Finding the Right Cloud Based Accounting Software Solutions for Your Non-Profit
K2Enterprises provides education for CPAs in all areas of technology. I’ve taken a number of their courses over the past few years and find the instructors very knowledgeable and professional, and as a result, I am a happy repeat customer.
A two-hour webinar course last week on the topic of “Accounting in the Cloud – Compelling Alternatives to QuickBooks” was no exception.
I learned that the only problem was that, in the instructor’s experience, there aren’t any inexpensive alternatives that work well for all nonprofits. There are some options, but you have to weigh functionality against your organization’s need and budget. First though, what is cloud computing anyhow?
What is Cloud Based Accounting Software?
“The cloud” refers to a system of accessing software and storing data that does not reside on your local computer. Rather, the vendor maintains the software on their servers and stores your data there as well. Generally, you pay a monthly fee for both software and storage. SaaS is another term you might hear; it stands for software as a service. Let’s look at the advantages and disadvantages of SaaS, or cloud based accounting software.
Advantages of Using Cloud-Based Accounting Software
- You don’t need to pay an annual maintenance fee that covers updates. They are included in the monthly fee.
- Data recovery is easy, since you don’t store data from that program on local servers or computers.
- Data is not stored in one place, so it is much more secure from unauthorized use (i.e. hackers).
- Authorized users can access the software from any computer with an internet connection to process or view transactions and reports.
Disadvantages of Using Cloud Based Accounting Software
- You are at the mercy of the stability of the internet – if it’s down, you can do nothing.
- The speed of your connection is a factor as well, so organizations in rural areas or other places where internet service is slow may not be well-served.
- If you elect to use SaaS, you should have an exit strategy – that is, a plan for a way to get your data back when you decide to leave the service.
- Where both cloud and resident versions are available (for example, QuickBooks) you might be disappointed that the cloud-based version doesn’t have all the features you like.
Cloud Based Accounting Software Options
How can you know which accounting software solution is right for your non-profit, and whether cloud based accounting software that meets your needs is available? Here were the take away points from the webinar.
Accounting Software Solutions for Larger Non-Profits
Larger organizations, especially those that deal with temporarily restricted grants and donations, might not find a cloud based solution that fits their needs, but there are two accounting software programs you should look at- one is online, the other is not.
If you’re at a large non-profit with many millions in revenue every year, you should look at IntAcct. I took a tour a few weeks back and was very impressed. us.intacct.com
If you’re at a charity with temporarily restricted grants and donations and you want to account for expenses against them, there’s not yet anything in the cloud that will meet your needs, according to the instructor.
In his opinion, there’s one affordable software solution for nonprofits of $1-25 million or so, and that’s CYMA. I know this software and have recommended it to clients, so it was great to hear that he is of the same mind.
It has a great grants management module. You can enter a grant budget that will not get pulled into the organization’s budget, so you can track grant expenses against budget but don’t have to build each grant budget into the budget for the program it supports. If set up properly, its nonprofit version will close income and expense to programs and funds and update temporarily restricted net assets. It’s easy to learn, I find, and the trainers are very knowledgeable and good at what they do. www.cyma.com
Cloud Based Accounting Software as a Service for Small Non-Profits
So what is available out there that small nonprofits might look at? If you’re very small and don’t have to deal with the issue of restricted grants and donations, you can probably use one of the solutions I learned about last week.
It’s free. It integrates with 10,000 banks so you can download your transactions and code them once you’ve done that. It integrates with Wave payroll – for $5 per employee per month. If you need invoicing – for contract work performed or for donations you want to receipt or pledges you want to invoice, in integrates with Freshbooks. The class instructor uses it. www.waveapps.com
It’s $20 per month or $192 if you pay for a year. It allows you to import a trial balance. Reports include agings of both payables and receivables. In other words, it’s built for a bookkeeper or accountant who understands basic concepts and recording of transactions. www.kashoo.com
Built in New Zealand by an experienced CFO/chartered accountant and his business partner in other successful ventures, it integrates with PayPal and ADP for payroll. It’s got a financial dashboard and the entry is very simple, leading to fewer errors in data entry when the folks doing the work may not have the full picture of how what they’re doing fits into the accounting function. Its pricing is by company and ranges from $19 – $39 per month. www.xero.com
Enjoy the search!