What You Need to Consider Before Selecting

Accounting Software for Your Nonprofit Organization

Rebeka Mazzone, CPAFebruary 16, 2011February 16, 2011

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Rebeka Mazzone, CPADirector, Rhode Island Region

Accounting Management Solutions

What You Need to Consider Before Selecting What You Need to Consider Before Selecting

Accounting Software for Your Nonprofit Organization

Rebeka Mazzone, CPA

Director, Rhode Island Region

ObjectivesObjectives

•• Understand various software Understand various software

options and pricesoptions and prices

•• Learn the key considerations Learn the key considerations

before making a decisionbefore making a decisionbefore making a decisionbefore making a decision

•• Walk away with a basic idea Walk away with a basic idea

of where to startof where to start

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Software Selection Process

My view of the World:

• Start with the end in mind

• GIGO

• Consider the user(s)

• Pay to have custom reports designed• Pay to have custom reports designed

• Training, training, training

Software Selection Process

1.Internal decisions and needs

2.Outline specific functionality and features

3.Sketch out chart of Accounts

4.Demo Software Packages

5.Submit requirements to vendors (RFP)

6.Decision Process6.Decision Process

7.Training

8.Data Migration and Implementation

9.Training

10.Plan for the unexpected!

11.Training

Internal Decisions and Needs

•Understand your organization’s mission and

strategic goals

•Create internal project team of key decision •Create internal project team of key decision

makers and key software users.

•Decide on a timeline

• Identify all areas of the organization that will be

affected

Internal Decisions and Needs, cont’d

•Ensure you have the resources to support the

selection

•Decide on budget, and how flexible that budget •Decide on budget, and how flexible that budget

is

•Understand other costs

Implementation Plan

•A plan is key to a successful implementation

•Make sure plan is thorough, specific, and flexible

•A typical implementation plan should define:

• Dates and deadlines

• Roles of consultants, vendor, executives, trainers, end users, etc.

• Key milestones

•Steps of a typical implementation plan:

• Design basic structure and process workflows

• Data conversion and migration

• Build and test

• Training and support

Outline Specific Functionality and Features

•Software

• Functionality and features

• Ability to meet unique needs

• Ease of use – who are the users?• Ease of use – who are the users?

• Ease of installation and maintenance

• Ease of customizing software and reports

• Ease of integrating software with other software packages

Outline Specific Functionality and Features, cont’d

•Vendor

• Financial Stability

• Knowledge of industry and commitment to market

• Customer support and service• Customer support and service

• How does that support work? Is it through a reseller or

third party, or is it through the vendor directly?

• Recommendations and references from users

• Services available – consulting, customizations, etc.

•Number of Users•Multiple Net Asset Tracking•Grant and Endowment Allocations (endowment, grants)

Outline Specific Functionality and Features, cont’d

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•Deferred revenue•Automate processes – report generation, posting, purchasing, invoices, bank reconciliations•Paperless•IT Support•Other systems (donor, tickets, registration, housing, payroll)

Sketch Out Chart of Accounts

• The ultimate goal should be to keep reporting

in the software – nothing in Excel!

• Draw an organizational chart of departments,

programs within departments, and grants programs within departments, and grants

funding programs

• Understand how reporting works in the

software

Segment 1

Organigation

Department 1

Department 2

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Segment 2 Program 1

Grant 1 Grant 2

Program 2 Program 3

Grant 3 Grant 4

Sketch Out Chart of Accounts

• Questions to ask yourselves during design• What reports are needed?

• What level of detail?

• What reports are required GAAP, State Reports, etc.

• What reports are you currently creating in Excel? Why?• What reports are you currently creating in Excel? Why?

• Do you need to track restrictions?

• What other cost centers, departments, locations, etc. do you need to

track?

• Do you require any self-balancing accounts?

• Do you need to track, and report on, endowments and unitization?

Demo Software Packages

•Limit to 4 Demos

•4 Tier’s of Products – My Personal Opinion, not fact!

•Off the shelf – up to $1M -

Examples Purchase Price

(Double for

Implementation)

Size of

Organization

Pros/Cons

Off the Shelf Peachtree, Quickbooks

$300-1,000 Up to $1M Easy to learn and manage, limited

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Quickbooks manage, limited controls

Entry Level Modular

FastFund, MIP $1,000-3,500 Up to $5M good controls, more complex to learn

Modular Financial Edge, GP, SL, MIP, AccuFund

$8,000-25,000 ($2,500-5,000 per module)

$1M + Ability to customize, good controls, more complex to learn

Highly Customized

PeopleSoft, SAP $50,000-250,000 Large, complex, Multi-location, $100M+

Highly customizable, very expensive to manage, more complex to learn

Submit Requirements to Vendors

•Request for Proposal

• Overview of Organization

• Outline specific requirements

• Be specific with deadlines and due dates• Be specific with deadlines and due dates

• Be specific with next steps, for vendors and for your

organization

Decision Process

•Remember that you are not just buying software. You

are investing in the future of the organization, and there

are lots of aspects to consider.• Training Costs

• Maintenance• Maintenance

• Reporting

• Efficiencies and Return-On-Investment metrics

•Make sure you are comfortable with all aspects of the

options.• Vendor

• Software and Hardware

• Support

•Think back to the strategic goals outlined in the

Decision Process

•Price and Cost Considerations:• Think of one-time costs and recurring costs

• Is there additional hardware that needs to be purchased?

• Also consider the value of time saved from gaining efficiencies that • Also consider the value of time saved from gaining efficiencies that

you may have outlined in your goals and requirements

• Is financing available for any part of the project?

•Understand additional costs down the road• How much would an additional user cost later?

• How much would an additional module cost later?

• What kind of services would I need to implement another user or

module down the road?

Data Conversion and Migration

• Determine timing of data conversion – start of

fiscal year, halfway point, after auditors finalize

their work, etc.

• Determine how much data is vitally necessary• Determine how much data is vitally necessary• How often would you or other users go back and look at a

previous year’s worth of data?

• What kinds of year-over-year comparative reporting do

you need?

• Could you leave the old software on a standalone

computer for access to history?

• Understand the timeline for data conversion

• Understand the vendor/reseller’s levels of data

Data Conversion and Migration

• Understand the quality of your current data• Clean up the current data as well as possible

• Many times, the current data is inconsistent to the point

that starting over with beginning balances makes the

most sense.most sense.

• Understand the structure of your current data• How are the tables arranged?

• How would these tables be mapped to a new database?

• Can exports be created simply and imported to build the

new database, or would a conversion program need to be

built to pull data from underlying tables?

• This information will be necessary in

discussions with the vendor/reseller in

Training

• Staff MUST be trained on proper use of the

system

• Training is needed for end users upon Go-Live

• Training will also be needed on an ongoing

basis

Contact InformationContact Information

•• Rebeka Mazzone, CPARebeka Mazzone, CPADirector Director –– Rhode Island RegionRhode Island Region

Accounting Management Solutions, IncAccounting Management Solutions, Inc

One Richmond Square, Suite 124COne Richmond Square, Suite 124C

Providence, RI 02906Providence, RI 02906

Phone: 401Phone: 401--374374--32223222Phone: 401Phone: 401--374374--32223222

EE--mail: rmazzone@amsolutions.netmail: rmazzone@amsolutions.net

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