Nonprofits were designed to become agents of change. Whatever the cause might be, they utilize their resources and efforts to generate awareness, execute their mission, and celebrate the changes they’ve made in their communities. Yet, there is a financial side to nonprofits that can be a challenge to manage. If you are responsible for this aspect for your organization, you may be looking at solutions to make the role a bit easier.
This guide is dedicated to helping you find the right non-profit bookkeeping software for your organization. While not all options are created equal, you may discover one that suits your personal needs and preferences. Before long, you’ll have a functioning solution that will make bookkeeping a bit easier and more efficient. Let’s discuss some details about why such software is important before unveiling the list.
Why Is Specialized Nonprofit Bookkeeping Software Important?
The use of accounting software is nothing new in a world that primarily relies on digital solutions. However, traditional accounting software doesn’t seem to meet the unique bookkeeping needs of nonprofits, particularly in tracking their finances. There are solutions specifically designed for nonprofits to track revenue and expenses through donor restrictions. It’s also important to note that such software must include features like grant tracking and compliance reporting, which traditional accounting software often lacks.
If you think about it, you might be using any ordinary software solution for accounting, only to discover that what you believed was correct bookkeeping has actually been done incorrectly the entire time. That’s frustrating, to say the least, and knowing this now could save you time, money, and stress.
What Should You Look For in Nonprofit Accounting Software
Before we unveil the list of nonprofit accounting software, it’s important to consider specific features that will be essential not only for choosing the best option but also for long-term use. Most of these features are non-negotiable (i.e. – grant and donation tracking, compliance and reporting, etc.). Let’s examine what to look for and why:
- Fund accounting capabilities: This is where you can track multiple funding streams with restrictions related to your nonprofit.
- Grant and donation tracking: You’ll want to know how each amount of funding is used. Is the money your non-profit receives actually being used for its intended purpose?
- Compliance and reporting: Having this feature is essential, particularly when preparing for potential audits or mandatory reporting. This also encompasses compliance with IRS and GAAP regulations.
- Budgeting tools involve planning across various projects and fiscal years, both in the present and into the future.
- Cloud access: If you have remote teams or require a solution that allows you to access your data from anywhere, cloud-based accounting for nonprofits may be the best option.
- Affordability: Since nonprofits operate on tight budgets, it’s important to consider affordability. Finding an affordable nonprofit bookkeeping solution shouldn’t be limited to just the price you can pay. Instead, seek an option that includes critical features you need, all at a price that fits your budget.
- Integration: This can be done with your preferred CRM solution or any other donor management software you use.
- User-friendly interface: If your non-profit has a team, consider a user-friendly interface that will help them learn the software more quickly.
These are the features we strongly recommend you seek in nonprofit accounting solutions. Your most critical priority features should be included regardless of which solution you choose (again, this includes the ability to track donations and grants, compliance reporting, and user-friendliness, etc.).
The Best Non-Profit Bookkeeping Software Options
Here are the top ten nonprofit bookkeeping solutions available on the market today. We will explore some of the key features, along with the advantages and disadvantages of each. This will assist you in determining which option may suit you best and which ones may not be ideal for your nonprofit. Let’s review the list now:
- QuickBooks Online for Nonprofits
Of course, we start with one of the most recognizable names in the market. QuickBooks offers a version specifically designed for nonprofits like yours. It boasts excellent fund accounting software capabilities and integrates easily with other nonprofit tools you may have.
This includes customizable charts of accounts tailored to your needs and preferences. It will also assist in tracking donations and grants while preparing long-term budgets. If you prioritize compliance, following such measures is straightforward, as it provides IRS Form 990 reporting.
As one of the most well-known brands, QuickBooks is trusted by many nonprofits like yours. Additionally, it can be beneficial if you plan to integrate it with other third-party apps that help maintain smooth operations.
Pros:
- Has a user-friendly interface
- Responsive customer support that can quickly solve issues
- Easily integrates with third-party apps like Salesforce.
Cons:
- Expenses add up with additional add-ons.
Bottom Line:
Small to medium nonprofits seeking a solution with a recognizable name and robust features from the start will be pleased with QuickBooks for Nonprofits. It offers the essential features for nonprofit financial management that will make tasks easier and more efficient. Since it’s user-friendly, with proper training, your staff and volunteers will spend less time dealing with complexities and will be able to perform the necessary tasks you require of them.
- Aplos
For nonprofits and even churches, financial management tools like Aplos may be the perfect fit. This solution boasts numerous features that can rival others on the market. It includes built-in donor management software with event registration tools for upcoming events to promote the causes your organization supports. With customizable reports and dashboards, it remains user-friendly, along with online giving integration to facilitate easy donation collection.
If you are a faith-based organization, this is one of the most highly recommended fund accounting software options for such settings, especially since it offers the right features for nonprofit bookkeeping. In short, this solution is designed with nonprofits in mind.
