Most nonprofits start small—small offices, small staff, and an entry-level accounting solution like QuickBooks to take care of basic bookkeeping tasks. That approach makes sense at first, but what happens when your nonprofit grows?

Just as you might find that you need more office space and more staff, you’ll likely find that the small-scale accounting solution you started with is no longer sufficient.

Here are four signs that your nonprofit has outgrown its current accounting system and needs to upgrade to something more robust, like Sage Intacct, the industry-leading cloud financial solution.

    1. You’re Forced to Create Workaround
      The inherent limitations of entry-level accounting solutions force growing nonprofits to create awkward and complex workarounds. For instance, QuickBooks only allows you to create basic general ledger accounts, paired with a single “Class” designation. That means you’re forced to use that one account dimension for multiple types of designation.Faced with that limitation, many nonprofits devise a workaround: They take some of their accounting off the books and maintain it in lots of complex offline Excel schedules. The problem is that workarounds like this one end up complicating reporting and budgeting and can lead to errors and oversights.
    2. You’re Struggling with Transparency and Accountability
      The limitations of entry-level accounting solutions make it challenging to provide the deep levels of transparency and accountability that funders and constituents increasingly expect.For example, it can be difficult to impossible to measure, monitor, and report outcome metrics, such as program efficiency, that encourage new and continued funding. Only more advanced accounting systems will give you the visibility you need—while also automating the process and allowing you to customize as needed.
    3. Your Audit Trail Is Hard to Follow
      As your nonprofit grows, it becomes increasingly vital to maintain a clear audit trail, which can be difficult to do with entry-level accounting solutions. One example of a trouble spot is that some editions of QuickBooks allow users to configure the system to make after-the-fact corrections—meaning that a staff member could accidentally (or on purpose) alter financials without backup.If you’ve dealt with a mistake like that, or have rising fears that similar issues could arise because you don’t have adequate controls and a well-established audit trail, it’s a sure sign that you need to upgrade your accounting system.
    4. Manual Tasks Are Adding Up
      When your nonprofit is small, the effort to automate all your systems might not be worth it. But as the number of manual tasks adds up—and up—it’s time to weigh the long-term benefits of automation.If, for instance, you manually create budget reports using Microsoft Excel, you might find that it requires hours of time every month that could be better spent on mission-critical activities. Plus, manual work introduces a high risk of human error, which can lead to even more work down the line.

Find the Right Solution for You

The Sage Intacct experts at Michaud Accounting Solutions specialize in working with nonprofit organizations and can help you weigh the advantages of transitioning to a more advanced financial management system. Contact us for insights into the leading cloud-based accounting software and how we can help your nonprofit grow more efficiently.