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A nonprofit budget is not one number. It is a set of commitments, each tied to a fund, a funder, or a program, and each with its own rules about how the money can be spent.

Choosing nonprofit accounting software is rarely a features contest. Most packages can post a journal entry and print a statement. The difference shows up when a funder asks how a restricted grant was spent, or when your board wants a report by Thursday and finance needs until the end of the month.

 

A board report with 40 numbers in it gets skimmed. One with eight gets read. The hard part of nonprofit financial reporting is rarely producing numbers. It is choosing the few that show your executive director and board whether the organization is sound, and whether the money is doing what it was meant to do.

Spending less than you bring in is often cited as the most important non-profit finance goal. It helps you stay out of debt, save for emergencies and stash money away for future projects. It is the primary control that enables you to achieve some level of financial long-term stability. Many governments seem to forget this very basic fact. They don’t think that financial dead ends like what has happened in Greece can happen to them. Non-profits don’t have the luxury of continuous deficit spending; therefore, budgeting is essential to meet the objective of the organization. Budgets are simply the roadmaps to achieve strategic non-profit goals.

But, how do we make this whole process easier? How do we reduce the 5 major budgeting issues?

1. Reducing the decentralized data and department silos of information
2. Controlling the preparation process, multiple revisions and related backup information
3. Reducing the time to prepare the budgets (complete process can take more than 3 months to complete and approve)
4. Improving the accuracy of the information with consistent documentation
5. Improving the timeliness of the budget (Produce the budgets frequently enough to help decision making to help focus on strategic goals)

The answer to these questions is through using technology effectively in our organizations. Spreadsheets are not automation. Let’s get real and understand that they are only a tool. There are solutions available that can take the prior history from your accounting system and send it to the appropriate department manager. The information is in a format that they can use to easily create a new budget. This budget has all the related documentation available and linked to details for the budget information. The budget can then be rolled up into other levels, like divisions and organizations. With this setup, changes are easy to make, all being tracked and the approved budget can be quickly linked with your accounting system to provide timely reporting and improved decision making. These budgeting and planning systems can solve all the major budgeting issues and are very inexpensive to implement within organizations.  (For more info Click Here)

So, let’s get real and understand that the current budget processes are a pain and result in significant amounts of wasted time and effort. Let’s use the existing technology, accounting and management processes to make our budgeting less stressful.

Your board doesn't approve a new financial system because staff are frustrated with it. They approve it because someone brought a clear, documented case: here's what isn't working, here's what it's costing the organization, and here's what changes if it's fixed.