How to Choose the Best Nonprofit Accounting Software

Nonprofit organizations strive to create meaningful change in their communities. To achieve their goals effectively, they require organized data, streamlined workflows, and affordable tools. Accounting software is one of the most valuable tools a nonprofit can have, as it allows team members to shift their focus from tedious data management to what truly matters: serving people and making an impact.

Understanding accounting needs for nonprofits

Bookkeeping, grant funding, payroll, taxes, audits—these are just some of the most common challenges that nonprofit organizations face on a regular basis. Beyond typical accounting functions, each type of nonprofit has unique needs that stem from their missions, operational structures, and funding sources. 

Let’s look at the similarities and differences between a few types of nonprofit organizations:

• Charities rely on donations, grants, and fundraising activities. All the information gathered from these must be tracked, managed, and organized in order to generate detailed financial reports.
• Faith-based organizations may have additional requirements, such as managing tithes, offerings, and special collections. They need software that can handle multiple funds and restricted donations, along with reporting capabilities.
• Community organizations focus on local initiatives and manage various programs, meaning their software must support program-specific budgeting, expense tracking, and reporting.

General accounting software often falls short in meeting these needs because it lacks key features and may not meet certain compliance regulations. However, software designed for nonprofits offers tailored features that ultimately save time and reduce errors. 

Key features to look for in nonprofit accounting software

Nonprofits benefit from accounting software that saves time, enhances efficiency, ensures compliance, and maximizes their impact. With that said, individuals working at one of these organizations should look for software with these features:

• Affordability and flexible pricing
• Security and compliance reporting
• Accounting automation
• Integration capabilities
• Robust documentation
• Responsive customer service

Affordability & flexible pricing

The bottom line is: Free accounting software is insufficient. However, great accounting software doesn’t need to cost an arm and a leg. 

Cost is always a factor, especially because nonprofits are often doing more with less, carefully allocating their limited budgets to maximize impact. Although free accounting software for nonprofits may appear as an attractive option, it comes with significant drawbacks. These solutions frequently lack the specialized features needed (fund accounting, donation tracking, compliance reporting, etc.), leading to an inefficient accounting process. Additionally, free software may not offer customer support or necessary integration capabilities. 

That’s why it’s worth investing in affordable, flexibly-priced software. For example, Accounting Seed offers scalable pricing that adapts to the size of your organization. With pricing based on factors like the number of users, ledgers, and extensions, the software can be tailored to fit a nonprofit’s needs and budget.

Security & compliance reporting

It’s crucial that sensitive information is protected. With Accounting Seed—built on the Salesforce platform—you benefit from world-class security features. These include robust API security, strong IT infrastructure, two-factor authentication, adjustable user permissions, audit trail functionality, and more. All Salesforce security features are inherently part of the product, ensuring protection for your nonprofit.

Accurate reporting is also a key feature for nonprofits. Organizations share their financial goals and achievements with key stakeholders, donors, grantors, or even those in their congregation. This helps establish trust and transparency with those who contribute to their funds.

Additionally, having nonprofit accounting software that helps to create industry-specific reports allows people to do their jobs more efficiently. Accounting Seed offers robust custom reporting capabilities that can be tailored to meet the specific needs of your organization. For instance, when it’s time to prepare the organization’s annual return, the custom reports can help to ensure all of the year’s data is precise and justified. 

Accounting automation

It’s common for the person who’s managing nonprofit finances to wear multiple hats—and that makes the month-end and year-end close hectic! Put more time back into your day with accounting automation. Accounting Seed’s main features are AR and AP automation. Let’s take a look at how these can help your nonprofit:

• Looking to enhance donor relations and financial management? AR automation streamlines the processing of donations and grants by automatically reconciling them to your bank account. This provides faster acknowledgment of contributions and enables efficient follow-up.
• AP automation boosts the efficiency of managing your expenses. Reduce manual data entry and minimize human errors through automating the processing of invoices, approvals, and payments.

