by Dave McClure
The opening years of the decade have been hard on not-for-profit organizations. Throughout the nonprofit world, levels of membership and participation have generally been on the decline as an older, more participatory generation of Americans yields to Generations X and Y. Individual donations have likewise declined, casualties of the reduction in discretionary income.
On the heels of this, the recession that began in 1999 seriously impacted corporate donations and in-kind contributions, forcing nonprofits to re-evaluate priorities, tighten up their accountability and focus more seriously on the fund-raising side of the business.
Ordinarily, events such as these would be important driving forces for the evolution and expanded use of vertical market products for fundraising and nonprofit organization accounting. But the market for these software products has been hit with its own competitive problem — incursions into their space by mainstream accounting software vendors.
With the acquisition of MIP by Best Software and American Fundware by Intuit, traditional vendors of not-for-profit tools find themselves up against the marketing clout of products such as Intuit’s QuickBooks for Nonprofits.
To survive, nonprofit vertical market software vendors will have to introduce additional specialty products to link with their core applications — products such as fundraising, client management, member management and event management modules. Even with these additions, though, experience in other markets indicates that today’s field of a half-dozen vendors could shrink dramatically in the years to come.
For 2004, Accounting Today reviewed six of the most-used accounting software programs for not-for-profit organizations. The six represent a cross section of capabilities, styles and pricing, though all have strong followings in their own right.
Financial Edge v. 7.2
Blackbaud’s product lines were created specifically to meet the accounting and decision-support requirements of nonprofit organizations in 45 countries. They encompass not only the Financial Edge accounting suite, but the Raiser’s Edge fundraising system; the Education Edge system for
independent schools; and the Information Edge system for executive data analysis. In addition, the company offers its extensive base of nonprofit clients such services as training, prospect modeling, technical consulting, Web-based fundraising and process engineering.
The Financial Edge differs from the majority of nonprofit accounting solutions in its focus on management support, as opposed to transaction management.
That is, it contains all of the standard modules of a robust, mid-priced accounting system (general ledger, accounts payable and receivable, payroll, cash management, fixed asset management, point-of-sale support and forms generation), but it’s oriented toward helping the managers of nonprofit organizations make better decisions, evaluate the performance of any sector of the organization, and provide for accountability of programs, projects and budgets.
Ultimately, all accounting software has this focus as its goal. But most packages leave the analysis and accountability to management, while focusing instead on recording and tracking cash transactions, collections, payments and costs. Blackbaud’s focus is on intelligence, to provide stronger strategic planning and budgeting tools, as well as the efficient allocation of resources; accountability, with both internal and external reporting support and strong internal controls; flexibility, through customization in rules, reports and forms; and efficiency in collections across multiple services and dimensions.
The move from version 6 to version 7.2, in addition to a name change, brings added functionality to accounts receivable, a new Web-based purchase order system, consolidation management across multiple databases, and the implementation of SQL Server as the program’s engine.
The enhanced accounts receivable system can separately track individual clients, organizations and funding sources. It offers billing of third parties, the ability to automatically apply payments from multiple funding sources to invoices, to apply one payment to multiple accounts, and to automatically calculate taxes and finance charges for invoices and statements.
The Financial Edge sports one of the best and most attention-grabbing user interfaces of any nonprofit accounting software suite, with left-pane navigation and clean data presentation organized into dashboard panels. Even these elements may be customized using Visual Basic or an optional modular Application Programming Interface.
With its integration into fundraising and executive decision support systems, Blackbaud’s Financial Edge is a first-rate accounting solution that was created for, and has served well, the nonprofit sector of the economy. Priced at mid-range, its feature set and flexibility make it a standout among competitors.
FastFund Nonprofit Software v. 2
FastFund Nonprofit Software is a well-crafted modular accounting system designed by CPAs with more than 20 years of experience in the nonprofit sector. A Windows-based application, the software sports an attractive, easy-to-navigate interface and straightforward functionality.
