When you are looking to purchase a new nonprofit accounting software solution, you will need to know how to write a request for proposal. The Request for Proposal is an invitation to a group of vendors to submit proposals for a good or service to be purchased in the near future, in this case a nonprofit accounting software system. Creating a Request for Proposal can be an effective way for an organization to determine its needs and to quickly obtain answers about software systems and suppliers. The proposal responses will contain the valuable details that will help narrow the selection pool to new systems suitable for further investigation. Thus, the Request for Proposal should be carefully written to ensure that all pertinent information is addressed. This guide is intended to help in the preparation of the Request for Proposal by suggesting the content sections, detailing the purpose of each section, and providing templates for use in writing your own requests.
What Should Be Included in the Request for Proposal (RFP)?
There is not one definitive format for Requests for Proposals (RFPs). Rather, each organization can tailor the contents of the RFP to gain the necessary understanding of each of the respondents’ nonprofit accounting software solution. The basic information that is generally included in an RFP includes an overview of the purpose of the document, solicitation of the vendor’s company information, a detailed listing of functional requirements, listing of technical requirements, and questions pertaining to services available from the vendor after the sale. It is logical to break these elements into sections within the RFP as they will be handled separately in preparation and response. Sections may be omitted if deemed unnecessary and additional information may also be included either within these sections or separately.
The introductory section identifies the document as an RFP, gives an overview stating that a new nonprofit accounting software solution is being sought, details the organization’s history and structure, and finally illustrates a high level picture of the desired solution.
- Cover Letter
Begin the introduction with a cover letter stating the organization’s intent to purchase a new system and requesting respondents to comply with the RFP instructions for completion for consideration. The cover letter provides respondents with the appropriate contact information and methods for initiating contact with your organization.
- Overview of Selection Process
Detail objectives, including reasons for replacing the current nonprofit accounting system, the benefits expected from the new system, and the overall project timeline. Key selection steps and dates, including response deadlines and the dates of your short list and selection decisions should also be included.Outline how the RFP responses will be evaluated, the criteria used, and the evaluation process. Detail the required response elements to be supplied by the nonprofit accounting software vendor in its proposal. These elements should include:
– Total cost of nonprofit accounting software systems
– Database technology used by the proposed solution
– Technical requirements (operating system, network configurations supported, hardware)
– Implementation, training strategy, and cost
– Annual maintenance and supportIf appropriate, include a confidentiality statement to ensure that potential suppliers keep the organization’s RFP details confidential. When extensive customizations are required by the vendor to tailor its product into the proposed solution, also consider the addition of language stating that the supplier is required to state all anticipated and shall provide a “Not to Exceed” price for the design, development, and implementation of customized features.
- Organization Background
Outline details of the organization. These may include the organization’s mission, programs, funding levels, locations, number of employees, and organizational structure. Explain the current software environment by listing the current software systems in place, their interactions, operating systems, network configuration, transaction volumes, number of users, and the contact details for key staff involved.
- Desired System
Outline the organization’s vision of a desirable fund accounting solution. This is a high-level view and need not contain all functional or technical detail requirements, as these will be included in separate sections. Provide goals and expectations of the system and its implementation.
- Vendor Profile
Use this section to request important details about the companies responding to the RFP. Collect supplier background information including:
- Contact information
- Number of years in business
- The specific number of years the vendor has been working with like organizations
- Number of customers
- Number of employees
- Services available
- History of the proposed product
- Development strategy
- Current version of product and next planned release
- Functional Requirements
This section of the RFP is comprised of detailed questions pertaining to the functionality of the nonprofit accounting software. Generally the functional requirements section is prepared based on a compilation of requirements provided by staff members who use the software. Break down the functional requirements into sections by function to organize the document. This makes interpreting the responses more manageable.This section of the RFP also lends itself to analysis by spreadsheet. Suppliers can complete this section on an embedded spreadsheet if the RFP is provided electronically. An electronic spreadsheet makes it easy to line up responses from suppliers to compare the proposed solutions. Rank requirements according to whether each feature is essential, nice to have, or just for informational purposes. This ranking will help improve the evaluation of the vendor responses. It is optional to show this ranking information to the respondents.Valid Responses
Begin the Functional Requirements section with a listing of valid responses for the feature-related questions. Standardizing the format of the responses will greatly ease the task of evaluating each vendor’s response. Consider including the following elements in the listing of valid responses:1 = Currently a Standard Feature
2 = Feature Planned for Next Release (due within one year)
3 = Not a Feature
4 = Third-Party Software Required
5 = Other
Be sure to include an explanation section next to each response in case the vendor needs to qualify the response or note important details of the feature. This explanation area can also be used if questions are asked that require a process overview or detailed written response.
Consider the basic core functionalities of the system that is required. Detail these items in a section. Typically core topics would be:
- Chart of Accounts questions
- Journal entry requirements
- General Ledger requirements
- Financial reporting requirements
- Year-end processing questions
- Audit trail questions
- Allowed history retained
- Modular Requirements
Use separate sections to detail the functional requirements desired by area. Nonprofit accounting software is typically sold in modules, and these roughly correspond to the functional areas served. For example, break down the requirements for vendor transactions, customer and donor activities, purchasing, budget, and so forth.
Consider creating a section dedicated to interaction of other critical systems with the nonprofit accounting system as part of the modular requirements to reduce duplicate data entry. With the right RFP, you can gain the information you need to make an educated nonprofit accounting software decision.