• Colin Doyle CFO

Nonprofit accounting in 2018 : Vendors discuss the latest developments, and the future

Updated: Jan 24, 2019

By Ted Needleman

For many years, software for nonprofit organizations trailed in functionality behind other verticals and especially more generic accounting software. Over the past several years, though, this has changed significantly. Today’s nonprofit software is as up to date and functional as any software available.

We surveyed many of the major vendors of nonprofit software to find out what they have addressed in the past year, what they are working on (when they were willing to talk about it), and how they see evolving technology impacting the industry and their products.

Keeping up with the Joneses

Just about every vendor we surveyed has made impactful changes and updates to their software. Some of these were in the user interface. For example, Joseph Scarano, CEO of Araize, told us that the company has totally revised the user experience for FastFund Online with an updated user interface. The new version of FastFund Online will be more responsive on mobile devices, and the interface change also incorporates new dashboards that provide more complete insights into an organization’s financial data. Other new features include after-the-fact allocations for indirect cost reporting, integration with web donation pages and email applications for the fundraising system, as well as ACH payment for vendors, and new financial reports to provide more detailed and targeted information.

Ease of use is also an area that Aplos has addressed. “One of our primary goals of this past year for our accounting product was a focus on increasing the ease and speed of managing their organization,” said CEO Tim Goetz. “Our new integration with Gusto makes it faster to automatically track payroll and taxes in the bookkeeping. Aplos also built out several payment processing options that make it more streamlined to accept and track payments for event registration, ticket sales and donations from a website.” Other improvements include enhancing accounts payable and accounts receivable to help organizations quickly pay vendors, receive payments, and enhanced pledge tracking to make it easier to match donations received to donor pledges and send pledge statements.

AccuFund has also improved its ease of use, according to vice president and general manager Ian Scotland, with a completely new user interface in Version 6.01 of its AccuFund Accounting Suite.

Other vendors have also made significant upgrades and updates to their software. “We released Serenic Navigator 2017 Improvement 1, powered by Microsoft Dynamics NAV, which included many enhancements for financials, payroll/HR, grant management, remote field transactions, and analytics — our new data analysis, reporting and dashboard-based decision support tool,” reported Serenic Software marketing director Ruby Bleiker.

Oracle NetSuite also had some significant news in this area. According to nonprofit industry marketing leader Morgan Carey, on Oct. 25 the vendor announced an expansion of its social impact program that supports nonprofits through three core pillars: donating NetSuite enterprise software, providing pro bono services, and building capacity in organizations. “As part of our Suite Donation pillar,” he said, “we offer a base donation of Nonprofit SuiteSuccess to all nonprofit organizations. Additionally, we are announcing an expansion of the program to offer a no-cost activation as part of the donation.”

Another major enhancement for NetSuite was the release of the NetSuite Nonprofit SuiteSuccess. “This edition pre-configures leading practices for operating a nonprofit on NetSuite software derived from the experiences of over 1,300 nonprofit customers. Key feature improvements … include custom roles, dashboards and KPIs; grant accounting; fund accounting; automated FASB reporting; simplified financial segmentation; and program efficiency tracking,” Carey said.

Blackbaud has also made significant changes to its extensive lineup. According to Michael Blanton, director of product marketing, financial and payment solutions, “For years, our Budget Management module has offered advanced budgeting capabilities through General Ledger for those requiring more sophisticated techniques for developing a budget and monitoring it throughout the fiscal year. This year, we have added enhanced grouping options and customizable views to holistically review account, program, and grant distributions in a glimpse ... And, as part of an initial release of new functionality that will support Allocations and Blackbaud SKY Reporting, we have added configurable, unique units of measure that expand the ability to not only measure and utilize monetary values, but also track unit values. Statistical Units gives users access to track cumulative data, set filters by date range through all available fiscal years, and use formulaic metrics to get clear insight into how their spending is directly contributing to specific mission outcomes.” Other new additions are expense management and the Budget Creator Excel Add-In and the Distribution Set Creator for Blackbaud Financial Edge NXT.

An eye on the future

Blackbaud’s Blanton shared some of the things the vendor is working on: “Expense Management in Blackbaud Financial Edge NXT will provide comprehensive authorization controls, real-time visibility into organization-wide spending for better cash-flow management and greater insight into vendor spend, so organizations can negotiate better rates based on spend volume to achieve cost savings. Blackbaud SKY Reporting is cross-platform analytics and reporting capabilities currently enabled in Blackbaud Financial Edge NXT, Blackbaud Raiser’s Edge NXT and other products. In addition to the simple, no-setup, interactive analysis tools in our prebuilt dashboards, we are soon launching Insight Designer that enables users to create and distribute their own dashboards most relevant to their organization’s reporting needs.”