Pros:
- Excellent for churches and faith-based organizations
- Easy to use and has great onboarding support
- A non-profit-centric solution from the ground up
Cons:
- Limited customization beyond its preset features
- May not have advanced accounting features that larger nonprofits could use
Bottom Line:
For smaller-scale nonprofit organizations, this platform truly simplifies bookkeeping. After all, it features all the essential tools you may need to manage your finances effectively. This includes budgeting by department, managing 1099s, and a range of other tasks.
- Wave (Free Option)
If you’re on a very limited budget, a free option might sometimes be the best. If you’re looking for free nonprofit accounting software, we recommend Wave. Unlike Aplos, it isn’t designed specifically for non-profits. However, it’s an excellent tool to have if your non-profit operates on a low budget.
It offers essential features such as bank reconciliation, income and expense tracking, and customizable charts of accounts. Some may argue that free solutions can have limitations (and that may be true). Nonetheless, you may not need to spend any money if you just require something with enough features to handle the necessary bookkeeping tasks.
Pros:
- It’s free of charge for accounting and invoicing
- Easy to use for all users
- Cloud-based for easy access
Cons:
- No donor management tools
- Limited nonprofit reporting
- No fund accounting that is dedicated
Bottom Line:
This could be the solution for nonprofits that are just starting out. One of the common challenges they encounter from the outset is having a limited budget. It may be beneficial to use this as a temporary solution until you find better nonprofit bookkeeping software to upgrade to—one that aligns with your slightly increased budget.
- Nonprofit+
This nonprofit accounting solution is built on the Microsoft Dynamics platform. It is an excellent option for organizations on the brink of large-scale growth or those already large in size. It’s highly customizable and offers plenty of advanced fund accounting features. You can also track volunteers and donors, along with projects and grants.
Even better, you can set up role-based security access to ensure that the right people in your organization have access to the bookkeeping records. Simply put, this is arguably one of the best options for nonprofits that are already established or growing rapidly. For those with complex financial and operational needs, this can be a suitable choice.
Pros:
- Plenty of customization options
- Perfect for large nonprofits
- Easily integrates with Microsoft 365 and Power BI
Cons:
- Not as user-friendly as some of the other options
- Expensive and may be out of budget for smaller and medium nonprofits
- Implementation support required
Bottom Line:
It could serve as a good solution for large nonprofits with a well-organized team of staff and volunteers. Additionally, it can tackle complex tasks that other software solutions may struggle with. However, it might not be as user-friendly for some staff members or volunteers. Therefore, it may be best managed by someone within the organization who is familiar with complex software solutions like this.
- Xero
For those who need cloud-based accounting for nonprofits, Xero could be the go-to option. It’s a modern solution that offers plenty of the necessary features for bookkeeping software, including budgeting and forecasting, real-time financial tracking, third-party integration, and more. Even better, it has mobile app functionality, allowing you to access it on the go using your favorite device.
If solutions like QuickBooks are a bit out of your price range but you want similar features, this might be the more affordable option. The interface is clean and user-friendly. However, Xero lacks specific features for nonprofit bookkeeping. Nevertheless, it is possible to customize it to suit your needs with this solution.
Pros:
- Affordable pricing
- The interface is easy to navigate and well-organized
- Easy cloud-based access for collaboration with remote teams and easy data retrieval
Cons:
- No native donation management system features
- Not designed with nonprofits in mind.
Bottom Line:
If you are looking for third-party app flexibility and a modern interface, this might be the best option. Since it lacks native features for non-profits, you may need to experiment with it and configure it so that it closely tracks donations, grants, and similar items.
- Sage Intacct
It’s been a while since we’ve explored fund accounting software that’s as nonprofit and NGO-friendly as possible. So let’s discuss Sage Intacct. This is one of the alternatives to Nonprofit+, with advanced features that might not be as intuitive for beginners.
Sage Intacct is designed for large operations and offers a range of features tailored to nonprofit bookkeeping. It includes general, project, and fund accounting, as well as automated revenue recognition. You can also generate financial statements that are easily auditable if needed. With its many features, Sage Intacct will make life easier for nonprofit bookkeepers tackling critical tasks.
Pros:
- Excellent for large nonprofit operations
- Has excellent compliance and audit support
- Can integrate with CRMs like Salesforce
Cons:
- Not beginner-friendly
- Expensive
- Requires implementation time
Bottom Line:
Yes, it offers many features. It’s also well-suited for large nonprofits with complex operations. Ultimately, it’s the one software where the reporting features truly excel. Creating and generating reports for audits, independent reviews, and future forecasting will be much easier.
- Zoho Books
Another flexible cloud-based option on our list is Zoho Books. Its flexibility and integration capabilities may be valuable to many non-profits. This includes customizable reporting, time tracking, expense management, automated bank reconciliation, and more. It is also mobile-friendly, providing access to the dashboard on your smartphone or tablet. If you are already using other Zoho solutions, such as their CRM, you can easily integrate Zoho Books.
