Nonprofit accounting software helps manage financial affairs, record donations, pay bills, generate financial reports, and process payroll. It simplifies record-keeping, ensures compliance with laws, and is cheaper than hiring professionals. It also streamlines fundraising activities and integrates with the web.
Nonprofit accounting software refers to web-based or desktop software that nonprofit organizations can use to manage their financial affairs. Some of the features include the ability to record and track donations, pay bills, and generate balance sheets and other financial reports. There are some software programs that allow a nonprofit corporation to process debit card transactions without the need for additional equipment. Companies often offer different software based on the number of users and whether it will be used in multiple locations. For example, if the software is web-based, the nonprofit can purchase licenses for each user.
The accounting aspects of running non-profit organizations are critical for legal and tax purposes. The collection of donations and government grants at a certain level is often subject to regional and national laws. Accurate record keeping is often essential where there is an audit by a government tax agency to demonstrate that the accounting is done properly and in compliance with applicable laws. Nonprofit accounting software simplifies the record-keeping task and may be your organization’s best chance at keeping accurate and complete financial records of all transactions. It’s the reason non-profit organizations often choose to use it rather than using spreadsheets or paper.
A key function of some nonprofit accounting software is payroll management. The organization’s employees receive a payslip on a regular basis, and the bookkeeping necessary to produce a finalized and accurate payslip that complies with tax laws can be extensive. For example, non-profit organizations may be required to withhold certain portions of paychecks for state and federal taxes and payment group health plans and other benefits. Software can be used to process payroll faster and often more accurately than manually doing the calculations for each paycheck. You can often file the necessary tax return forms using the same software, and paying a one-time fee for the software or a monthly license is often cheaper than hiring a tax professional or payroll service to complete the same tasks.
Managing finances related to fundraising activities can sometimes be overwhelming for the people tasked with managing them on behalf of the non-profit organization. Nonprofit accounting software can streamline the process of planning a fundraiser, as well as set up the expense and donation accounts needed to process transactions. Some software also integrates with the web to receive submissions and automatically populates the software.
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