He also added, “Blackbaud is enhancing our fund accounting functionality by providing organizations with the ability to further manage their endowed and invested funds. This capability will generate spendable balance calculations; we will also be adding the ability to calculate the administrative fees paid by each fund. To augment the investment portfolio features, we are planning to support investment return allocation by either balance or units. In addition, we will support ensuring that each donor’s specific requested investment pool elections remain true to the original percentages as gains/losses and investment income is allocated over time. Lastly, we will be offering a fund statement report that will track the original gift, investment returns, and spendable balances, as well as gift and grant history. In 2019, Blackbaud will be delivering a donor fund portal that will support individual donors logging in to see fund balances, gift and grant history. Donors will also be able to search for potential recipient organizations and make grant recommendations.”

Not every vendor shared such comprehensive endeavors. Ken Hilton, president of Red Wing Software, simply said that they will be making changes to comply with all the new tax law changes to accounting, depreciation and payroll. And Donald Cassady, president and CEO of Grants Management Systems Inc., described a major undertaking in a few words: “We have completed our software migration to the .net platform. This is a dramatic increase in its functionality and ability to communicate with other products. Now that the .net migration is complete, we are going to immediately begin the creation of a web-based product.”

Araize plans on adding bank integration, and more integration with third-party applications through an open API to the FastFund Online system, while NetSuite’s Carey said, “Our three-year roadmap for the nonprofit vertical focuses on three priorities: unprecedented financial transparency to allow nonprofits to easily report all required financial data to internal stakeholders, donors and statutory authorities; connecting dollars to outcomes to allow nonprofits to calculate and manage their organization based on cost per outcome in real time; and finally, transforming donor/member experiences to optimize fundraising and membership revenue.”

Not just counting beans

CRM is one popular application that a number of vendors offer. AccuFund’s Scotland feels it’s very important to offer more capability than just accounting, and his company does so by both extending its offering and partnering with other industry vendors. “AccuFund provides seamless integration between Salesforce and our AccuFund Accounting Suite to provide a powerful, streamlined solution for nonprofits. The real-time integration offers time-saving benefits that allow nonprofit organizations to improve efficiency, reporting and overall organizational management. Beyond our AccuFund Accounting Suite and our Government Accounting Suite, we are an industry leader in representative payee software. AccuFund is also excited about our continued work with endowments and our newly released Endowment Management System.”

Araize is another vendor that extends its accounting application. “We feel it is extremely important to provide a total solution encompassing nonprofit accounting, donor management and payroll, which provides our users with a single solution and source for support for their critical back-office financial responsibilities,” Scarano told us. “Payroll is especially important since we provide the ability to allocate employees’ salaries and payroll taxes to multiple programs and grants, and there is seamless integration and posting of detailed payroll data from payroll to accounting.”

And Red Wing’s Hilton noted that while they do not offer CRM or donor management, they do offer payroll: “Red Wing Software offers CenterPoint Payroll, which can be seamlessly integrated with CenterPoint Fund Accounting. In addition, RVS Utility Software has a direct interface to CenterPoint Fund Accounting.”

Another vendor offering ancillary software is GMS: “We offer Revolving Loan Servicing Software. Our RLSS is a perfect fit for a lot of our client base as organizations such as planning and development councils are nonprofit organizations that service clients/companies in need. Moreover, our two products are completely integrated,” Cassady explained.

Other vendors offer even more comprehensive applications. According to Aplos, their customers, regardless of size, still need a database for their people, an email platform, a website, a reliable online donation processor, a donation tracking software, and an event registration software in addition to their bookkeeping. “We decided to bundle our software so all accounting subscriptions come with the complete nonprofit management system,” Goetz said. He also mentioned that they have added online event registration and ticket sales and a website builder this year, as well as a complete donor management system and online donation processing that is included in every subscription.

And, for nonprofits that need it, both NetSuite and Serenic offer complete ERP systems.

Here, there, and everywhere

A number of vendors we spoke with indicated that they are completely cloud-based, including AccuFund, Aplos, Araize and NetSuite. Others, such as Serenic, GMS, Red Wing Software and Blackbaud, offer a variety of in-house, cloud-based access and hosting options.

