The general consensus in the industry is that accounting software is accounting software. While there are different bells and whistles, the underlying processes are the same whether the entity is a professional practice or a retail store. Sure, there are plenty of vertical packages available to more comfortably accommodate specific kinds of businesses, but for the most part, you can use pretty much any full-featured accounting system and make it work.
That generalization comes to a screeching halt when the entity is a nonprofit.
The problem is that "nonprofit" is such a general term, and encompasses entities as diverse as educational institutions, religious institutions, charitable organizations, volunteer fire departments and ambulance corps, and government entities such as municipalities.
To muddy the waters even more, each nonprofit can have quite different sources of revenue, different restrictions on how money can be spent, funds that often operate on a fiscal year different from that of the entity, and differing reporting and allocation requirements.
Budgeting in many not-for-profits is also frequently a major task. In many for-profit entities, budgeting may drill down to the departmental or even product level. In many nonprofits, the budgeting process may be even more granular, with budgets in different funds and grants stretching along completely different timelines.
Recognition of revenue and expenses can also be grossly different in a nonprofit. Grant and encumbrance requirements may require different methods of allocation and reporting, and transparency in most nonprofits is also a major requirement.
All of this makes selecting an accounting system for a nonprofit a nontrivial task. What works well for one type or size of entity might be a poor fit for another. Some nonprofits do quite well with a standard full-featured accounting system that has been tuned to accommodate basic nonprofit requirements. QuickBooks Premier Nonprofit Edition and Traverse Not-for-Profit are good examples. Both of these build off of a robust general accounting system.
A nonprofit with more complex requirements might be better served with software that's designed from the get-go for a nonprofit entity, and sometimes even for a specific type of nonprofit entity. Many municipalities fall into this category.
Finally, when selecting an accounting system for a nonprofit, keep in mind that connectivity to other applications may be an important decision point. In many nonprofits, donor management and customer relationship management are mission-critical applications. While many systems can import data from a different vendor's offerings in this area, it's almost always going to be easier for your nonprofit client if they can build an overall system from the same vendor's modules.
PUTTING THEM TO THE TEST
To help in the selection process, we tested seven popular accounting packages for nonprofits. For each package, we installed the software (where required), and performed many of the functions available using the sample client provided by the vendor. Where available, we tested different filtering and report formatting options, as well as looking at the available output formats.
Our testing was performed using a Lenovo X200s running Windows XP Professional, a typical business-class laptop. Between application installations, we used Lenovo's restore feature to bring the laptop back to factory-shipped status, completely wiping the hard drive and re-installing the operating system.
Several of the applications that we tested are Web- or host-based. With these applications, we used either the default Internet Explorer provided by Windows, or client software required by the vendor.
Finally, keep in mind that most of these applications are not intended for the client to self-install. Many of them are available only through the reseller channel, so while we did find that several of the installs were either time-consuming or problematic, your client will have the reseller dealing with these issues, not themselves. Purchasing through this channel also impacts the prices quoted in the vendor information box, as the pricing range and model provided by the vendor does not include the value-added services provided by a reseller, which can be substantial depending on the size and complexity of the installation, the training required, and other factors.
AccuFund actually has two lines of its AccuFund Suite, one for nonprofits and another that's specifically targeted to governments that includes modules for taxing and utility billing, functions that are not necessary for nonprofits. We tested the AccuFund Suite for nonprofits.
AccuFund provides a core system with eight modules that handle user security, general ledger, financial reporting, budget reporting, accounts payable, cash receipts, bank reconciliation, and a forms and reports generator. Another dozen modules can be added to expand the system with functions such as grants management, allocation management, and more.
The software is available both as an in-house system and as a hosted application, which is the way we tested it. The hosted solution relieves your client of the bother of backups and upgrades, as well as lessening the hardware required.
AccuFund Suite provides all of the features that you would expect from a mid-range nonprofit accounting system. It supports multiple fiscal years to enable projects, encumbrances, grants and the like that don't run a single compatible fiscal year with the nonprofit. A 255-character alphanumeric account structure allows an exceptionally complex chart of accounts if required, and you can build new accounts on the fly, which is handy when creating new allocation or budget accounts.
Budgeting is particularly powerful, and while the application provides a usable array of standard reports, it's easy to build ad hoc reports and customize forms like invoices using the forms and reports generator. This module allows you to just pick available fields and drop them onto a report. On the report itself, you can drag and drop report columns to change the presentation.
