Back to Blog

Why Evaluating and Reconfiguring Your Financial Management Software is Critical

Why is everything so hard?

 

Things used to be great.  The data entry made sense.  The reports were all configured to give us exactly what we needed.  Month end processes were efficient, routine and predictable.   Now it seems like we’re doing more and more offline in Excel spreadsheets.  Coding is confusing.  Month end is painfully inefficient and reporting is time consuming compared to before.

What happened?

When you make a substantial investment of resources in a new financial management system, you have a justifiable expectation that the technology and tools will continue to provide benefits for years to come.  For some organizations that are on a relatively stable vector, this works out.  However, for many organizations, circumstances create a material shift in the assumptions underlying the design of the finance system.

There are a lot of things that can disrupt the effectiveness of your current system design:

  • Introduction of substantially more or different sources of funding
  • Substantial growth or contraction in operating revenues
  • Functional reorganization
  • Mergers with similar organizations
  • Introduction of substantially different programs or services
  • Key personnel turnover

Besides these factors, the march of time also introduces external pressures on the organization such as new regulatory requirements, technology shifts and new funder reporting expectations.

A common logical pitfall is to assume that the software in place is no longer the right fit for your organization’s requirements.  While this is sometimes true, most of the time it is not.  In order to realize the full potential of the tools at your disposal, it is essential to periodically reevaluate how you have deployed the system including:

  • Is the Chart of Accounts design optimized for your ideal operational and financial reporting structure?
  • Are you fully utilizing the applications and components that make up your current system?
  • Are there optional applications or 3rd party tools available that could materially improve your financial management effectiveness?
  • Is the finance system working well and seamlessly in the context of the entire back office application environment?
  • Is your team properly trained to take advantage of what you have?

JMT recommends that all organizations reevaluate their financial system at least every 3-4 years to ensure that the system is, in fact, optimized in the context of the unique requirements and business processes of the organization.  We routinely help our clients through this process and what most have found is that it has breathed new life into their systems without having to go through the cost and painful process of evaluating and converting to another system unnecessarily.

Related Posts:
Nonprofit CFOs Shape their Legacy by Defining and Communicating the Big Picture
October 15, 2019
Nonprofit CFOs Shape their Legacy by Defining and Communicating the Big Picture

You are the CFO of a nonprofit that’s focused on long-term mission fulfillment, financial sustainability, and organizational independence. How do you guarantee that your legacy is aligned with the organization’s long-term success? You may have thought that years of successfully ensuring your debits equaled your credits, that audits ran smoothly, and that financial reports were…

The Three-Step Program to Paperless Efficiency
April 21, 2020
The Three-Step Program to Paperless Efficiency

This post was published as part of our guest blog series by Altec, the provider of DocLink — a robust document management and workflow solution helping businesses manage their document lifecycles from start to finish. We are excited to welcome them as a exhibitor at our annual INNOVATE 2021 conference next year, and thank them…

How Finance Can Support Traveling Nonprofit Employees
August 10, 2017
How Finance Can Support Traveling Nonprofit Employees

Running a nonprofit means having meetings.  And many of those meetings mean travel.  Whether the purpose of the trip is to scout a new location, visit a major donor, or cementing a partnership with an affiliate, it’s important that traveling workers have what they need to make their journeys successful.   According to current statistics,…

The True Costs of Nonprofit Budgeting with Excel
February 23, 2018
The True Costs of Nonprofit Budgeting with Excel

Excel is the go-to reporting and budgeting tool for countless finance teams, including financial planning and analysis (FP&A) professionals. In fact, there are more than one billion users worldwide—that’s about one in seven people! Excel is comfortable and familiar, but for growing nonprofits, it can be a real drag on your budgeting processes and productivity….

 Back to Blog