Planning, creating and maintaining your nonprofit budget is crucial to the continued growth and success of your organization. From identifying year over year funding and expenses, to properly tracking different programs under your umbrella, and being able to present information in accordance with FASB and GASB guidelines, a good budget can make or break your organization.
Unfortunately many nonprofits perform their budgeting process outside of their accounting systems. Spreadsheets and hand-written notes are often utilized instead, creating a time intensive and extra-labor inducing process. The problem with this approach is that the budget is more prone to errors, is harder to maintain and can easily become obsolete when necessary changes and updates are made throughout the year.
If you have good fund accounting software, we’d like to encourage you to use it to its fullest capacity. Many are equipped with advanced features and capabilities that provide you with the tools you need to plan more effectively and achieve a better end-result. Many allow you to choose between importing data and information from an outside source, or creating and managing the budget directly within your fund accounting software – both of which will produce the right end result for you. Not only will your budgeting process become more insightful, it will be easier to pull raw data into organized and straightforward reports – allowing you to operate in the most efficient capacity possible.
There are many ways an automated budgeting process will improve your nonprofit organization, including:
Streamlined Integration – Many nonprofit accounting solutions are equipped with the capability to create or upload commercial spreadsheets to simplify budget management. Here budget balances can be automatically updated and GL account numbers can be easily inserted saving you time and improving accuracy.
Powerful Capabilities – With a wide-range of formula options you can construct virtually any simple or complex budget calculation. You can create rolling or multiple-year budgets simultaneously and perform calculations on a period-by period basis.
Furthermore, you can analyze ‘what if’ scenarios with preview capabilities and recast budgets as many times as you need to in order to come up with the right plan.
Ease of Use – Many people stick with their old faithful spreadsheets because they’re concerned their fund accounting system’s budgeting process will be too complicated. However many are very easy to use. They often have similar functionality to spreadsheets and flexible formatting features enabling you to create a detailed budget that is accurate, appealing and easy to manage. From making changes such as font, color and cell locking to adding or removing sheets, rows and columns – you can easily customize it according to your needs, all while maintaining data integrity.
Comprehensive Budget Management & Analysis – If your nonprofit organization maintains more than one budget at a time, automating it is a must! Your fund accounting system is much more likely to handle these complex needs accurately.
Additionally, integration of your budget within your nonprofit accounting solution opens up a whole new world of forecasting and reporting. Using real numbers and actual results will help you better utilize your funding resources and make the most out of every donation. With better visibility of your financial information, you’ll be able to save time in your back office and spend more on your cause.
If you are approaching your fiscal year-end budget process and would like to learn more give us a call! RBP Methods would be happy to help you integrate next year’s budget into your accounting software and provide you with a more streamlined back-office so you can focus more of your time and resources on the people and communities you serve.