AccuFund provides a good start with its core modules, but many nonprofits will need to add one or more of the optional modules to get a truly workable system. The allocation module is one that many NFPs will require, especially if they have moderately complex direct and indirect expense situations. Other optional modules, such as requisition management, may not be necessary, but are nice to have, so it is possible to drive up the price for the total system quite a bit if your client goes for all the bells and whistles.
CMS PROFESSIONAL FUND
Cougar Mountain Software has been offering accounting software for more than two decades. Its nonprofit software was one of the first products out the door, and the vendor's POS applications are highly regarded. This makes CMS Professional Fund a good choice for small and midsized NFPs that have a retail component, such as an outlet or Internet store.
Professional Fund is modular, allowing your client to buy just the components that they need, or the entire suite, which consists of GL, AP, purchase order, payroll, and bank reconciliation. Optional modules include point of service, a GL report generator, NFP fixed assets, and a PDF blaster, a report add-on that allows your client to produce reports in PDF format. A very basic system, including just GL and bank rec, is an affordable alternative for smaller NFPs with more limited budgets and needs. While the GL report generator is an option, many users will find the standard collection of reports, which offer filters for customizing, quite satisfactory. The GL report generator will come in handy if your client has to frequently generate ad hoc or custom reports.
We tested CMS Professional Fund on a hosted system, so we can't comment on installation. In the past, we have installed CMS Accounting, and had no problems performing the install. Cougar Mountain offers Professional Fund as a turnkey system, with an Applianz network server and multiple seat user licenses. This is a perfect solution for those clients that want to be up and running quickly - just unbox the server, plug it into the network, install the Applianz client software on the workstations that need access, and go.
Using Professional Fund is pretty much like using most other NFP applications. CMS Professional Fund has a very workable user interface, and can accommodate multiple funds, grants and encumbrances that stretch over differing fiscal years.
Where CMS Professional Fund is particularly strong, however, is in its ability to handle sales and inventory, an important feature for those NFPs that operate in these areas. This is largely accomplished through add-on optional modules - the POS module, and the Fund Revenue Center.
THE FINANCIAL EDGE
Blackbaud has long been known for its donor management application, the Raiser's Edge. In recent years, it has substantially expanded its offerings to nonprofits, adding Information Edge (business intelligence and direct marketing), Blackbaud Analytics (predictive marketing and wealth identification), the Education Edge (for schools), and of course, the Financial Edge accounting system. Blackbaud's recent acquisition of Kintera gave it some serious muscle in Internet-based services, including Sphere e-Marketing.
Obviously, the Financial Edge works seamlessly with Raiser's Edge, so if your client needs heavy-duty donor management, they can perform one-stop shopping at Blackbaud. And Financial Edge doesn't give anything away to its competition. It provides all of the grant and project management functionality most NFPs will need, and can easily create reports at the project level to satisfy auditors and donors that funds are being used as intended.
Financial Edge runs on top of Microsoft SQL Server, including SQL Server 2008. We tested the application using SQL Server 2005 Express, and experienced a quick and painless installation, though this task would usually be performed by a reseller.
Once installed, the Financial Edge is easy to use. Clear navigation paths are accessed through a left-pane Windows Explorer-like user interface, and many areas of the application are capable of presenting data in a dashboard format so that the data is easily understood. The Raiser's Edge uses a similar user interface, so those of your clients who may already be using the Raiser's Edge should have little trouble operating the accounting system.
The Financial Edge also offers an exceptionally large array of options, which makes it easy for your client to configure a system that more closely fits their needs and budget.
At the same time, the core system provides excellent usability, especially in the area of reporting. This makes the Financial Edge a good bet for those of your clients who are likely to need scalability.
QUICKBOOKS PREMIER NONPROFIT EDITION
When you think of entry-level accounting software, Intuit's QuickBooks is one of the first names that comes to mind. In terms of units sold and used, it is probably the most popular accounting application ever marketed, and many smaller nonprofits have been using QuickBooks for years. In fact, many employment ads for bookkeepers at these entities specify QuickBooks experience.
This fact was not lost on Intuit, which introduced industry-specific editions of its higher-end Premier Edition several years ago. This is reflected in the installation of Premier, in which you can select what edition you want installed (generic, Accountant's Edition, or industry-specific edition).
