Best Online Accounting Software for Nonprofits

However, modern technology has revolutionized accounting software for nonprofits. These platforms can provide features beyond those needed by regular companies, such as clear and accurate financial reports, automatic regulation compliance, and donation tracking.

Join us as we reveal key tips for finding the right solution, our recommendations for free online accounting platforms for nonprofits, and how to implement this software into your workflow.

While ease of use and scalability are key considerations with any software, certain online accounting features specifically benefit nonprofit organizations and should be prioritized:

It’s common for not-for-profit companies to receive general funds that can be spent however the organization sees fit, alongside restricted funds that must be used for specific purposes. Plenty of financial software offers fund tracking designed for nonprofits, keeping accounts separate and organized.

With limited and unreliable finances, nonprofits need to budget meticulously and can benefit hugely from digital tools that plan, track, and analyze projected budgets against actual expenditures.

There are plenty of solutions for nonprofits that aid in managing donors, fundraising, and bookkeeping. However, the accounting software chosen must integrate seamlessly with all your core software, from CRM to fundraising platforms.

Delivering detailed reports on how donors’ funds have been spent is essential for complete transparency. Nonprofit accounting software generates fund balance, income and expense, grant spending, and grant compliance reports, which are crucial for staying compliant with donor restrictions and regulatory bodies.

Charities and similar organizations rely on volunteers, and although this removes the hassle of payroll, there are still protocols to carefully follow. Accounting systems that track volunteer hours and expense reimbursement make administrators’ lives much easier.

Free accounting programs are certainly appealing to nonprofits, especially if funds are limited. While free budget software is a fantastic option, there are some downsides:

Free accounting software may be the way to go if all you need are the basics, like expense tracking, simple reporting, and budgeting tools. However, you should verify what you need, as advanced features like specialized reporting, donation management, and volunteer expense tracking are usually locked behind a paywall. With a freemium account, you may not realize until too late that additional vital features like integrations involve hidden fees.

There’s no need to rule out free or freemium subscriptions, but just keep in mind three crucial tips before signing up:

1. Data security: Up-to-date data encryption and security protocols are non-negotiable. The last thing nonprofits need is leaked sensitive financial information.
2. Integrations: Even if your company uses no other business software now, it will in the future. Ensure that your chosen solution integrates with at least CRM, donor management, and payroll platforms.
3. Scalability: A free account may work for you now, but you may want to scale up later, so ensure it’s possible to add advanced features.

Our best free accounting software for nonprofits recommendations are:

• Wave Accounting – one of the only genuinely free options available, highly accessible, with plenty of zero-cost features.
• QuickBooks Online – no free plan available, but the 30-day free trial is generous and packed with helpful tools.
• GnuCash – free open source software that’s highly customizable and supports fund accounting.

Once you’ve decided on your accounting software for a nonprofit organization, there are a few best practices to kick things off right.

Before using the new platform, ensure all important data, from financial reports to volunteer expense records, is backed up and carefully migrated into the new system.

Next, categorize restricted and unrestricted funds, expenses, and other data in a chart of accounts. This will ensure that everything is tracked and monitored accurately from the beginning.

Once the new workflow has been tested, it’s time to onboard employees and volunteers following a well-designed training plan. Getting this right from day one will save you time and hassle further down the line.

As you get to know the platform better, you’ll see how to best use automation. With charity accounting software, it’s straightforward to set up automatic billing, invoicing, and report scheduling.

After the rollout is complete and the software is fully in action, remember to periodically conduct internal audits to maintain accuracy and transparency in financial records. Keep checking in with team members to see how they find the new system and if any tweaks are necessary.

There may seem like too many online accounting solutions to choose from, but looking for nonprofit-specific features can narrow down the search significantly. Plenty of free and low-cost services, like Wave Accounting and GnuCash, can take care of core accounting processes for small organizations. If your company is scaling up and your demands are increasing, a Quickbooks Online or Xero subscription can unlock all kinds of advanced tools.

The best way to know which bookkeeping software is right for you is to test-drive various products using free trials and money-back guarantees. However, always look for specialized tools to guarantee that your not-for-profit needs are catered to.