Managing the finances for a nonprofit organization is no easy task. In addition to standard overhead and varying operational expenses, there are any number of financial transactions that must be associated with specific programs and services or grant-funded projects.
Excel spreadsheets are used in offices all over the world and are a great way to capture and present certain types of data. Spreadsheets offer an easy way to manage information, particularly numerical and financial figures. Users can create formulas to manipulate financial estimates to establish a budget, for example, then keep tabs on spending to track proposed versus actual spending. So why is Microsoft Excel terrible for managing your budget?
The Pitfalls with Excel and Your Financial Management
It seems so simple; yet, there are weaknesses for using spreadsheets to manage budgets. There is potential for errors in the formulas, which can be easily changed or accidentally disconnected from another cell. Manually updating the data takes time – time that is likely needed for other accounting and operational purposes.
Redundant data entry between spreadsheets and other software systems can also waste time and increase the chances for errors. There is also the question of version control, who has the most updated copy of the spreadsheet and who can validate that the information is accurate and reliable?
Multiply these challenges for every program, project, service or grant-funded project that a nonprofit is managing and you’ll quickly find that spreadsheets are an inefficient and risky way to manage nonprofit financial operations.
Gain Control and Insight over Financials with a Stronger Nonprofit Management Solution
Choose the right tool for the job and deploy a modern financial management solution designed to meet the unique operational needs of your nonprofit organization. A stronger financial management solution offers greater control and insight over complicated financial operations. You can strengthen income management, even when income comes from a variety of sources, control grant- and operational-related budgets, and use this data to make realistic forecasts for future needs. Dashboards, business intelligence features, and customizable reporting features streamline financial management and reporting and provide real-time insight into multiple budgets.
Nonprofit organizations must choose the right tool for the job. Back away from your Excel spreadsheets and turn toward modern tools you can deploy to strengthen your financial management activities.
JMT Consulting, serving the nonprofit community for over 25 years, can help you make the right decision for your business allowing you more time to focus on your mission.