Hand-pick your Nonprofit accounting software. A complete Guide.

Running a Nonprofit is different from managing a conventional business. Likewise, Nonprofit accounting is different from for-profit accounting. Managing unique revenue streams such as donations, membership dues, program revenues, grants, and investment income needs software capable of recognizing and accounting for it. In addition, an accounting solution that provides the highest levels of transparency and accountability is necessary to help your Nonprofit organization make reliable, strategic decisions and avoid violating the public’s trust.

Maintaining transparency with the acquired funds and how they are put into use could be a challenge, only if you fail to choose your Nonprofit accounting or fund accounting software correctly.

The key to Nonprofit accounting success starts with a clear understanding of the several elements of effective accounting procedures that focus on activities, opportunities, and decisions that preserve and strengthen its core mission. This article emphasizes the five factors you should consider before you purchase accounting software for your Nonprofit organization.


Commercial organizations work on big operational budgets, but that’s not the case for Nonprofit organizations. It should not be the deciding factor, but you should definitely consider the software’s cost and the value for money. You should see the initial price and the maintenance fee, upgrade expenses, and the cost of training for your staff. Do your research and choose the software that fits perfectly for your organization in the long run, rather than settling for a cheaper and non-beneficial package that can end up costing you more in the future. Replacing and updating your old accounting solution with a convenient, best-in-class accounting solution built for Nonprofit organizations can cost less than you think and can save you time and resources.


Nonprofit accounting is different from commercial accounting in certain aspects. So, it’s better to choose accounting software with all the features that help you run your Nonprofit accounting smoothly. Prior, you need to understand the complexities in your accounting, how fast your organization is growing, and the functionalities your accounting will need in the future. Grant and project management capabilities and tools to manage and forecast budget are essential features you should look for.


Integration with third-party business management applications such as CRM, payment applications is very crucial. For Nonprofits like associations, clubs, and societies having an online member portal that integrates well with the accounting system is an added advantage. It enables members to pay their dues, view their profile information and history, and other functions. This allows the organization to reduce the cost to service members while at the same time, providing convenient online and mobile access to account information.

Reporting and Budgeting

The Nonprofit accounting software you choose should have multi-dimensional reporting capabilities and features to produce quality financial reports that meet your organization’s unique reporting needs and are accurate and sophisticated enough to pass regulatory and audit criteria. Features to project budgets over time and effortlessly generate multiple budget scenarios to examine different assumptions and projections without using spreadsheets are very essential.

Audit trail

The Nonprofit accounting software you choose should allow you to easily access your financial documents and transactional data on the go. This will allow your accountants to work their magic on your financial data from the general ledger and deliver a transparent audit trail. Options to manage every fund or project in a separate ledger can be a game-changing audit trail feature if your organization handles multiple projects.


The most crucial aspect to consider in choosing your fund accounting is security as you are dealing with business-critical financial data here. The security modules in place, data server location, and protocols to limit access to financial data for non-accounting professionals are essential questions you should seek answers for. Choosing cloud-based accounting software can solve one-half of the security problems as every cloud hosting services are tightly secured. Adding to it, small Nonprofit organizations are tight on money with no fixed office space and have employees working remotely. So, cloud-based software could be the perfect fit.

Accounting Software, fund accounting, Nonprofit Accounting