As accounting consultants, we frequently hear about the inefficiencies relating to an organization’s accounting software and grievances from finance directors who resort to using Excel more than their accounting system. They track grant expenses to budget, restrictions, and reconciliations, and manually have to create the financial statements each month outside of their accounting system. Set aside the fact that it’s a painful process for them each month, there is also much more room for error when reports are manually created. One simple resolution is to let your accounting software do the work for you with the information in the system.
Another pain point we hear from finance directors is that they want a fund accounting software that can efficiently track grants to approved budgets and track restrictions on a real time basis. Putting in place a system that has these efficiencies allows finance directors to create accountability with program staff in directly managing the finances of their programs.
Last month, we talked about internal control policies, explaining how your accounting software should have effective internal controls that do not allow posting to prior periods, allow multi-user approval processes and establish notifications for actions that could place the organization at risk. These notifications should detect alterations such as new vendors, changes to vendor banking information, chart of account changes, etc.