Running a nonprofit can be difficult on its own. It doesn’t help that nonprofits often deal with intense accounting regulations. Moreover, they must meet very specific accounting rules and regulations. This often makes nonprofit accounting both overwhelming and challenging. Private donors and grantors place some difficult restrictions and requirements on nonprofit accounting and reporting. To make things more difficult, the government is very involved in regulating nonprofit accounting by telling them what they can and can’t do. However, there is a way out of this overwhelming mess. Nonprofit accounting software, like QuickBooks accounting, help nonprofits easily follow governments rules and regulations. It also helps them keep their books in check. Here are some challenges that nonprofit accounting faces and how nonprofit accounting software can make these challenges disappear.
Staffing
Hiring can be a difficult task for any company, but it seems to be harder for nonprofits. When hiring an accountant, nonprofits have to make sure that they know the ins and outs of the rule and regulations of nonprofit law. This can be almost impossible to find which leads to nonprofits having to hire multiple accountants. Having multiple accountants not only costs the organization more money, but also can result in more errors. However, nonprofit accounting software can help make the hiring process easier. With QuickBooks accounting software, there is only need for one accountant that moderately knows nonprofit law. This not only cuts the amount of people on payroll, but also lowers the chance of errors made. Moreover, it also ensures that information is entered on-time.
Cash Flow
The only way an organization can keep up and running is with cash flow. Without cash flow, nonprofit organizations cannot achieve their missions. However, cash flow poses as one of the most difficult challenges that a nonprofit faces. It is extremely important for a nonprofit to manage their cash flow both efficiently and effectively. The amount of money flowing in and out of the organization affects the organization’s programs and even restricts expansion. Managing the cash flow of a nonprofit organization is both difficult and important. It often takes up a lot of time to manage the cash flow correctly. Luckily, nonprofit accounting software can take the reins in managing the organization’s cash flow. Additionally, it allows nonprofits to focus on their main goals and missions.
Grant Tracking
Nonprofits often juggle multiple grants from several different sources. This makes managing and keeping track of these grants a very time-consuming task. It can be difficult to keep track of all the grants collected and how often they are collected. Nonprofit accounting software helps keep track of when the organization uses grant money and what they use that money for. It is critical for the organization to stay on top of this in order to ensure that they won’t lose future grants. However, with the help of nonprofit accounting software this is no longer considered an endless, time-consuming task. This software keeps track of all things involved with grant tracking. It also keeps track of when grant money is used and what it is used for. Thankfully, this makes a nonprofit accountant’s job easier. Moreover, it helps ensure that all grants are taken care of and running smoothly.
Managing Payroll
Employees want and need a paycheck, even when working for a nonprofit organization. It’s important for nonprofit organizations to understand how to run payroll efficiently themselves. If not, then they need to consider hiring a third party to run payroll for them. Thankfully, nonprofit accounting software comes with the capability of handling payroll. This means that the same person running the software also handles payroll, eliminating the need to hire another person. Software such as QuickBooks helps save your organization money and time.
Pledge Tracking
Pledges account for a large amount of charitable giving and large donations, making it difficult for nonprofits to keep track of pledges. For example, keeping tracking of what has already been paid, what has been pledged, and what needs to be paid is a complicated task for most nonprofits. However, nonprofit accounting software helps track these pledges. The software alerts you with pledge reminders to ensure that you stay on top of your pledges.
These five nonprofit accounting challenges are just the tip of the iceberg of what nonprofits deal with. Constantly dealing with setbacks due to regulations and requirements, makes achieving goals difficult, especially for nonprofits. This makes it important for a nonprofit organization to keep their bookkeeping in check. It also ensures that they properly do their job. Instead of hiring multiple accountants that don’t know the ins and outs of the nonprofit accounting world, hire one account that can properly run nonprofit accounting software. This software helps ensure that your nonprofit organization runs smoothly and that your finances stay in check. If your nonprofit organization is struggling with bookkeeping, check out nonprofit accounting software from QuickBooks to help ease the challenges that nonprofits face.
