Nonprofit Financial Management Tips for Buying Software

Part of nonprofit financial management is ensuring that your organization’s funds are spent prudently. That includes, of course, both saving where it matters and spending on what counts. When it comes to software, you may be saving a penny to spend a dollar later if you cut too many corners.

You can purchase software on a budget. The key is to use a streamlined process for software selection. There are many software choices for nonprofits today to help them with everything from accounting to grant management. Some software provides comprehensive, all-in-one management; others allow for easy integration of additional packages so, as funds become available or needs change, you can update and upgrade your software.

The Software Selection Process

The software selection process for any organization begins by ascertaining the need. Why do you need this software?

A few reasons why you may need to upgrade your software include:

  • We’re spending too much time on manual tasks such as updating spreadsheets when software could simplify that task.
  • We are making mistakes because we do everything manually.
  • We are spending hours to record activities and build reports on grants, donations, and other updates when we could run such reports with the push of a button.
  • Our current software is obsolete, no longer supported, or unable to run on new equipment.
  • We have maxed out our user license and cannot add any more.

These are all excellent reasons for upgrading your software.

Can You Scrimp or Should You Splurge? Rush or Take Your Time?

You probably have a budget in mind for your purchases. Before going shopping for new software, there are a few more questions you’ll need to ask yourself:

  • Will the new software be deployed through the organization?
  • Will this software change how our organization functions in any significant way?
  • Will shifting to this software take time or additional investments?
  • Will we need to send people for special training to manage this software?

If you answered “yes” to one or more of these questions, then you may be looking at a more significant investment of time, money, and resources for your software selection process.

Any software that will change how you conduct your business, or software that requires additional investments of time or resources, should be selected based more on quantity than cost. That’s easy to say, we know, but important to mention. If you skimp on the investment or rush to pick a package for your organization, you may come to regret your choice.

New Software or Make-Do Software?

Another important question is whether you actually do need new software or whether you can make do with the software you have. Often, an organization will buy new software when a package they already own may have the functions they need—they’re just not aware of them.

Start by making a list of the reasons why you want to buy new software. Then, take an inventory of what you have now. Can any of the software packages or subscriptions you currently have add the functions you need?

Ask Other Nonprofits

Another step to take is to ask other nonprofits what software they are using. It helps to get a sense of which products other, similar organizations have chosen and why they like or dislike them.

Online studies can also help you find software that meets your organization’s needs. Idealware, TechSoup, and Nonprofit Matrix provide resources to assess nonprofit software.

Pick Your Package and Test It

Once you’ve decided on the package that meets your needs, imagine how you’ll use it in your daily work. Gain consensus among the people and departments who will use it if it meets most of their needs.

Few software packages meet 100% of the needs of an entire company, and this is where you may need to compromise on certain features. Once you’ve chosen the package, purchase it. Ask about support, training, and warranties, and return policies if you feel it just doesn’t meet your organization’s needs after you’ve given it a fair trial.

Buying software can be a scary process if you’re investing your organization’s hard-earned money into the unknown. By taking these steps and doing your due diligence, you’ll be able to find great software at an affordable price.

Looking for Software? Beck & Company Can Help

We offer nonprofit accounting audit services, financial management, accounting, tax and other consulting services to help nonprofits thrive. This includes software selection.

Since 1987, we have helped many nonprofits in the Washington D.C. area and along the Eastern seaboard with their accounting and financial management needs. We provide audit, tax, accounting, and consulting service that addresses all aspects of a small to mid-sized nonprofit organization’s business. Contact us or call 703-834-0776 x8001.

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