People tend to thrive on routine and find themselves doing what is known and comfortable rather than what may actually be best. This is certainly the case when it comes to using familiar software systems to manage accounting for nonprofits. Unfortunately, the comfort zone (which for many nonprofits just starting out is using Excel) could be costly to your organization’s efficiency, and it may be just the right time to consider a more robust and automated nonprofit accounting software to manage your organization’s accounting needs. Last week, we took a look at how Excel, in general, is not a sufficient long-term solution because of its inability to keep the pace with organizational growth and because of the costly errors that can be generated through a manual entry system for tracking and recording data. To learn more, visit here.
Beyond the general issues caused by using Excel, let’s take a closer look at six issues with choosing to substitute an accounting software for nonprofits with Excel.
Six Problems with Using Excel Instead of a Nonprofit Accounting Software Solution
- It basically requires you to know a programming language that isn’t necessary for you to know. No one, especially those working at nonprofit organizations striving to further their mission, has time to spend in such things as learning computer code. This just distracts from the real work at hand. Sadly, with Excel, knowing some of this new “language” is necessary and can rob you of your valuable time. Because Excel is widely used, it is forgotten that it really is a complex solution. It’s use has never been restricted to those with an expertise in it, but it is complicated enough that this would make sense. Many Excel users misjudge their level of expertise in using Excel and find out, after wasting time and effort, just how tricky and intricate it can be to use.
- Getting the reports and information you need in Excel isn’t easy. It requires lots of thought and planning to set up a spreadsheet that meets all of your financial reporting needs. It takes time to set up expense reports, to track invoices and donations, etc. The need to add to or change information is limited by the time it takes to re-create the right spreadsheet to meet ever-changing demands.
- Configurability is limited to the front end not the back end of a project. The frustration is likely to mount at the end of a project if something needs to be changed but can’t be because of Excel’s limitations. You really need to know exactly how you are going to use the accounting data before you start if you are using Excel because it lacks flexibility to configure later on. Forward thinking is required in order to have the correct names of reports and cells in place.
- Fraud susceptibility increases with Excel documents over accounting software solutions. Because it is so easy for anyone and everyone to have access to Excel, information can be easily changed, and tracking made changes is difficult. A simple addition or elimination of a digit could be costly yet very hard to notice.
- Integration with other applications is difficult. Performance issues run wild when trying to combine large amounts of data, worksheets, and scripts. Excel does not integrate well (or at all) with many other software applications that can help you run your organization.
- Tracking transactions is difficult. Excel does not recognize double entries automatically. It is a road-block in seeing the actual reality instead of providing you with the correct data you need to run your business.
RBP Methods offers two accounting software solutions that can eliminate the above problems caused by using Excel. Abila MIP Fund Accounting and AccuFund Accounting are both worth a second look. Stay tuned next week as we look at why nonprofit accounting software is a solution to the problems Excel causes.