Non-profit organizations (NPOs) usually have a tough time managing their finances. Expenses especially are a main cause of stress for non-profit organization owners. With best practice regulations such as the Sarbanes-Oxley Act forced on all organizations, the last thing these companies would want is to pay heavy penalties for not complying with regulations. For this reason, NPOs have followed the steps of other organizations and started using good and advanced non-profit financial accounting software.
A Quick Look at Financial Accounting Software
Financial accounting software is a type of accounting software which enforces the best practices of accounting by recording and processing accounting information accurately. Depending on the size of the organization, the software’s modules will be different. However, for most NPOs, the following modules will be required:
Why NPOs Need this Software
First off, NPOs are required to comply with the same regulations as other organizations. The software will manage their income from the government, private organizations and other philanthropists as well as record their expenses, be they welfare program costs or the salaries of the staff.
NPOs will also be able to solve and manage complicated accounts through financial accounting software. This is important since NPOs are dependent on funding resources from external agencies and require a well-illustrated fund accounting method that helps them track the funding sources.
In addition, financial accounting software helps NPOs have a comprehensive view of all their financial data. This type of organizations usually handles bookkeeping maintenance on a separate balance sheet for each and every account. The software can help accountants and NPO owners skim easily through balance sheets and perform necessary accounting functions.
There are numerous financial accounting software packages available for a fee and for free. However, NPOs need to find the programs which suit their needs the most and ensure them of complying with regulations and the best practices.