Selecting accounting software can be especially difficult for nonprofits. Many of the best known packages seem expensive when you are working within a nonprofit budget. Staff in a nonprofit organization’s accounting department may lack experience with a variety of software. Specific training necessary to utilize such systems effectively can also be an issue.

Ensuring that the software you select meets your organizational needs is essential. A decision concerning which tool is right for your organization needs to be based on a myriad of factors, including:

• Budget
• Existing software
• Complexity of the accounting challenge
• Number of locations and size of the organization, now and in the future

Step-by-Step

Match Your Goals

The first step in software selection is to make internal decisions. Understand your organization’s long-term and short-term strategic goals, and identify how those goals fit in to your software selection process. Create an internal project team of decision makers and end users to ensure that the software you select matches everyone’s needs and abilities, now and in the future. (For example, training is often budgeted as a one-time expense but training needs will resurface every time there is a new hire, or if there are upgrades or changes to the software itself.)

- Create a project timeline, including:

• Purchase
• Training
• Implementation

- Identify all potentially affected areas of the organization:

• Who will use it?
• Who will need to integrate with it?
• Decide how much involvement each area will have in the decision process

Ensure that you have the proper resources to support your selection

- Do you have the budget for the initial purchase, upgrades, implementation and maintenance? - Do your people have the required skills to utilize the software? - How extensively do I need to modify my existing business processes to conform to the new software package’s processing and reporting capabilities? - Do you have the time to properly train them? - Decide on a budget and determine its elasticity - Consider additional costs:

• Additional hardware
• Additional software, advanced modules or add-ons
• Custom report creation
• Employee time and effort related to selection and training processes

Outline your specific vendor needs and requirements

• Installation and maintenance
• Integrating new software with existing software
• Customizing software to fit within your operations
• Specific and customized reporting capabilities

An RFP Process

- Involves creating a formal Request for Proposal to submit to vendors. - Before starting the RFP process, you should have answered the above questions - Allow responding vendors to:

• Demonstrate how their solution functions within guidelines
• Explain how they will meet your specific requirements
• How do similar organizations do it?

- Create a short list of vendors that submitted proposals before assembling your decision team

Process Without an RFP

- A selection may be done without a formal RFP. - Interview peer organizations and research possible vendors on the Internet. - Submit interest to vendors by calling, emailing, or submitting online (will be different for each vendor). - Since no formal document will be sent to vendors outlining specific needs, be prepared to answer a variety of questions from each vendor.

Making a final decision

When your team is making a final decision, remember that you are not just buying software. You are investing in the future of the organization. Software has the potential to provide a high return on your initial investment. It can provide access to information never before available and it can streamline current processes to take a significant burden off your staff.

There are various aspects to consider. Take into account ongoing training costs, maintenance, reporting, efficiencies and return-on-investment metrics. Make sure you are comfortable with all aspects of the decision, such as selected vendor, software and hardware, and technical support. Think back to the strategic goals you outlined at the beginning of the process to help prioritize each aspect of the project. Remember that the primary purpose of the accounting software is to generate timely and accurate reports to allow you to make management decisions. As such, the design of the chart of accounts, custom reports and staff training are the most critical areas. (AMS helps clients with the software selection process, and chart of accounts design, tying both to specific business and reporting needs.)