The Nonprofit Edition basically formalizes some of the kludges that nonprofits have been employing to use the generic version, using the departmental capabilities as funds, providing charts of accounts that are boilerplated for generic nonprofit set-ups, and adding some basic donor management features in the revenue recording and reporting areas. In addition to the Nonprofit Edition offered by Intuit, Intuit's Developer Network offers hundreds of upgrades and add-ins that further extend the Nonprofit Edition's capabilities and functionality.
None of this is meant to imply that the QuickBooks Nonprofit Edition is a mashup of bits and pieces, held together with baling wire - only that there are some areas, such as advanced budgeting and allocations, where the Nonprofit Edition may not meet your client's more complex needs.
In the much larger "plus column," QuickBooks Nonprofit Edition will often be a great fit for some of your smaller nonprofit clients. It is exceptionally easy to install, and the screens will be familiar to anyone who has even basic QuickBooks experience, which is a big benefit for smaller nonprofits that often rely on volunteer help and have a large turnover.
QuickBooks Premier Edition, on which the Nonprofit Edition is based, has excellent connectivity with Microsoft Office applications, including Outlook, which provides some strong donor management capabilities. Additional (and optional) QuickBooks applications such as credit-card processing let your nonprofit clients accept donations over the phone and through the Internet. Donor-oriented reports, including a Donor Contribution Summary Report and Biggest Donors/Grants Report, help focus your clients' fundraising efforts.
And because the Nonprofit Edition is based on QuickBooks Premier 2009, the improvements Intuit has made to the underlying application - including improved online banking, reporting, and the availability of a "Live Community" where your client can question other QuickBooks users in real time - are all available in the Nonprofit Edition. And if your client needs more user seats than the Premier Edition offers, the Nonprofit Edition is also available in Intuit's QuickBooks Enterprise Edition as well.
SAGE MIP FUND ACCOUNTING
Sage's MIP Fund Accounting 10 was the only product that stumped us during the install. That's the bad news. The other piece of bad news was that the problem was our fault - we checked the wrong box in the SQL authentication rules. That's not really Sage's fault. The MIP product runs on top of pretty much any version of Microsoft SQL, and SQL is often a bear to configure, especially if you don't work with it frequently.
The good news is Sage MIP's terrific customer service, which had us up and running quickly. As with most of the products here, the Sage reseller is likely to install the software, and they will know exactly how to configure SQL.
Once we got past the install, using MIP Fund Accounting was a breeze. The user interface is attractive and very easy to navigate. Sage has more than two dozen modules available for MIP Fund Accounting, so it is pretty easy to build exactly the system that your client requires for their situation. In turn, this not only lets your client save on modules they don't need, but makes the system a bit easier to use since the interface isn't cluttered with extraneous modules. And, of course, the system can be upgraded in the future if your client's needs change.
MIP Fund Accounting is solidly mid-range, and can accommodate a very wide range of NFPs, from small to enterprise and multinational, though it may be too expensive for very small clients. It's easy to set up allocations, grant rules and budgets, and a powerful report writer lets you modify the nice selection of standard reports, or produce ad hoc reports.
One of the new features in the latest Version 10 release is the availability of the Visual Analyzer. This optional module is a useful business intelligence application that allows the management to create dashboards that display the data that is important to them for day-to-day and long-term overseeing and planning.
While these dashboards present data in easy-to-understand summary and graphic formats, an authorized user can drill down all the way to the source data. Given the usefulness of this feature, the Visual Analyzer module is one that most MIP users will want to add.
Serenic Navigator 5 is a suite of software products that are built using Microsoft's Dynamics NAV as the underlying foundation.
In addition to the Navigator accounting system that we tested, Serenic also provides AwardVision, which extends the award-tracking and accounting capabilities of Navigator 5; DonorVision, a companion donor management application; applications for municipalities and ministries; and payroll and investment applications. Additionally, many of the third-party add-ons that have been developed for Dynamics NAV will work with Navigator 5, though the major structural changes that Serenic has made to the underlying Microsoft product to make it more suitable for the types of transactions that take place in a not-for-profit entity may not be compatible with some add-ons.
We tested Serenic Navigator 5 in a hosted environment, so we can't comment on ease of installation, though it is very likely that the reseller that your client purchases the product from will perform this task.
Navigator 5 is a high-end accounting system, and as such, has all the features that you might expect. It's easy to set up grants and funds, and rule-based allocations can be fairly complex, as can due-to/due-from entries. The suite includes 31 modules, so it should be able to accommodate almost any of your nonprofit clients. Dynamics NAV is a multicurrency application, so Serenic Navigator 5 also has this capability, making it a good choice for NFPs that operate internationally.
