6 Best Nonprofit Accounting Software to Try

Introduction
Managing finances can be daunting for any organization, but for nonprofits, it‘s especially critical. As a nonprofit, proper accounting and financial management isn‘t just about dollars and cents – it‘s about maintaining public trust and furthering your mission. Choosing the right nonprofit accounting software is key to responsible stewardship of funds.

In this comprehensive guide, we‘ll delve into the world of nonprofit accounting software. As an accountant who has worked with numerous nonprofits, I‘ll share my perspective on what nonprofit accounting software is, why you need it, and how to select the best solution for your organization. Whether you‘re a fellow finance geek or simply want to avoid accounting headaches, read on for insights to make an informed decision.

What is Nonprofit Accounting Software?

Simply put, nonprofit accounting software helps nonprofits properly track and manage their finances. But it‘s tailored specifically to meet the unique needs of nonprofits vs. traditional for-profit businesses.

Specifically, nonprofit accounting software provides:

• Fund accounting – Track restricted vs. unrestricted donations
• Donation management – Donor/pledge tracking
• Grant management – Track funding sources
• Reporting – For stakeholders, Form 990, etc.
• Payroll, purchasing, budgeting, bank reconciliation
• Tools for compliance and transparency

Now let‘s dive deeper into why proper accounting practices are so critical for nonprofit organizations.

Why Nonprofits Need Accounting Software

As a fellow number-cruncher, I cannot stress enough the importance of sound accounting practices and controls for nonprofits. Here are the top reasons nonprofit accounting software is a must:

1. Compliance – Nonprofits must follow standards like FASB 116/117. Software provides compliant fund accounting.

2. Reporting – Nonprofits must report how they use funds to stakeholders through tools like the IRS Form 990. Software enables accurate tracking and reporting.

3. Fundraising – Proper accounting helps nonprofits secure more donations and grants by showing good financial stewardship. Donors want confidence their funds are used wisely!

4. Efficiency – Software reduces manual processes, errors, and the need for extensive accounting staff. Those savings mean more dollars toward your mission.

5. Transparency – Online software provides financial transparency to build public trust. This is essential for an industry built on donations.

According to a study by software review site Capterra, 75% of nonprofits surveyed reported accounting software helped improve financial oversight. Proper controls reduce the risk of errors, fraud, or misuse of funds.

Benefits of Nonprofit Accounting Software

Based on my experience, nonprofit accounting software pays major dividends including:

• Centralized system for all financial data
• Easy fund accounting and tracking
• Tools to support online and offline donations
• Grant management and required reporting
• Automated bank feeds and reconciliations
• Budgeting and forecasting capabilities
• Custom reports and form 990 filing prep
• Reduced accounting staffing needs
• Cloud-based access from anywhere
• Increased financial transparency and trust

By automating tasks like bank reconciliations, software frees up my time from tedious work so I can focus on big-picture analysis and reporting for smart decision making. It‘s the Swiss Army knife for nonprofit accounting and operational efficiency!

Key Features to Look For

If you‘re evaluating accounting systems, here are some key features to look for:

• Fund accounting
• Robust donation management with online payments
• Grant tracking and reporting
• Bank feed integration
• Budgeting and forecasting
• Custom reporting for stakeholders
• Form 990 reporting
• Mobile access
• Cloud hosting
• Data security
• Multi-user and multi-location access
• CRM and payroll integrations
• Scalability from small to large nonprofits

As a nonprofit grows, the software should grow with it. Scalability, security, and mobility are big factors to consider. You want a solution that can power your organization now and in the future.

Top Nonprofit Accounting Software

Now let‘s explore some leading nonprofit accounting software options:

Wave Accounting
Wave Accounting offers a nice starting point for small-to-medium nonprofits. The free plan provides accounting, invoicing, and reconciliation. Payroll and payments require fees.

Pros:

• Free core accounting features
• Online payment processing
• Donation tracking
• Tax report generation
• Easy to learn

Cons:

• Limited reporting
• Additional fees add up
• Support extra cost

Wave is best for nonprofits with basic needs. But long-term, it may lack some robust features and customization larger nonprofits need.

MoneyMinder
MoneyMinder is designed for volunteers with minimal accounting expertise. The interface is simple and focused on key nonprofit financial needs.

Pros:

• Simple interface
• Fundraising/reimbursement tracking
• Document storage
• 990EZ reporting

Cons:

• Less robust than larger systems
• Limited customization
• Lacks advanced features

For micro-nonprofits, MoneyMinder is a user-friendly option. But growth may require more advanced capabilities.

Zoho Books
Zoho Books offers rich features and scales from small to large global nonprofits. The intuitive interface provides powerful functionality.

Pros:

• Fund accounting
• Bank integration
• Budgeting and forecasting
• Custom reports and forms
• Access control
• Mobile support

Cons:

• Steeper learning curve
• More costly for micro-nonprofits
• Voice support extra

Robust features make Zoho Books suitable for medium to large-sized nonprofits. It‘s a scalable solution with excellent capabilities.

Aplos
Aplos is purpose-built for nonprofit accounting needs. Over 40,000 organizations use Aplos for fundraising compliance.

Pros:

• Fund accounting
• Flexible chart of accounts
• Donation tracking
• Budgeting tools
• Form 990s
• Fixed asset tracking

Cons:

• No chat support offered
• Less payroll features
• More limited mobile apps

Aplos excels at nonprofit-focused features like fund accounting and form 990s. It‘s best for medium-sized nonprofits.

Accounting Seed
Accounting Seed manages finances for diverse nonprofits with a focus on fund accounting.

Pros:

• Fund accounting
• Campaign management
• Multi-location support
• Salesforce integration
• Real-time visibility

Cons:

• More costly solution
• Steeper learning curve
• Less tailored for micro-nonprofits

With robust functionality and Salesforce integration, Accounting Seed fits large, complex nonprofits. The cost may deter smaller organizations.

Akaunting
Akaunting provides free simple accounting for micro-nonprofits. It offers basic financial management capabilities.

Pros:

• Free option
• Bank reconciliation
• Invoicing and bill pay
• Dashboard reporting

Cons:

• Very limited features
• Lacks core nonprofit functionality
• Support at added cost

For ultra-small nonprofits, Akaunting offers a free starting point. But it lacks key nonprofit accounting features.

Making the Best Choice

Choosing nonprofit accounting software depends on your budget, size, and needs:

• Small/Micro – Wave, MoneyMinder, Akaunting
• Medium – Zoho, Aplos
• Large – Zoho, Aplos, Accounting Seed

Take time to evaluate support, integrations, and scalability for long-term success. With the right software, you can focus on your mission instead of accounting. Here‘s to more dollars toward your cause and less toward accounting!