Though integrated into a single accounting solution, FastFund is actually three distinct products — a general ledger system with modules for accounts payable, accounts receivable and allocations; a fundraising module; and a payroll module. Each of these is sold separately, but together they are designed to provide full back-office functionality.
The general ledger easily handles the chores of logging receipts and disbursements, budgeting, reports, bank reconciliation and check-printing on either laser or dot-matrix printers. The ledger is organized into standard accounting functions — company data, a chart of accounts, lists (vendor, supplier, employees, etc.), transaction entry, activities and reports.
Flexibility is provided by user-defined account numbers for each program or grant, organized into segments for funds, multi-level cost centers, object codes and sub-accounts. Each segment can be up to six digits long. All FastFund modules comply with the requirements of FASB 116 and FASB 117, adhere to strict accounting principles and offer a detailed audit trail of all transactions.
The payroll module offers strong functionality and an alternative to expensive outsourcing of employee pay and benefits management. Its features include built-in tax tables for all states; calculation of taxes for employees; automatic accrual of vacation hours; calculation of after-tax deductions such as employee contributions to health plans, disability insurance premiums and donations; automatic payment of payroll tax liabilities; and payment via either computer checks or electronic funds transfers for direct deposits (with the optional direct deposit module).
The heart of the system may be the general ledger, but its soul is in the fundraising software. Here lies the capability to track donors, prospects, constituents, appeals and campaigns, as well as other key elements of fundraising, acknowledgment and accounting.
Integrating with either the FastFund accounting system or Quickbooks, FastFund Raising is a flexible and powerful engine that sets up a table of codes based on the user’s coding system, then handles the chart of accounts; funds, campaigns, appeals and gifts; prospect and donor lists; and cash, pledge or in-kind processing. The data is then processed into reports or exported for mail merging.
Araize offers a low-cost, integrated system for accounting and fundraising aimed at small to midsized nonprofits. The software comes with a free year of support and a money-back guarantee, but it is the program’s ability to make complicated accounting principles easy to manage that will impress accountants and their nonprofit clients.
Cougar Mountain Fund Accounting Suite v. 8.0
Cougar Mountain Software
Entry-level accounting systems may meet the needs of small, local nonprofits. But when the transaction load, the complexity of funding and the size of the organization begin to grow, they can quickly exhaust the limits of these programs in terms of accounts, funds and departments. That’s where a strong mid-range accounting program such as Cougar Mountain’s Fund Accounting Suite becomes essential.
Cougar Mountain has more than 20 years of experience in accounting software solutions, most of it in vertical markets where market expertise is as important as familiarity with general ledgers. Its Fund Accounting Suite incorporates general ledger and budgeting, payroll, accounts payable, bank reconciliation, purchase order generation, data exchange, inventory and the R&R Report Writer.
Fund Accounting Suite handles complex transactions, such as inter-fund transfers, fund balancing, financial reporting, and the ability to work in the current year plus two years forward for forecasting purposes.
It also offers exceptional audit capabilities, generating a clear audit trail as it automatically allocates costs to specific accounts or across funds using
either dollar amounts or percentages. And the ability to track assets and contributions that are restricted, temporarily restricted or unrestricted allows for the reporting required under FASB 116 and 117.
The user interface is a bit dated, but there’s nothing wrong with the straightforward navigation system or the presentation of data. The program is obviously designed to be an accounting workhorse, but offers some surprising features that significantly enhance its value — credit card verification for donations, unique check comments in the check printer, the ability to include pictures of merchandise in the inventory module, and the ability to carry negative GL budget balances.
If the reports that are available from within the suite are not sufficient, the included R&R Report Writer provides for customized reports as well as “what if” scenarios that can draw from different modules to provide a more complete planning view of the organization.
In addition to the accounting software, Cougar Mountain offers a range of Fund companion products that are of value to nonprofits. These include donor tracking; event tracking; volunteer tracking; membership tracking; and an accounting bridge to transfer the data into the accounting program.
