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3 Common Pain Points Of NPOs That ERP Software Can Resolve


Non-profit organisations (NPOs) like yours face a particularly complex challenge when it comes to managing its finances.

As the cash flow of NPOs are dependent on donor contributions and government funding, financial management is more complex for organisations like yours when compared to for-profit businesses.

As a financial controller in an NPO, these are some of the sector-specific accounting needs you’d need to handle:

  • Managing government funds and grants
  • Managing individual donations
  • Recording and reporting revenue
  • Creating compliance reports

To manage these non-profit accounting needs effectively, you’d therefore need a software solution that can provide robust financial management capabilities, such as an ERP software.


It's No Surprise That The Non-Profit Sector Is Seeing The Emergence Of Major Tech Trends. Find Out About 4 Of These Trends Here.


Accounting Challenges Faced By NPOs

Here are some accounting challenges that are most commonly encountered by NPOs such as your organisation:

1. Accountability Towards Stakeholders

Accountability Towards Stakeholders

Every organisation is familiar with the need for accountability towards their investors and stakeholders, when it comes to justifying their budgets and expenditure.

But this is especially crucial for NPOs like yours, as the grantors and funders that provide your NPO’s funding would be particularly interested in knowing how their money is being spent.

You’d have to be able to show your stakeholders how their investment is funding your NPO’s expenditures – a task they only gets harder with more stakeholders, each with different expectations.

To meet their demands for accountability, your NPO must be able to generate financial reports with all of the required information, in a timely manner.

And that cannot be reasonably achieved without the right tool to automate the financial management of your NPO.


2. Complying With Stringent Reporting Requirements

Complying With Stringent Reporting Requirements

As an NPO, your organisation is subject to accounting regulations imposed upon the non-profit sector.

And because these regulations can change quickly with little warning, your NPO will have its work cut out complying to these changes promptly.

In addition, your NPO will also have internal reporting requirements that are not dissimilar to those of a for-profit organisation’s.

This is especially the case if your NPO operates across multiple locations across the country, as you’d need to ensure that all branch locations are operating to the same standards.

With such stringent reporting requirements both for internal and regulatory purposes, manual reporting will not be sufficient for your NPO’s needs.

You’d need a tool that can automatically generate the reports you need in an accurate and timely manner, so that you can satisfy both your internal needs as well as the regulator’s demands.


ERP Software Can Help Modernise Your Compliance Function. Click Here To Find Out How.


3. Achieving More With Less

Achieving More With Less

As we’ve established, NPOs like yours have more financial management needs than organisations in for-profit sectors, due to the unique requirements of the non-profit sector.

However, as a non-profit entity, your organisation is almost certainly working on a much tighter budget than those of for-profit businesses.

This means that your finance function will be tasked to resolve your NPO’s accounting challenges with limited resources and manpower.

Your budget for IT may be limited as well, which means it may not be possible to spend too much money on acquiring a software solution to support your finance function.

In the face of these restrictions, you’d need a solution that can be acquired with a lighter impact on your budget, and/or source for a grant that can help you fund your acquisition of such a solution.


How ERP Software Can Resolve Your NPO's Accounting Challenges

How ERP Software Can Resolve Your NPOs Accounting Challenges

An ERP software can provide the accounting functionalities your NPO needs to resolve its sector-specific accounting challenges.

For an ERP software such as SAP Business One, financial features such as the General Ledger (GL) and the Accounts Receivable (AR) can be easily customised.


Should You Choose Between An Accounting Software Or An ERP Software? Here's A Comparison Between The Two Solutions.


This means you can generate customised reports that best fit financial reporting requirements specific to the non-profit sector, such as fund management, donor management and invoice management.

Alternatively, they can also be integrated with third-party reporting solutions, such as Jet Reports for Microsoft Dynamics 365 Business Central.

A solution like Jet Reports can also generate financial reports that are customised to provide the information your stakeholders need.

Therefore, with an ERP software, your NPO would be much better equipped to stay accountable to your funders and grantors, and maintain compliance with regulations in the non-profit sector.

However, there’s still the matter of funding the acquisition of an ERP software to resolve your financial management issues.

Such an acquisition might seem to be a heavy burden on the financial resources of your NPO, assuming that your organisation can afford to fund it in the first place.

Thankfully, the National Council of Social Service (NCSS) has recognised both the need for NPOs to digitalise their operations, as well as the need for more funding and support to do so.

As such, NCSS has introduced the Tech-and-GO! grant – the equivalent of the Productivity Solutions Grant (PSG) for non-profit organisations – to help you acquire the ERP software your NPO needs to resolve its accounting pain points.

To learn more about the Tech-and-GO! grant, click on the image below to learn more.


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