As charities contend with a drop in donations and remaining financially viable, they’re increasingly looking to technology to help. In fact, eight out of ten chief executives say they would be “investing in IT/new technology and online solutions”.
Getting the right accounting software can help charities to manage gift aid, understand the most successful sources of funding and get more detailed data to show their impact. We offer some advice about how charities can choose the right software and get the most of their investment.
Investing in software
Charities are always under pressure to keep infrastructure and administration costs low and any purchases need to be carefully considered.
However, a lack of investment can be equally problematic, as charities miss out on valuable data that could help secure new funding sources or provide information to help show their supporters how their donations are helping.
Accounting software can also help to minimise the impact of some of the key challenges facing charities today:
- Financial sustainability: accounting software can help you to understand the financial status of your charity and to make better informed decisions thanks to the data it provides.
- Drop in public and government donations: while the software can’t create more donations, it can help you to analyse your most successful sources of funding, so you can focus on areas that are working well and minimise your costs in acquiring new donors.
- Administration time and costs: many tasks that need to be handled manually can be automated with the right software, freeing up your team for income generation or managing services.
- Measuring impact: with the increased focus on demonstrating the positive effect that charities make, having access to the right data is essential. The Charity Finance Group said that “public trust and confidence are essential for an effective and successful charity sector, and high standards of financial management and performance reporting are an important part of maintaining this.”
- Legislation: keeping up to date with the volume of charity regulations takes time. The right accounting software ensures you’re compliant and helps you report your figures correctly.
Choose the right software
With so many advantages, it’s clear that the right software can make a big difference. But there are a growing number of packages available, so it’s important that charities follow the right process in choosing one that suits them.
From developing a specification through shortlisting and trials to making the purchase, it pays to be clear about what you are looking for. Each charity’s needs will be different but here are the key things that will apply in most cases.
Designed with charities in mind
Charities have different needs from general businesses and need to be able to track donations, gift aid declarations and ensure their accounts comply with Charities Statement of Recommended Practice (SORP), including providing a Statement of Financial Activities (SoFA), which replaces the Profit and Loss statement used by companies.
Choosing software that has been optimised for charities ensures you’re complying with legislation and have the information you need.
The right data
It’s important that you understand the data and reports you need for your organisation. Any software you choose should be flexible enough to fit your requirements, and simple to use.
With many fundraisers out at events or with supporters, choosing charity software that lets them stay connected is really helpful. Choosing software that is available through the cloud means they can update information from anywhere with an internet connection.
Other employees can make use of this feature too. From your finance director to your chief exec, everyone can be assured that they will always have access to the figures they need.
You need to know that your data is safe and your software provider can ensure that you stay compliant as new legislation is introduced. Choosing an established charity software company means they’ll be there to support you, now and in the future.
Did you know?
Sage software has built in functionality to help charities and not-for-profit organisation’s manage their finances and stay complaint with legislation? Find out more about our exclusive offer for charities on Sage 50 Accounts today.
*Only available to charities and not-for-profit organisations. New Sage Accounts customers only. Offer based on one user license. Limited time only