Fully integrated and sporting strong networking capabilities. Fund Accounting Suite allows for an unlimited number of funds, departments or grants. It is software that is specifically designed for the needs of nonprofit organizations and government agencies that must balance multiple fund ledgers.
Its straightforward navigation, flexibility and accounting muscle make it an ideal upgrade path to make the move from inexpensive and limited accounting packages to a more robust nonprofit solution.
CYMA Not-For-Profit Edition v. 6.0
CYMA Systems Inc.
The CYMA Not-For-Profit Edition is a specialized version of the company’s Financial Management System for general business accounting. Version 6.0, introduced in October 2003, represents a major overhaul of the product that significantly upgrades the underlying SQL engine, incorporates Crystal Reports 8.5 and the F9 Financial Report Writer, and adds new functionality.
The accounting system is modular, and includes modules for general ledger, accounts payable, accounts receivable, bank reconciliation, job costing, payroll and purchase order management. Any combination of these may be installed, but must include a System Manager module for integration. The job-costing module requires the general ledger, and the purchase order module requires accounts payable.
CYMA’s NFP Edition is a straightforward accounting solution that features an attractive and easily navigated interface.
The critical functions of nonprofit reporting are handled “out of the box” via FASB 117-compliant financial statements written with Crystal Reports. These encompass a statement of financial position; a statement of activities; a statement of activities — year to date; a statement of functional expense; and a statement of cash flows worksheet.
The custom report engines provided handle additional reporting requirements. Additional flexibility is offered through the use of unlimited custom fields and 24-character alphanumeric account numbers, automatic offset and additional fund maintenance and balancing features, and an automatic fund balancing functionality to automate end-of-year closing.
The NFP Edition is also geared to deal with the special requirements of fundraising and allocations, including pledges receivables; inter-fund receivables; inter-fund payables; unrestricted, temporarily restricted and permanently restricted funds; cash and non-cash contributions; grants and contracts special event revenue; program expenses; fund raising expenses; and donated services and materials.
The most innovative part of v. 6, however, is the e-Desk — a Web-enabled desktop inside of the CYMA software interface that allows users to customize the user interface, link to other Web pages and to custom-created reports, and create shortcuts to other areas of the software. The e-Desk is unique among the accounting products aimed at the nonprofit market, and provides the kind of future flexibility that should count heavily among present and potential users.
The CYMA Not-For-Profit Edition is a value-laden product that handles the most common requirements of nonprofit accounting and reporting for an attractive price. It should particularly appeal to nonprofits on a tight budget, and those seeking to make the accounting chores less burdensome on their staff. The inclusion of the e-Desk is an innovation that bears watching for further development and integration, perhaps leading to a future Web-based accounting product.
Fund Accounting Software Series v. 6.0
Executive Data Systems
The Fund Accounting Software Series is a transaction-oriented accounting system designed to handle the fund accounting and reporting requirements of nonprofit organizations. Its core advantages for nonprofits are its speed, its smooth integration with Microsoft Office, and the company’s extensive experience in working with nonprofits of every size over the past 20 years.
The Financial Edge v. 7.2
FastFund Nonprofit Software v. 2
Cougar Mountain Fund Accounting Suite v. 8.0
CYMA IV Not-For-Profit Edition v. 6.0
Fund Accounting Software Series v. 6.0
Serenic Navigator v. 3.6
The software is relatively easy to install and use, though the user interface is dated and the menu-driven navigation is strongly utilitarian in design. That aside, the relatively gentle learning curve and straightforward presentation of transaction entry and reporting make FASS ideal for organizations that wish to spend more time fundraising and less time bookkeeping. Entry of transaction data is offered both through a standard graphical interface and an alternate character-based spreadsheet-style entry screen that may appeal to those more at home with the keyboard than the mouse.Organized around code tables, list boxes and stored reports, FASS offers an excellent balance between pre-formatted options and user-defined elements. During transaction entry, for example, it is easy to add new accounts or refer to list boxes for journals, funds or accounts. Transaction amounts may be automatically distributed to up to 36 different general ledger accounts. Account descriptions of up to 50 characters are displayed when account numbers are entered. And though the general ledger includes a strong report writer capability, FASS also offers user-defined statements of activities and functional expenses that may be more useful than traditional reports.
