Shift Happens – Why Nonprofit Finance Transformation is Important
Nonprofit finance transformation helps finance leaders unlock the power of real-time data and automation, so they can become more strategic in their analysis, planning, and decision-making. Making the shift to finance transformation is not really about technology. Nonprofit transformation involves the pursuit of strategies and processes that empower your organization and decision-makers to achieve strengthened mission impact while maximizing efficiency and stewardship.
Rather than being the focus of transformation, technology’s role is to provide the foundation and tools necessary to implement change and enhance visibility. According to BDO’s 2021 Nonprofit Industry Overview benchmarking survey, 64% of nonprofit organizations plan to invest in new technologies. When asked about strategy, 40% said they wanted to automate operations.
When Sage Intacct surveyed nonprofit finance leaders about their top internal challenges, nonprofit finance leaders expressed frustration with inefficiencies that waste time and a lack of visibility into financial performance, outcomes, and data from other areas of the organization.
Addressing the above challenges are the five main ways finance transformation helps nonprofits increase return-on-mission:
- Automation that transforms
- Reporting that transforms
- Visibility that transforms
- Connectivity that transforms
- Collaboration that transforms
This article provides a brief overview of these five areas of digital finance transformation. You’ll find greater detail and examples from other nonprofit organizations in our eBook.
Nothing is more frustrating than having limited staff and resources, yet having their time utilized on manual, low-value work. That’s why automation is the engine driving nonprofit finance transformation. By automating routine work, staff can contribute more toward the mission. They’ll like their jobs better too—a key benefit in the current tight labor market.
Improving staff utilization and increasing organizational efficiency not only drives better results, it also ensures nonprofits exercise the best possible stewardship over funding. Here’s a sample of the benefits that automation unlocked for nonprofits using Sage Intacct for Nonprofits:
Ever feel like as soon as your team completes monthly reporting, it’s time to start pulling reports for the next month? If you do, you’re not alone. One in five nonprofits spends a full 40+ hour week on monthly reporting—that’s three months out of each year! The biggest drag on reporting time is an outdated or underpowered financial system. If you have to pull information out and manipulate it in a spreadsheet every month, it slows down the process and potentially introduces errors.
Best-in-class cloud solutions provide easy-to-use, automated reporting. Instead of circulating static reports, the finance team can provide leaders with real-time dashboards containing dynamic reports and data visualizations. Leaders stay better informed and the finance team can spend more time analyzing performance and less time formatting reports.
“Our CEO and board of directors have recognized how valuable Sage Intacct’s real-time dashboards are to the organization because they increase our credibility and help executives better manage day-to-day operations. Rather than creating dozens of different reports for various departments, we can get the right information to the right groups by putting top-level reports on a dashboard, and letting the appropriate staff or volunteers adjust filters to see whatever region, department, or sub-cost centers they care about.”
Dave Teske, Director of Finance, ACUI
Without the real-time visibility made possible by a cloud financial management solution, leaders often have to delay decisions or make them without knowing all of the relevant facts. Backward-looking reports and analysis force organizations to operate on a reactive footing rather than a proactive one.
Transforming finance with a modern, cloud nonprofit financial management solution enables staff, leaders, donors, and board members to operate with real-time insights about financial and operational performance, including outcomes and KPIs. For example, this Outcomes dashboard in Sage Intacct can be tailored for each user’s role, so it will display the most critical metrics that support mission success.
Without integration between business applications, nonprofits cannot see what’s happening from a high level across the organization. Data connectivity is an integral part of nonprofit finance transformation. Without it, data simply doesn’t flow where it is needed and that can lead to various departments keeping their own set of tools, reports and spreadsheets—a disaster for both data accuracy and information sharing.
It was often very difficult, time-consuming and costly to integrate on-premise software systems. Luckily, cloud technology is very different. Open API architecture lets best-in-class cloud applications connect easily to one another, so nonprofits can use the best applications for their organizations with confidence that data will not get trapped in disparate systems. With connectivity that transforms, decision makers analyze information in one place even though the underlying data may be flowing from many systems, including accounting, billing, donor/grant management, case management, CRM and others.
“QuickBooks and Salesforce didn’t talk to each other, and that was definitely an issue. It required a lot of double entry just to keep things synchronized. With Sage Intacct, we no longer have to do monthly reconciliations between what is in Salesforce and what is in QuickBooks. That’s saved a lot of time, and it provides a single source of truth with consistent and accurate information in both Salesforce and Sage Intacct.”
Romulo Lopez, Director of Finance, Atlas Network
When email first arrived on the scene, it opened up a whole new kind of collaboration within organizations. It’s a great tool, but with time, email also became a burden to keep up with. Endless email threads. Mailboxes stuffed full of old emails being kept ‘just in case’ you need to refer back to them later. Worst of all, much of that history and data get lost when a team member leaves the organization.
Nonprofit finance transformation should include better ways to collaborate. It’s preferable to address questions and resolve issues within the system of record. Keeping conversations inside the financial management application provides an auditable trail of information and ensures you don’t have to explain a situation repeatedly. Sage Intacct Collaborate empowers teams to communicate inside Sage Intacct to resolve specific journal entries, accounts, projects, invoices, purchase requisitions, and more.
Transforming the finance function with a best-in-class, cloud nonprofit accounting software can help nonprofits achieve a higher return-on-mission. In our rapidly changing world, it’s very difficult to make wise decisions without the automation, reporting, visibility, integration, and collaboration made possible by nonprofit finance transformation.
Sage Intacct has helped thousands of nonprofits move forward in their digital transformation journeys. To learn more about how to unleash the power of real-time data, download our eBook, The Road to Nonprofit Finance Transformation Success.
Natalie Anderson is a senior nonprofit industry marketing manager for Sage Intacct. Natalie has 10 years of experience in software marketing and is passionate about helping nonprofits leverage software to achieve mission success.
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