Additionally, both AR and AP automation enhance the real-time visibility into your financial data. You can, for example, customize dashboards and reports to track outstanding liabilities and expense trends. Using these automation features will help you to maintain record accuracy and keep you on top of budget constraints and compliance requirements.

Accounting Seed in Action: Downtown Streets Team

One example of a nonprofit that has greatly improved its financial operations with Accounting Seed is Downtown Streets Team. By leveraging the power of accounting automation they save 48 hours every month, allowing them to focus more on their mission of helping those in need.

Their CFO, Marina Peterson, said, “I am so passionate about what we do at Downtown Streets Team. Homelessness is a complex and complicated issue that requires true dedication and operational excellence to help people rise above it. When I first started here, I wanted nothing more than to help reach as many people experiencing homelessness as possible—but I also knew we couldn’t do it without the right technology to support us.

“Accounting Seed has been a game-changer for us. It has helped us achieve real-time data, increase transparency and communication internally and with our funders, and decrease the time spent on daily, weekly, and monthly accounting needs—my bank reconciliation this month took only 30 minutes! We’ve also seen an improvement in data accuracy by 110%. In my opinion, the right technology partners make or break a nonprofit’s success, and Accounting Seed has been one of those partners that empowers us to do what we do best.”

Integration capabilities

Integrating nonprofit accounting software with other essential tools, like CRM and fundraising software, is crucial for seamless operations and data management. Salesforce connectors are particularly valuable because they enable users to connect to any Salesforce cloud application (e.g., Sales Cloud, Revenue Cloud, or Service Cloud). This ensures that all departments have access to real-time information, fostering better decision-making and more efficient workflows.

Accounting Seed offers integrations tailored for nonprofits with the Salesforce Nonprofit Success Pack (NPSP). Organizations can synchronize their financial data with donor and fundraising information, providing a 360-degree view of their financial health and donor engagement. 

Robust documentation

Knowledge is power, and robust documentation is a must-have feature because it empowers nonprofits to find answers quickly and troubleshoot issues independently. 

Accounting Seed offers a continually updated Knowledge Base, which serves as a hub of information to help users navigate the platform easily. In addition, we provide Live Webinars and Open Office Hours that allow your team to engage directly with our experts, ask questions, and gain clarity on how to use specific features. These resources, combined with our nonprofit accounting software, are incredibly beneficial for those who wear multiple hats at an organization, offering convenience and quick support.

Another way Accounting Seed makes using the product easier to use is with the Copilot AI feature. This AI tool draws from our Knowledge Base and other training material to answer your questions right in the platform as they arise and provides step-by-step instructions for how to use the software.

Responsive customer service

A friendly and responsive customer support team can help nonprofits quickly resolve technical issues, gain insights into best practices, and receive guidance on using the nonprofit accounting software’s features to their full potential. This level of service boosts user confidence while ensuring that the organization maintains smooth operations and stays compliant.

Hear firsthand from a nonprofit & Accounting Seed customer

Rick Funderburk, COO at Baptist Global Response (BGR), needed nonprofit accounting software that enabled his team to track donations efficiently while managing funds and project finances. BGR has up to 300 programs running at any given time, which is why a holistic view of their organization is vital. Rick attributes a lot of their success to Accounting Seed being an all-in-one platform. Because this software is built natively on Salesforce, all of their segmented audience lists (donors, churches, and volunteers), data, and reports are kept in one place. 

“Let’s say a donor wants to donate to a well that is being built in Zimbabwe. With Accounting Seed, we can apply that gift to that exact project, even to the point where we know all the statistics and details from project to donation and back. That helps us keep everything together,” said Rick.

Making the final decision

Now that you’ve learned some of the key features to look for in nonprofit accounting software, it’s time to see how these solutions can work for your organization. Accounting Seed offers a comprehensive suite of tools designed for nonprofits, enhancing financial management, transparency, and compliance.

By booking a custom demo with our experts, you’ll experience firsthand how Accounting Seed can be tailored to meet your unique needs and drive your mission forward.

Book your demo today, and take the next step towards optimizing your nonprofit’s financial operations.