“Only a life lived for others is a life worthwhile.”
This quote of Albert Einstein holds true, especially for nonprofit organizations (NPOs), who are organized for purposes barring generating profit. While NPOs strive to further a social cause and provide a public benefit, they encounter multiple challenges in ensuring a seamless finance and accounting experience in parallel. These include managing cash flow and tracking donations and expenses.
With Sage 50 hosting today, many NPOs opt for such services to take their accounting experience to the next level while being economical. From being environmentally friendly and providing on-the-go access to being cost-efficient and providing a user-friendly experience, Sage 50 on cloud covers them all. Essentially, hosting Sage 50 on the cloud helps NPOs break the mold of how they usually handle finance and accounting activities.
Here, we’ve compiled a list of pressing financial and accounting challenges nonprofit organizations face and how hosted Sage 50 solutions can overcome them. Read on to explore them.
Finance and Accounting Challenges of Nonprofits
1. Financial Reporting
According to the National Center for Charitable Statistics (NCCS), there are over 1.5 million nonprofits of all types in the USA. Pertaining to financial reporting, they undergo many similar challenges as their for-profit peers.
Some NPOs still rely on their legacy financial reporting software and manually prepare reports in paper-based formats – a significant risk that leads to errors and damages the NPO’s reputation.
2. Grant-based Issues
Receiving grants from multiple external sources often makes it challenging for nonprofits to track when they need to collect money and how often. While grants fuel nonprofits, the lack of proper processes creates additional work. Here’s a look at some of the debilitating challenges with grant funding in NGOs:
Complexity: Nonprofits often receive grants from multiple sources, with different reporting requirements, deadlines, and regulations. Keeping track of all of this information can be overwhelming and time-consuming.
Limited Resources: Many nonprofits operate with limited staff and budget, making it challenging to dedicate the time and resources needed for effective grant tracking.
Data Management: Managing large amounts of data related to grants can be challenging, particularly when it comes to ensuring accuracy, completeness, and security.
Compliance: Nonprofits must comply with various laws and regulations when using grant funds, and failure to do so can result in fines, legal penalties, and reputational damage. Keeping track of these requirements and demonstrating compliance can be challenging.
Evaluation: NPOs must evaluate their grant programs to ensure they meet their goals and make the most of their resources. This requires collecting and analyzing data, which can be difficult when there are gaps in tracking or incomplete records.
3. Difficulty Collaborating and Expanding
Usually, a single person in a nonprofit manages and tracks their first grant. While this works fine with a small-sized NPO, as the size increases, they’ll have an increasing number of people working on grant- managing, writing, reporting, tracking, and coordinating.
Lack of a central, streamlined, and uniform platform for grant tracking and management could result in multiple challenges. These include redundancies, workflow bottlenecks, miscommunication, and errors. As a result, NPOs might face compliance issues with reporting requirements and fail to make the most of the funds they receive.
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4. Data Security
Cybersecurity is still a debilitating challenge for many nonprofits. A report by NCSC states that there is a culture of trust in nonprofits, creating opportunities for cybercriminals to deploy harmful tactics. A single instance of cyberattack could cause irreparable damage for NPOs, including their mission-critical accounting data, resulting in loss of funds and donor trust. In a nutshell, cybercrime negatively impacts the community at large.
5. Inability to Remain Cost Efficient
Every nonprofit relies on funds to survive. Raising funds and being cost-efficient are undoubtedly among their most crucial objectives. The cost of deploying and setting up an on-premise Sage 50 solution doesn’t allow NPOs to be cost-efficient. Moreover, massive investments in hardware systems to store data and keep a steady flow of accounting processes keep them from being economical. Plus, they need to hire in-house IT professionals to maintain the upkeep of servers and resolve any software-related issues.
Top 5 Internal Frustrations Nonprofit Finance Leaders are facing
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How Sage 50 Hosting Overcomes These Challenges?
While many NPOs leverage Sage 50 Nonprofit Accounting to meet financial reporting requirements, manage fundraising and donor outreach, and protect mission-critical information, hosting Sage 50 on the cloud fetches added benefits.
