8 steps to choosing the right financial management software for your NFP
Is your Financial Management Software fit for your purpose?
To make the biggest difference, charities and not-for-profit entities need the right systems and processes in place to effectively and efficiently engage their existing supporters more effectively, to attract new donors to their cause and generate more predictable income streams, in much the same was as a commercial (or ‘for profit’) organisation.
What sets an NFP apart from commercial organisations is not actually whether they seek to make a profit (or a surplus in the NFP world), but where that surplus goes. Despite the title “not-for-profit”, these organisations often seek to make a surplus from their operations to fund growth and strategic initiatives that work towards achieving their purpose. It’s not dissimilar to the way in which commercial organisations operate, and in fact, financial scrutiny is often more imperative when every dollar must be accounted for and the way it is spent must be reported back to donors in detail.
And that is why world-class financial management is key for NFPs as it allows them to understand where their funds are going, and how they can better manage their operating costs and surplus to have the biggest impact on achieving their purpose.
How to select Financial Management Software for your NFP or charity
Implementing a new Financial Management Software solution is a decision you can often only afford to make once, especially when every dollar is under scrutiny. And to make matters more difficult, there are a lot of products on the market - but not all of it has been built specifically for charities and NFPs.
When searching for software for your charity be sure to take the time to understand if the software was designed to meet the needs of your organisation and purpose. Below are a few things to consider when assessing your needs and selecting a software solution that is fit for your purpose.
If you would like to read about these in more detail, download our 8-step guide to choosing the right financial management software for your NFP and charity.
Is your current system workable?
Before jumping into a business case for a whole new system, it’s first wise to understand whether your current system can be updated, upgraded or tweaked to make it more suited to your needs. If your current solution is slow, unreliable, outdated or not compliant, then it may be time to seriously consider a change.
Build the case for change
Justifying a commitment of budget and time to changing your finance system demands a structured proposal that everyone can buy into. Even if your organisation doesn’t demand this formality, the process of working through the costs, risks, benefits and success factors of the project will help you to stay within budget, on schedule, and gain invaluable stakeholder support.
Source potential vendors
You’ve built the business case and achieved funding for the project. Now it’s time to see which software packages might match your criteria.
Send out Request for Information (RFI)
Having selected potential vendors, contact them with a Request for Information (RFI). This formal document is founded on the functionality and benefits defined in your business case. The quality of responses you receive at this stage is a strong indicator of the vendor’s dedication to you, if you become a customer.
Define the shortlist
Having researched the options, shortlist those three or four providers who scored highest. Some basic functions and capabilities that every vendor/software should provide are auditability, integration, data protection and reporting.
Arrange demos
Arrange product demonstrations from your shortlisted vendors to rate their solutions against your requirements. Some questions to ask include:
- What database platform is the software built on?
- How easy is it to access the information held in the system?
- Will the software grow with my organisation?
- And what has been your experience of software implementation with other customers?
Make final checks
With your research and demos completed, a preferred vendor is probably emerging, but before making a final decision ask yourself how your vendor also scores against these key qualities; pre-sales consultancy, project management, training, post-implementation review and support.
Place contract
For final peace of mind obtain reference sites from the vendor. Visit them if possible and ask how they have benefited from the software, how reliable they have found it, how they rate its functionality and how they rate the vendor’s service. Once you’ve made your final decision, it’s time to agree a contract. Beware of hidden costs, such as the vendor’s expenses, mileage, and travel time charges and make sure that all your requirements feature in detail.