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Five problems that great charity accounting software solves
A charity accounting system does not fail in one go. The signs build up: a spreadsheet that runs next to the ledger, a budget holder who emails you for a figure, a funder report that takes two days to pull together. Good software removes those jobs instead of adding to them.
Is your charity accounting software fit for purpose or creaking at the seams? Can it cope with everything you throw at it or is it past its sell-by date? Charity accounting software has improved considerably over the years, particularly in terms of integration into other systems to make it really powerful. To find out where your current system fits into the scheme of things, here are five problems it should address:
1. Allows stakeholders to see how funds have been spent
Trustees and funders want to know where each pound went, and you should be able to answer from the ledger without building a separate report. Income is tied to the fund or grant it belongs to, restricted and unrestricted money stay apart, and commitments show next to actual spend, so you can see how much of the budget is left. You can look at the total or drill down to a single transaction, and the figures change as transactions are posted.
Test it: Pick one restricted grant. Can you show a funder every pound received and spent against it, including orders not yet invoiced, in minutes rather than days?
2. Makes it easier for budget holders to keep projects on track
Budget holders should not have to ask finance how their project is doing. In the system they open their own budget, see what has been spent and committed, and spot a problem while there is still time to act. That replaces the notebook and the private spreadsheet, and it ends the sleepless nights before an event or project closes.
Test it: Can a project manager see budget against actual and committed spend today, without sending your team a request?
3. Helps the organisation unlock the untapped potential of its data
Your charity holds useful data in more than one place: the ledger, purchasing, expenses and the systems around them. When the accounting software connects to those systems, nobody copies figures between them by hand. Reports and dashboards draw on the same data, so trustees can have a one-page view and budget holders a detailed one.
Test it: How many systems does someone export from to build your board pack?
4. Provides confidence in the figures and reports
Every figure that someone rekeys is a chance for an error to get in. Fewer manual steps means fewer mistakes, and one central system means one version of the numbers. It also stops project leads from building their own spreadsheets because they do not trust the official ones.
Test it: Do two people in your organisation ever quote different figures for the same project?
5. Helps everyone to make informed decisions
When people trust the figures, senior managers, trustees and budget holders spend meetings deciding instead of checking numbers. Choices about which services to grow, which grants to pursue and where to hold back rest on current information, which helps the charity serve its community and the people who work or volunteer for it.
Test it: When did your trustees last make a decision using figures less than a month old?
If you recognised two or more
Start with our guide to the four signs it is time to change your charity accounting software, then read the four considerations before changing charity accounting software. The 8-step guide to choosing and implementing finance software covers the project plan. To compare packages by charity size and fund complexity, see the best accounting software for charities. For prices, see what charity accounting software costs.
| Area | Sign you still have the problem | What the software should do |
|---|---|---|
| Funds and grants | You rebuild a funder report by hand | Report income and spend by fund or grant from the ledger, with restricted and unrestricted money kept apart |
| Budget holders | People email finance for figures | Give budget holders their own live view of spend and commitments |
| Data | Board packs come from several exports | Connect to the systems around the ledger so reports share one set of data |
| Confidence | Two reports show different numbers | Cut rekeying and keep one central record |
| Decisions | Trustees decide on last quarter's figures | Put current figures in front of trustees and managers |
See the bigger picture with Access Financials
Access Financials is our cloud-based financial management software for not-for-profit organisations. Watch the short overview of charity finance management, or book a demo to see it with your own funds and projects.
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Frequently asked questions about charity accounting solution market
What problems should charity accounting software solve?
It should show trustees and funders how money has been spent, give budget holders their own live figures, connect to the other systems you use, produce numbers people trust, and give managers current information to decide with. Each of those replaces a manual job, such as a side spreadsheet or a request to the finance team.
How should charity accounting software handle restricted and unrestricted funds?
It should keep restricted and unrestricted income apart and let you report income and spend for each fund or grant on its own. Look for a record of what has been received, spent and committed against each restricted fund, so you can show a funder or trustee that the money went on the purpose it was given for.
How do I know if my charity accounting software is no longer fit for purpose?
Common signs are a spreadsheet kept alongside the ledger, budget holders asking finance for figures, the same number differing between reports, and funder reports that take days to assemble. If two or more apply, read our guide to the four signs it is time to change your charity accounting software, then the four considerations before changing it.
Can accounting software make sure our charity accounts meet legal requirements?
No. Software records transactions and produces reports, but trustees stay responsible for accounts that meet charity law and the Charities SORP. A charity regulator has warned that commercial accounting software does not always produce accounts in the format charities need, so ask your auditor or independent examiner to check the output.
What should budget holders be able to see without asking the finance team?
They should see their own budget against actual spend, plus commitments such as approved orders that have not been invoiced yet. With that view, a project that is going off track shows up while there is still time to change course.
Why does integration matter for charity finance?
When the accounting software connects to purchasing, expenses and reporting tools, nobody copies figures between systems by hand. That lowers the chance of keying errors and means dashboards and reports draw on the same numbers as the ledger.