Financial Reporting Gets Easier
Sage 50 hosting allows businesses, including NPOs, to access their financial data from any device with an internet connection, allowing them to monitor their financial performance in real-time. It also simplifies the financial reporting process by automating many manual tasks, such as generating financial statements and reports. This significantly reduces the time and effort required to complete financial reporting tasks. Additionally, Sage 50 hosting allows NPOs to easily share financial data with external stakeholders and partners, making it easier to collaborate and track performance.
Moreover, hosted Sage 50 provides NPOs with powerful analytics tools that help them analyze their financial data and identify areas for improvement. The hosted solution also allows NPOs to easily create custom reports and dashboards, giving them a better understanding of their finances and enabling them to make more informed decisions.
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Simplified Grant, Fund, and Donor Accounting
Hosted Sage 50 simplifies grant, fund, and donor accounting for nonprofits by providing a cloud-based alternative to traditional accounting applications. It streamlines managing funds and tracking grants, donations, and other financial transactions. By hosting Sage 50 on the cloud, nonprofits can avoid purchasing and maintaining an on-site server, which can be time-consuming and expensive. Instead, they access the system remotely for maximum flexibility and portability.
Furthermore, Sage 50 on cloud provides easy-to-understand financial reports that allow nonprofits quickly analyze their finances and gain valuable insights. They can generate reports from donor lists, grants, funds, and other sources while sharing them with other departments within the organization. The system also provides detailed budget and fund management features, allowing nonprofits to monitor their budget and grow funds efficiently.
Donor Databases and Financial Systems Integration
When an individual donates, NPOS must integrate these details with the financial framework and benefactor database. On the off chance that these frameworks don’t work together, staff in an NPO needs to enter the data multiple times or move information in and out. Manual entry of data is a tedious, time-devouring assignment and may bring about errors.
Hosted Sage 50 helps NPOs collaborate with their entire business systems with two-way, system-to-system correspondence. They can build a custom association amongst their current donor database or pick a solution with a pre-fabricated association in the Sage marketplace. Integrating these solutions reduces data entry and gives significant financial insights into NPOs’ donor database – an excellent opportunity to increase and reward donor engagement.
Optimum Levels of Security
Hosting Sage 50 on the cloud helps nonprofits maintain top-notch data security by providing several key benefits:
- Data encryption: Reliable cloud hosting providers typically use advanced encryption methods to protect data stored on their servers, ensuring that it is secure from unauthorized access.
- Regular backups: Sage 50 hosting providers typically perform regular backups of data stored on their servers, ensuring that nonprofits can quickly recover their data in case of accidental loss or corruption.
- Access control: Cloud providers typically offer robust access control features, allowing nonprofits to restrict access to their financial data to only authorized individuals.
- Compliance: Many cloud providers comply with various regulations such as SOC2, HIPAA, and PCI-DSS, helping nonprofits comply with the regulations.
Overall, hosting Sage 50 on the cloud provides nonprofits with a secure and reliable way to store and access their financial data while also allowing them to focus on their mission and goals.
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Being economical is vital for every business, especially NPOs, as they must make the most of their limited resources. Nonprofits rely on donations and grants to support their operations and programs, so they must be mindful of how they spend the money they receive.
Hosting Sage 50 on the cloud eliminates the need for expensive on-premises hardware and IT resources. Cloud hosting allows nonprofits to access the software and data remotely, reducing the need for costly IT infrastructure and support. Sage 50 cloud hosting also provides automatic software updates and backups, which helps lower maintenance costs and minimize downtime. Furthermore, NPOs can opt for a subscription-based pricing model, which provides cost predictability and allow them to budget for technology expenses more effectively.
Scale Up Your NPO’s Accounting Capabilities with Sage 50 Hosting
There are many ways that Sage 50 hosting enables NPOs to maximize stewardship and deliver convalescent mission impact. From offering efficiency gains, more significant insights, and the adaptability to deal with changing circumstances, hosted Sage 50 enhances the overall efficiency of the accounting workflow for NPOs.
Wondering how Sage 50 hosting can vanquish your NPO’s financial challenges? Let’s talk!