Flexibility is a key feature that Zoho emphasizes, making it a solid choice if this characteristic is essential. You can customize it to track funds, even though it does not have a dedicated nonprofit version. Once again, you can configure it to closely monitor nonprofit donations, grants, and other financial activities.
Pros:
- Affordable for those on a budget
- Integrates easily with Zoho CRM and other third-party platforms
- Easy mobile access
Cons:
- Does not have a nonprofit version
- Requires customization for fund tracking. Otherwise, there are limitations.
Bottom Line:
If you are already using Zoho’s suite of tools, it’s a clear choice since you trust the brand for all your operational needs. Otherwise, if you seek a platform that emphasizes flexibility, this is the best solution for your nonprofit bookkeeping requirements.
- Fund EZ
For nonprofit accounting solutions that truly deliver, this is one of them. It is designed specifically for nonprofits. You’ll have access to everything from fund and grant tracking, budget comparison tools, and a donor database with receipting, all in a cloud-based system at your fingertips. Best of all, it offers a wealth of features at an affordable price.
This could be an excellent solution for you if you manage bookkeeping for small nonprofits. If you select Wave as your starting point and need a paid upgrade in the future, this may be your best choice due to its affordability and the features provided. It also seems to be a suitable long-term option if you wish to maintain your nonprofit on a small scale in the future.
Pros:
- Custom reporting and dashboards
- Customer service is based in the US
- Affordable packages for your nonprofit
Cons:
- It may have an outdated interface
- Not suitable for large organizations due to a lack of scalability
Bottom Line:
Fund EZ is arguably the odds-on favorite among all the nonprofit bookkeeping solutions on this list. It could emerge as the clear winner if it resolves the interface issues that appear outdated. Nonetheless, it’s user-friendly, meets all critical nonprofit bookkeeping needs, and likely sets the standard for what such software should offer to nonprofits. Considering the price of the package tiers, you’re probably getting an exceptional deal.
- OneNFP
Similar to Nonprofit+, this solution is built on Microsoft’s Dynamics platform. It includes many robust features typically found in software designed for large-scale operations. Additionally, it offers functionalities specifically geared towards nonprofit bookkeeping. This serves as yet another option for nonprofits that manage complex operations regularly. Moreover, staff and volunteers with accounting backgrounds will need training to effectively use this software, which can be a time-consuming endeavor.
On the positive side, it offers features such as donor and grant tracking, fund accounting and budgeting, real-time analytics, and compliance audit tools, all in one comprehensive package. For nonprofit bookkeepers with significant accounting experience (or those with staff possessing such skills), this solution is the ideal choice.
Pros:
- Secure and scalable
- Integrates easily with Office 365
- Designed for nonprofit workflows
Cons:
- Requires extensive training
- Licensing may be complex
Bottom Line:
Of the bookkeeping software on the list, this may be the most complex in terms of usage. However, it possesses all the characteristics of a nonprofit bookkeeping solution suitable for large-scale operations. While your large nonprofit may not be a good fit for tools like Fund EZ, OneNFP is the best option since it has nonprofit-friendly features and more.
- MoneyMinder
If your nonprofit organization is a PTA, HOA, or booster club, this is the best solution for your bookkeeping needs. It’s small-scale, affordable, and includes the necessary features that align with nonprofit bookkeeping tasks. Even if you lack accounting skills, this solution is ideal because it’s so easy to use.
Best of all, there’s a free version, so you won’t have to worry about spending money if you don’t want to. It offers fund tracking, donation tracking, budget comparisons, and online check registers—just the features you need to keep track of your organization’s books and nothing more.
Pros:
- Free basic version
- Easy to use
- No accounting skills needed
Cons:
- Not a lot of automated features
- Not a good fit for larger-scale or grant-heavy organizations
Bottom Line:
This affordable nonprofit bookkeeping solution lacks the complexities found in some other options. If anything, it is primarily a good fit for school clubs, community organizations, and similar groups.
Frequently Asked Questions (FAQs)
What makes accounting software suitable for nonprofits?
The best accounting software for nonprofits usually includes features like donor tracking, fund accounting, grant management, and reporting capabilities including IRS Form 990 reporting. Additional features may also support compliance with GAAP and IRS regulations, if applicable.
Why is fund accounting so important?
Fund accounting enables nonprofits to track various streams of income received by the organization. This includes grants, donations, and other income sources based on restrictions set by donors or other funding entities. Therefore, fund accounting is essential for transparency and compliance, helping to maintain a nonprofit’s reputation for credibility.
Can I hire a professional to manage our accounting software?
If your organization lacks in-house financial expertise, you might consider seeking assistance from professionals who can manage bookkeeping and accounting. Our experts at The Quantify Group possess specialized knowledge in nonprofit accounting.
Let The Quantify Group Handle The Nonprofit Complexities
Dealing with complex issues in non-profit bookkeeping can be challenging, even if you select software that meets your most critical needs. However, The Quantify Group can assist you with any bookkeeping challenges you may encounter, including helping you keep track of your numbers with the software of your choice. For more information about what we can do for you, contact us today.
