There are basically two categories of accounting software programs.
There is commercial or for profit and fund or non-profit accounting.
In spite of there being many aspects in common between the two categories, nonetheless there are important differences in accounting procedures, reporting requirements, and management objectives between the two types.
A non-profit organization must track its financial resources based upon regulations and restrictions.
Every non-profit must be treated as a separate entity which has its own general ledger and its own revenue, income, expense, and balance sheet.
If you manage a non-profit fund then it is necessary to match your accounting needs with available accounting software packages.
Accounting software designed for commercial business entities is generally not suitable for non-profits.
Good fund accounting software has to have been designed specifically with non-profits in mind, not merely be a commercial system with non-profit accounting overlays.
Another point to bear in mind is whether the software is a real time or a batch system.
Checking budgets and spending limits requires real time processing, which is faster and saves money and time by eliminating extra processing steps.
Another factor to take into account is whether a relational database is needed to store information.
Much project accounting software is sold on the basis of hype rather than real need; databases can add considerably to initial costs and the overhead of processing.
Open Database Connectivity software is much cheaper and faster than relational databases.
Another consideration is whether the software can deal concurrently with both cash and accrual basis funds.
For example, although a general fund may be on a cash basis, special sales may be based on accrual.
Another point to be wary of is whether the software can handle sufficiently large dollar amounts (say, numbers up to a billion dollars) and should not impose a limit on the number of funds, with the capability of paying invoices from multiple funds with a single check.
This capability can reduce the number of checks being written, and simplify bookkeeping generally.
If the non-profit has multiple checking accounts, then the software should be able to take this into account.
The accounting softwares should also provide project and grant tracking, to enable reports for different projects and grants to be produced according to the specific requirements and reporting periods dictated by various donors.
For non-profits which report to the government, it is necessary that the accounting software process encumbrances in real time.
Also, non-profits need to have revenue and expense reporting in addition to the usual reporting used by commercial entities, which depict the actual revenues and expenses compared to budgets.
Finally, the software should offer security - access to the application should be regulated by the user and program.
There is commercial or for profit and fund or non-profit accounting.
In spite of there being many aspects in common between the two categories, nonetheless there are important differences in accounting procedures, reporting requirements, and management objectives between the two types.
A non-profit organization must track its financial resources based upon regulations and restrictions.
Every non-profit must be treated as a separate entity which has its own general ledger and its own revenue, income, expense, and balance sheet.
If you manage a non-profit fund then it is necessary to match your accounting needs with available accounting software packages.
Accounting software designed for commercial business entities is generally not suitable for non-profits.
Good fund accounting software has to have been designed specifically with non-profits in mind, not merely be a commercial system with non-profit accounting overlays.
Another point to bear in mind is whether the software is a real time or a batch system.
Checking budgets and spending limits requires real time processing, which is faster and saves money and time by eliminating extra processing steps.
Another factor to take into account is whether a relational database is needed to store information.
Much project accounting software is sold on the basis of hype rather than real need; databases can add considerably to initial costs and the overhead of processing.
Open Database Connectivity software is much cheaper and faster than relational databases.
Another consideration is whether the software can deal concurrently with both cash and accrual basis funds.
For example, although a general fund may be on a cash basis, special sales may be based on accrual.
Another point to be wary of is whether the software can handle sufficiently large dollar amounts (say, numbers up to a billion dollars) and should not impose a limit on the number of funds, with the capability of paying invoices from multiple funds with a single check.
This capability can reduce the number of checks being written, and simplify bookkeeping generally.
If the non-profit has multiple checking accounts, then the software should be able to take this into account.
The accounting softwares should also provide project and grant tracking, to enable reports for different projects and grants to be produced according to the specific requirements and reporting periods dictated by various donors.
For non-profits which report to the government, it is necessary that the accounting software process encumbrances in real time.
Also, non-profits need to have revenue and expense reporting in addition to the usual reporting used by commercial entities, which depict the actual revenues and expenses compared to budgets.
Finally, the software should offer security - access to the application should be regulated by the user and program.