vastly improved help functions (many provide the entire software manual at the click of a mouse button). If this allows four of your staff members, who earn twelve dollars an hour, to save fifteen minutes a day for an entire year, you will pay for your $3,000 accounting system in a year with just your payroll savings.

HARDWARE REQUIREMENTS - While the development of Windows accounting packages has increased "user friendliness," it has also increased the need for more advanced and powerful hardware. Knowing your current hardware limitations is essential in evaluating any software purchase, especially accounting software. It is imperative that you know that your hardware has the adequate memory, hard drive space and processing speed to accommodate the software before purchasing it. Without checking this information first, you could end up with a far worse situation than the cumbersome accounting system you were intending to improve.

FLEXIBILITY - As with any software package, flexibility is an important consideration. Nonprofit accounting can be extremely complex and dynamic. There are frequently new grants and projects which may have different reporting requirements and there are always new accounting pronouncements, making flexibility vital. Many packages offer reporting that can be virtually tailor-made to your needs. Others offer versions of their product in which the actual programming code can be accessed and altered to suit the organizations needs. If you use other nonprofit software indirectly related to the accounting function (i.e., fundraising or membership), many packages can be adapted to interface with those systems.

PRICE - You didn't think that an accountant would overlook this important consideration, did you? Of course we all have limits on what we can spend, but more important is the value we get for what we do spend. Beware of the hidden costs that can be associated with a new software purchase. Make sure you know which modules (i.e., accounts payable, accounts receivable) are included with the general ledger software, and the cost of any additional modules you may need. Many systems start with the bare bones, which is rarely enough, and charge additional fees for what many of us would consider basic needs. Also, find out how much technical support you'll receive with the software and how much additional support will cost. Many software companies offer free support for a period after the purchase, but will charge fees for support of additional modules. Be aware that some developers may require payment for mandatory periodic upgrades and maintenance fees, and virtually all software developers will charge additional fees for multiple users.

After you consider these factors, it is a good idea to ask potential vendors for product demonstrations. Demonstrations help to provide a better understanding of the products and may inform you of beneficial features that you had not considered. An accounting firm regularly providing demonstrations and independent from one particular software vendor, such as Raffa & Associates, provides the added advantage of an objective demonstration and comparison of several software packages viewed by the firm as the most effective software for your situation.

This should get you started on your not-too-envious task of finding the right accounting software package. As difficult as it may seem, focusing on the above factors and developing a plan for the selection process should make the task less daunting and more effective.

* Solomon Software
* State of the Art - MAS 90 Software
* Fund E-Z
* Great Plains Software, Inc.