I do not necessarily agree with the advice from the respondent who
recommended that you not "use the software developed by various companies
designed for hospital, university, school, large museum not for profits."
While some of the concerns about the suitability (i.e. "overkill") of
such software for very small not-for-profit organizations are valid, I
believe that you should weigh those concerns against the disadvantages
you would encounter by using "a regular small business commercial
accounting program."
You indicate that, while your budget is relatively small, you do have
four funds and 30+ departments. This creates a level of complexity that
small business software systems may not adequately handle. I believe
that you would find a fund accounting software package an advantage,
especially in helping your staff to maintain cash control and
accountability (especially between funds), to accurately record interfund
transactions, and to maintain the various funds in balance, all common
problems I have encountered in small not-for-profit organizations.
You did not mention how you handle payroll or whether or not you have an
active development (fundraising) program. These are both important
issues that should be considered when searching for accounting software.
If you prepare your payroll in-house, then you will want to carefully
evaluate the payroll component of any software you consider, especially
the level of support you can expect from the software vendor to keep the
withholding tables up to date and accommodate any other changes that will
occur. The ease of integration of the payroll component with the general
ledger should also be considered as well as the ease and ability to
obtain necessary reports for tax reporting, employee benefits
administration, and other voluntary deductions. For a small
organization, use of a commercial payroll processing company may be more
cost effective, and much less stressful, than in-house payroll
processing.
If you have an active development program, either, or both, current and
deferred giving, you should consider a donor/gift recordkeeping system
that integrates with your accounting software to eliminate any duplicate
recordkeeping and insure that the two systems are always in agreement.
You will probably not find any small business commercial software
accounting programs that will do this which is another reason to look at
fund accounting systems.
The cost of fund accounting systems varies greatly. The largest such
software system I have worked with originally cost $500 thousand and was
substantially modified at additional cost. Yet, I know of at least one
fund accounting software system that will integrate with another vendor's
development system for less than $5 thousand for both.
In the September 1994 issue of The NonProfit Times, you will find an
article beginning on page 21 that describes some of the current fund
accounting systems on the market today. You may find this article to be
especially helpful. Other sources of information on non-profit
administrative computer systems are the Chronicle of Philanthropy and the
Chronicle of Higher Education.
Good Luck!
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