All businesses and organizations must maintain accurate and up-to-date financials, not only for proper stakeholder reporting but also to inform strategic decision-making. This is especially true for nonprofit organizations, which are held to high standards of transparency and compliance. Nonprofits are accountable to their donors to properly steward gifts, and accurate financial statements are often needed to secure funds, such as through grant applications.
Propel Nonprofits highlighted the need for accountability and transparency in its recent article Nonprofit Finance: 12 Golden Rules:
Between the IRS, Attorney General, foundations, and donors, everyone is demanding information and answers about how nonprofits receive and use financial resources. This trend is accelerating, and many nonprofits choose to make accountability an important organizational value.
A Single Source of Truth
Maintaining timely and accurate financials can be especially challenging for organizations that leverage multiple sources of revenue – fundraising, membership, event, and eCommerce, for example – with revenue data often housed in disparate systems.
Expenses introduce another layer of complexity. Consider how many systems your organization uses to manage payroll, purchasing, bill-pay, etc.
With so many systems in use, a nonprofit’s general ledger (GL) becomes its single source of truth – a data repository for all financial reporting. But with the complexity of financial data for modern nonprofits, how do organizations build a general ledger they can trust? Nonprofit technology expert and Senior Vice President of Sales at Omatic reflected on this challenge:
“In recent years, nonprofits have accelerated the use of technology to improve aspects of their operations such as fundraising and donor experience. But, in many cases, the investment in technology to enhance external efforts hasn’t been matched with what’s needed internally to support those investments behind the scenes.
Financial posting is a great example; nonprofit financial data is complex and nuanced, and we see more manual effort and delayed (and inaccurate) reporting than ever before. We’re talking to a lot of organizations that need help ensuring transactional data in their general ledger is timely, accurate, and complete.” – Stu Manewith, Director of Thought Leadership, Omatic Software
If this sounds familiar, it may be time to look for a solution to help. Below, we’ve included three important considerations for choosing that solution and building a general ledger you can trust:
1. Account for all transactional data
As mentioned above, many nonprofits have more sources of revenue and expenditure than ever before. Increased competition and evolving donor expectations have necessitated that. A general ledger must incorporate data from all these sources in a timely fashion. Missing data from even one source results in an incomplete financial picture, which could cause a lack of compliance, poor decision-making, and erosion of trust internally or externally. When choosing a solution, be sure your organization has a complete understanding of the data you need in your general ledger and where it will come from; then confirm the solution supports each of those systems.
2. Eliminate manual file manipulation
Too many organizations rely on manual processes to extract information from their financial management system(s) and post that data to their general ledger. For example, after exporting a file from one system, columns may need to be moved or added, and data manually populated before being imported into the general ledger. Not only are these processes time-consuming, but they also introduce the risk of errors. A solution should eliminate, not just reduce, the need for manual manipulation of data and files across all data sources.
3. Seek nonprofit expertise
When nonprofits select solutions for activities such as fundraising, donor management, and online giving, they most often look to technologies that specifically serve nonprofits. Financial posting should be no different. Your organization deserves a partner that understands the nuances of nonprofit operations and has experience with the major finance systems nonprofits employ, along with their unique requirements.
Streamline Financial Posting with Omatic’s Post to GL
Combining over 20 years of nonprofit data integration experience with today’s latest API-enabled technology, Omatic’s Post to GL streamlines financial posting and eliminates manual file manipulation. Omatic identifies and gathers necessary data from an organization’s Blackbaud, Salesforce, payroll, or other transaction management system and transforms that data to meet its GL requirements.
With timely, accurate, and complete financial data, your organization will build trust between your development and finance teams and your key stakeholders. And with the time your team saves, you’ll be able to focus on the most important work – your mission.
In case you missed it, check out these other resources.
- Download The Ultimate Guide to Data Cleansing for Nonprofits
- Watch the recording of Plan. Don’t Panic. The Path to Raiser’s Edge NXT Webinar