True Fund Accounting and Why MIP Matters
What makes accounting software “nonprofit accounting software” and are they all the same?
Many of us can get terribly confused when researching accounting software for nonprofit organizations. Some solutions in the marketplace state that a product is “built for nonprofits” and there are others that claim to “work well for nonprofits”. How are we to choose—and does it even matter?
The short answer is that it does matter. Nonprofit accounting typically has several distinguishing features from for-profit accounting and if your accounting solution cannot perform these tasks, you will have to create a work-around. Here are some critical characteristics that nonprofits should consider when evaluating the suitability of a software solution for their organization:
- Consistent with FAS 116, can you effectively segregate activity according to the nature of donor restrictions? In nonprofit accounting software, expect the system to facilitate this process in some manner, particularly the closing of restricted funds to the proper designated net assets account.
- For the Statement of Activities and 990, are you able to distinguish between expenses according to whether they are related to programs, fundraising or management & general activities? You need to be able to accurately record or allocate expenses to the proper bucket or you will end up doing a lot of work later to sift through it for financials and 990 purposes.
- Ability to accurately budget and report on restricted grant funds. This may include the ability to track grant budgets and activities on a different fiscal calendar than what you may use at your organization. In a good nonprofit accounting software package, building budgets and running reports for those restricted funds across fiscal years should not only be possible—but relatively straight-forward.
Many of the requirements of nonprofit accounting go beyond simple software features and capabilities and can only be met fully with appropriate systems and processes for your overall organization. At JMT, we recommend MIP Fund Accounting to our clients because it is specially designed for a nonprofit’s accounting needs. Not only is MIP technically capable of handling the unique requirements of nonprofit accounting, it is highly praised by its users.
MIP was recently named a Top-Rated Accounting and Budgeting solution for nonprofits by software users, based on more than 880 user reviews and ratings on business software research platform, TrustRadius.
TrustRadius is the most trusted research platform for business technology based upon in-depth user reviews. The Accounting and Budget Software TrustMap™ is a visual depiction of the best software products as rated by users on TrustRadius within each market segment.
Abila MIP Fund Accounting is true fund accounting™ It contains a multi-dimensional and flexible chart of accounts that provides organizations with detailed coding and tracking of all financial activities with unlimited segments or dimensions.
If you want the best for your organization call us today at 888.368.2463. Interested in seeing a demo? Click here.