One feature that impressed us is the "Workflow with Approvals." Navigator 5 lets the administrator set up rules for how different types of transactions are handled, and, where necessary, which management needs to approve a transaction, such as requisition, before it can actually be implemented. This provides a powerful level of control and accountability, necessary in these days of increasing transparency and scrutiny.
Microsoft has announced and started to ship Version 6 of Dynamics NAV, and Serenic expects to also start shipping a new version of Serenic Navigator by the end of the summer. There will be some additional features, but the major upgrade is in the user interface. Navigator 6 employs a feature called "user roles" where the administrator can precisely tailor what an individual user sees in the system in terms of available tasks. For example, an accounts payable clerk doesn't need to see payroll, fixed assets or many other aspects of the overall system. By limiting their "view" to the tasks that are applicable to their job responsibilities, the "role" approach considerably simplifies usability.
Of course, managers with more far-reaching responsibilities can be allowed to have access to more, or all, of the system if warranted. It's a nice approach, and should be very popular with Serenic users.
Traverse Not-for-Profit 10.5 is based on the Traverse accounting application that Open Systems offers in several industry-specific editions. As with Intuit's QuickBooks, the underlying application is the generic accounting system, with features designed to make it easier to use in a nonprofit entity selected during the initial installation. Traverse is solidly a mid-level accounting system, designed to be used by fairly large entities and enterprises, so it might not be the best solution for some of your smaller NFP clients. On the other hand, Open Systems makes the source code available without extra charge, so your client can hire a programmer to make custom changes.
Traverse uses Microsoft SQL Server as its underlying database on the server side and MS Access on the client side. This makes installation a rather complex and time-consuming task compared to some of the other applications we looked at. As the installation will most likely be handled by a reseller, this will probably not be a major consideration, though we found the installation directions very well-written and, if somewhat time-consuming, well within the capabilities of many clients that may want to undertake this task themselves. Not-for-profit functionality is turned on by a single software switch in the "business rules" settings.
Once installed, the system has a chart of accounts mask that lets you easily set up funds, programs and grants, and break out funds into unrestricted, temporarily restricted and restricted categories, and can automatically create the due-to/due-from entries to transfer funds from one category to another.
Traverse NFP also provides a small, but useful, selection of NFP reports, can handle complex allocations, and can produce FASB 117-compliant and cross-fiscal-year reports.
Open Systems does not provide donor management software, but Traverse NFP has very good import capabilities and can import from Raiser's Edge, Donor Perfect, Paradigm Fundraising and a number of POS applications, and can directly interface with the Microsoft Office Suite applications.
A new version, Traverse 11, is in the works and should be available shortly after this review is published. It has pretty much the same feature set, but a slightly different look. The biggest feature of the upcoming version is that it runs on .Net and SQL framework, which should improve performance, especially with high transaction loads. That's an important plus when Traverse NFP is installed in a larger nonprofit.
Ted Needleman is senior director of the Technical Services Division of Industry Analysts Inc., an independent market research firm and testing laboratory. He was previously the editor-in-chief of Accounting Technology, and writes frequently on software, hardware, and technology-related subjects.
400 Hillside Ave.
Needham, Mass. 02494
Pricing: Single user - starts at $3,000. Hosted - starts at $389 per month.
CMS Professional Fund
Cougar Mountain Software
7180 Potomac Dr.
Boise, Idaho 83704
Pricing: Starts at $5,000.
The Financial Edge
2000 Daniel Island Dr.
Charleston, S.C. 29492
Pricing: Modules - start at $2,000.
2632 Marine Way
Mountain View, Calif. 94043
Pricing: Single user - $399.95; three users - $1,099.95.
Sage MIP Fund Accounting
12301 Research Blvd., Bldg. IV, Ste. 350
Austin, Texas 78759
Pricing: Varies based on number of users; starts at $3,000.
7175 W. Jefferson Ave., Ste. 2500
Lakewood, Colo. 80235
Pricing: Modules - start at $3,000.
Open Systems Inc.
4301 Dean Lakes Blvd.
Shakopee, Minn. 55379
Pricing: Single-user modules - start at $1,650.
(c) 2009 Accounting Today and SourceMedia, Inc. All Rights Reserved.
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