Mobile access is also increasingly important to our vendors. Some, such as Araize, offer mobile access through a PC’s web browser rather than a dedicated iOS or Android app.

According to NetSuite’s Carey, “Mobile access is critical. NetSuite’s mobile app features easy expense reporting, call-logging and time-tracking in a mobile interface filled with mobile dashboard portlets and KPIs. Available for iOS and Android, the applications are designed with a mobile-first UI for key workflows, and support push notifications for time-sensitive actions.”

AccuFund also embraces mobility. “In this day and age, our clients demand mobile access,” Scotland said. “AccuFund has responded with a variety of mobile-access solutions. Our browser-based accounting solution, AccuFund Anywhere, allows users to manage their accounting on any device. AccuFund’s Soft Clock timekeeping app for tablets provides seamless integration with our Payroll System. Our mobile Work Order app allows in-the-field data entry for AccuFund’s Work Order component.”

Nothing can go wrong …

Machine learning, artificial intelligence and voice assistants are hot topics in the accounting profession. Oracle NetSuite and Blackbaud are all in. “With the Oracle acquisition of NetSuite comes tremendous ability to leverage the market-leading efforts of Oracle in the machine learning and artificial intelligence space,” said Carey. “Oracle delivers a pervasive approach to AI, embedding AI into its applications, and providing an AI development environment coupled with a world-class infrastructure to run specialized workloads.”

And Blackbaud’s Blanton added, “Blackbaud’s ‘Intelligence for Good’ approach combines big data, artificial intelligence, analytics and expertise. Our accounting solutions already include descriptive and predictive analytics, as well as ‘smart’ actions like automatic bank reconciliation. Blackbaud is researching several directions to encompass ML/AI within our product portfolio, including contribution analytics, accounts payable and fraud detection.”

Some, such as Serenic, are in the process of evaluating or implementing the newest technologies. “Microsoft recently announced the connection of Business Central to the Intelligent Edge so that on-premise customers will be able to benefit from a new level of AI potential. Serenic is assessing the value of this capability for our customers and market,” said Bleiker.

Araize is another vendor in the process of evaluation. According to Scarano, “We are exploring options to incorporate AI into our applications to make data entry easier for users based on historical data entered into the system.”

AccuFund is somewhere in the middle on this topic. Scotland said, “AI may seem like far-off technology for nonprofits, but it’s coming soon to a development office near you. AccuFund’s integration with Salesforce allows development officers to use predictive analytics to better understand the likelihood of major gifts, or the success of specific campaigns. For our accounting application, we have added intelligent automation to components and processes within AccuFund. It’s not quite AI, but it allows users to automate processes in exciting new ways.”

However, not all of the vendors we surveyed are as enthusiastic. Red Wing’s Hilton noted that they haven’t had any interest in this technology from their clients. And, according to GMS’ Cassady, “We currently do not have AI in our products as we haven’t experienced the need in the nonprofit sector for this capability.”

Nothing remains the same

Finally, we asked our vendors where they think the industry is going. GMS’s Cassady told us, “Nonprofit organizations have become very results-oriented regarding maximizing the services they provide. We see mergers between similar nonprofits to pool resources and maximize results in a region. They are also very conscious as to make sure their financial reports provide the most accurate picture of what a program costs the organization. They are still very budget-driven, because in a lot of cases there is a defined amount of funds they will receive through grants and awards, and not one dollar more. However, the line between budgeting and reporting is not as blurred as it used to be. Knowing exactly where they stand financially is now a critical issue.”

Aplos’ Goetz said, “The future is looking bright for nonprofit accounting. With increased adoption of the cloud, it is increasing the ease of tracking accounting in multiple locations, outsourcing to external professional bookkeepers, and connecting data with other software solutions. Rather than getting by with a small-business accounting software, more nonprofits are demanding customized, modern solutions that connect with their other management tools.”

And according to Brandy Keller, director of product management and product marketing at Community Brands, a nonprofit software provider created from the combination of Abila, Aptify and YourMembership in 2017, “Increasingly, nonprofit finance professionals are looking for ways to modernize their technology and leverage those tools to accelerate their missions and minimize time spent on accounting activities. Given recent changes in tax policy and an evolving donation landscape, reporting and transparency across organizations are becoming more important than ever.”

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