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Make your New Year's resolution work with cloud accounting software

How successful, historically, have you been with your New Year's resolutions? The sad story is that most people struggle to stick with the plans - the most popular of which are usually related to fitness/weight loss and personal finances, as per a 2015 Nielsen study - that they commit to around the same time the ball drops in Times Square.

The math on New Year's resolutions, and what it means for nonprofits

While more than 40 percent of Americans make resolutions of some kind, only about 8 percent of them end up achieving what they set out to accomplish, according to researchers from the University of Scranton. In fact, after just one week into the typical new year, more than 25 percent of resolution-makers have already given up.

There are as many causes of failure here as there are days in the calendar year:

  • Some New Year's resolutions are simply too ambitious ( e.g., "become an NBA star," which would require an enormous personal and professional makeover, to say the least) to ever be realistic.
  • Others may indeed be doable, but only with additional changes to daily habits - like work and exercise - that the resolver might not be accounting for just yet on New Year's Day.
  • Lengthy bucket lists can actually be counterproductive, since their vast scope puts a lot of pressure on you while also distracting you from specific goals - you could say it's a case of missing the trees for the forest.
  • Vagueness is the enemy of a good resolution. If you don't have something tangible in mind, with a feasible way to measure your status, then you can end up not even knowing if you succeeded or not.

"We say if you can't measure it, it's not a very good resolution because vague goals beget vague resolutions," said John Norcross of the University of Scranton, according to a January 2013 Forbes contributor network article.

On that note, let's return to our initial question. If you had a better tracking system to support your goals, would you get better results with your New Year's resolutions? For the many nonprofit workers who are resolving to simplify their organizations' financial processes this year, the answer is "yes." The challenge, as it is for every planner each New Year's, is pairing a solid resolution with a sound supporting infrastructure.

New Year's resolutions are tough to accomplish without a good plan and supporting infrastructure.

New Year's resolutions are tough to accomplish without a good plan and supporting infrastructure.

Nonprofits suffer from many particular pain points, from constrained budgets to over-reliance on ad hoc requests to IT for critical data. As such, there is a clear opportunity for them to draw up actionable 2016 resolutions. Unfortunately, the tools they often use for working around these problems, such as Microsoft Excel sheets, Post-it notes and expensive on-premises accounting software, are not up to the job. These utilities are the finance team equivalents of overlong bucket lists and "I'll do some exercise this year"-style goals.

The unique challenges of nonprofit accounting

Nonprofit accounting requires careful planning and communication between teams, especially because it frequently has different requirements than other types of small business accounting. For example, donor-restricted funds have to be properly tracked and their earmarked dollars must be directed at the right projects. Teams also often need more than just income and cash flow statements to ensure that all of their bases are covered.

On top of these challenges, nonprofits also face increased scrutiny from the Internal Revenue Service, as well as difficulties in integrating various management systems with their core financial applications. Let's run through a few sticking points that could bog down nonprofits' optimism in the new year.

Getting systems and applications to work together
Did you get a tablet, phone, gaming console or smart TV this holiday season? If so, did it have all the apps you needed? While consumers can usually access what they need on a given computing platform - e.g., a popular productivity suite, or an app that lets them sign in with their Facebook accounts - things aren't as simple or finance teams at nonprofits.

Complex business logic may be required to ensure effective integration between your accounting system and major third-party applications such as Orange Leap and Salesforce. Nonprofits often must take this route to integrate their financial systems with their counterparts at churches, donors, etc. Making it all work can feel less like actually using that new console or TV, and more like trying to plug in and arrange the mess of cables and connectors that came with it.

"Basic billing software and spreadsheets cause many problems."

Managing and reporting on donor-restricted funds
Just as it is easy to lose track of your New Year's resolution mere days after making it, it is all too common for nonprofits to run into troubles with their funds because they rely on basic billing software and spreadsheets. Updates to revenue recognition calculations, creation of billing schedules and compliance with relevant regulatory legislation are all challenging when working with limited tools.

Accountants need better ways to track their donor-restricted funds. Pre-built libraries of reports are a good starting point, since they can help give stakeholders, such as executive staff and a church board of elders, the right kind of reporting they need for understanding their current positions.

Managing ad hoc requests to the IT department
If you have ever ordered a Christmas gift at the last minute on a website like Amazon.com, you may have experienced the anxiety that comes with wondering if your package will arrive at its destination in time for the big day. Something similar often happens to nonprofit finance teams, albeit related to getting reports from IT.

For whatever reason, IT often ends up holding the keys to the critical financial data in nonprofits, along with the ability to make any necessary changes to the company's software. IT undoubtedly has an edge over the rest of the organization when it comes to technical skills, but the silos separating it from everyone else result in delays and cost overruns.

Making the nonprofit New Year's resolution work with cloud accounting software

As we said earlier, there is fertile ground here for an ambitious yet achievable New Year's resolution or two for nonprofit organizations - perhaps "take control of our financial software" or "find an alternative to QuickBooks." Fortunately, this is one resolution with a clear path to victory.

Cloud financial software such as Intacct addresses each of the obstacles outlined above. For starters, it provides a flexible report writer, built-in workflows and the ability to drill down into reports to view more detailed information. Moreover, the vast majority of its users have also integrated it with two or more other applications, underscoring its flexibility.

"The dimensions in Intacct have been a huge time-saver," explained Jennifer Sharp, Senior Accounting Manager at IslandWood. "We can easily track and report on all financial metrics, not just for our operating fund, but by each of our half-dozen restricted funds and individual grants. This is so much easier and more accurate than managing separate spreadsheets and will be critical for us as we expand."

Many of us will likely struggle with our New Year's resolutions in 2016, no matter what they are. Nonprofits, though, can set themselves for success in the new year with cloud ERP software that helps them better track their funds, minimize costs and share data across the organizations.

RKL Team

Written by RKL Team

Since 2001, RKL eSolutions has helped growing companies maximize their technology resources and investment. Over the years, we have helped hundreds of small and medium sized businesses as their strategic business partner. We specialize in the needs of Entertainment, Software & SaaS, Professional Services, Manufacturing, and Non Profit organizations. Our experienced consultants have a passion for making every facet of your business successful and are intent on building a long-term relationship with every client.