Financial statements comply with FASB 116 and 117, with funds automatically segregated into unrestricted, temporarily restricted and permanently restricted classes. Journals, ledgers and most financial statements can be reviewed on the screen, and FASS presents a clear audit trail for accountability. Though the reports are well designed and easy to comprehend, the OLE integration with Microsoft Word and Microsoft Excel are important assets of the FASS system. They allow for additional formatting and information presentation, and are particularly useful for outside accountants or directors who may be more comfortable with the data capabilities of these programs.
Integrated modules are offered for multi-fiscal year project reporting, accounts payable, accounts receivable, bank reconciliation, payroll with direct deposit, inventory management, purchase order management, fixed asset management and invoicing. A separate but integrated software program, Donor Records, handles the tasks that are associated with raising funds and tracking donors.
A mid-range accounting solution for nonprofits, Executive Data System’s Fund Accounting Software Series is a workhorse product that will meet the needs of accountants but will not bewilder the nonprofit’s staff. Its functionality, combined with OLE integration with Microsoft Office, make this a strong choice both for new nonprofit organizations and those who wish to step up to a more robust accounting solution.
Serenic Navigator v. 3.6
Serenic Software Inc.
Serenic Navigator is a comprehensive suite of revenue and expense management applications for nonprofits and government agencies that is built on Microsoft Business Solutions’ Navision platform. It is designed to enable organizations to manage an unlimited number of funds, automate transaction approvals, monitor budgets in real-time, and offer advanced tools for managing complex allocations.
Serenic Navigator also provides the ability to quickly and easily generate SFAS 117- or GASB 34-compliant financial reports while delivering powerful data inquiry and analysis functions through MBS Navision’s advanced filtering and drill-down technology. Reports can either be printed or published to HTML for publication on the Web. Core modules of the software include general ledger, cash management, payables, receivables, purchasing, requisitions, payroll, project accounting, time and billing, inventory management and fixed asset management.
A relative newcomer to the market for nonprofit accounting software, Serenic Navigator was first introduced in November 2000 and held its first user conference in May 2003. Version 3.6, introduced last year to bring the software into line with Navision 3.6, features a high-speed financial reporting engine for compliant reporting, a logical chart of alphanumeric accounts for improved productivity, and integrated e-commerce functions for remote user connectivity and business-to-business transaction processing.
Serenic Navigator has undergone a continuing series of enhancements since the 3.6 upgrade — most recently adding constituent management functionality for donor tracking, gift and pledge processing, and campaign management; and grant management capabilities for grant pre-award and post-award processing, including tools for automatic indirect cost allocations.
Use of the MBS Navision platform enables the program to maintain the most current interface capabilities of Microsoft Windows, as well as advanced navigation features. It is also highly scalable, which is critical to the needs of larger nonprofit organizations. And it allows for continuing growth of the product line through utilization of other Navision features such as customer relationship management, e-commerce and Web-based information sharing.
At a total price range of $25,000 to $75,000, depending on the number of users and specific functionality required by the client, Serenic Navigator is positioned at the medium-to-high end of the price spectrum for this vertical market.
But its flexibility, clean design and forward-looking design philosophy make this product one of the few that does not suffer from legacy programming quirks or a stale user interface. It is a fast-moving, complete accounting solution that should show strong continuing growth among the better-equipped and forward-thinking nonprofits.
Dave McClure is the president of Kent Associates, in Alexandria, Va., an independent testing labratory and evaluation service.
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