When every dollar originates as a donation, it is essential to go the extra mile in accountability and stewardship.
But do manual accounting processes have your finance team spending too many hours double-checking donations, invoices, and payments while lacking time for strategic work?
If you answered yes, it’s time to step up your financial automation.
Improving nonprofit internal processes with financial automation has never been more important.
Automation helps provide valuable data insights for financial decision-makers.
Ultimately, automation enables efficient operations, allowing nonprofits to allocate more time and resources to deliver on their missions.
Here’s what we’ll cover
Nonprofit financial automation
With a modern cloud accounting system, nonprofits can automate many key areas to reduce stress and boost efficiency.
To maximize quick productivity wins in the finance department and enhance visibility across the entire organization, address these areas of automation first:
- Accounts payable automation – Streamline workflows such as vendor setup, bill entry, purchase and payment approvals, and allocations while minimizing manual data entry.
- Donor management and fundraising automation: Gain insights into your donors and their motivations, engage donors with better communications, and design more effective fundraising campaigns to enhance donor relationships and strengthen giving.
- Grant tracking and management automation: Track grants and expenses, manage restricted grants, automate billing for direct and indirect costs, and maintain real-time visibility into budgets and expenditures.
Let’s explore these three key areas in more detail and identify some quick wins your organization can obtain with nonprofit finance automation from Sage Intacct.
Accounts payable automation
Want to improve productivity and employee satisfaction within your accounting team?
Accounts payable is one area where automation reduces or eliminates a tremendous amount of manual data entry.
Automation can also improve the accuracy of data by eliminating typos and errors.
Finally, automating AP processes strengthens and reinforces important internal controls like purchase approvals.
Nonprofit organizations need to document internal control practices and develop supporting policies.
Good internal controls dictate that one person should not have access to everything.
You need to have good segregation of duties in financial operations.
Before implementing automation technology, consider your people and processes.
It’s critical that all staff follow common data entry protocols.
This helps avoid duplicate data or inaccurate data finding its way into your accounting systems.
Vendor setup
Many nonprofits struggle with setting up new vendors in their accounting system.
For example, when you set up new vendors in the system, what are your policies for business names?
If names start with ‘the’ will you enter that word or leave it off?
How will you abbreviate address items like ‘road,’ ‘drive,’ or ‘highway’?
Quick win #1 with Sage Intacct:
Let Sage Intacct automatically assign vendor numbers rather than setting up your own vendor ID coding.
The powerful search features in Sage Intacct allow you to simply type the vendor name and quickly find what you need; there’s no need to memorize vendor IDs.
Bill entry
If you lack automation for capturing data out of electronic invoices, bill entry is a time-consuming manual task.
Members of the accounting team have to enter all of the relevant information from each bill into the accounting system, before verifying them against purchase orders and contracts.
Quick win #2 with Sage Intacct:
Save time with automated bill entry in Sage Intacct AP Automation with Ai.
Upload or email an AP bill and Sage Ai correctly identifies the vendor, amount, dates, and line items.
It automatically extracts details to create a pre-populated draft for payment approval.
Purchasing and payment approvals
Approvals are a great example of an area where automation greatly reinforces internal controls as well as improves efficiency. Use your nonprofit accounting system to automate invoice approvals and payment approvals.
This gives you control over the point where an invoice goes into your system as well as the point where payment gets made.
By making sure you pay vendors on time and consistently, your organization can take advantage of payment discounts.
Quick win #3 with Sage Intacct:
Some organizations desire a simplified purchasing process for making a one-time purchase or buying inexpensive items.
In Sage Intacct, you can turn on AP bill approval and set up the approval rules that reflect your purchasing policies for different types or amounts of purchases.
Quick win #4 with Sage Intacct:
Sage Intacct offers automated approvals on the payment side.
By turning on the AP payment approval function, you can set multiple levels of approvals based on the payment amount.
Different numbers of approvers can be designated for differing amounts of payment, allowing you to replicate the internal controls process you’ve established for your organization.
Sage Intacct automates the approval routing and collects electronic signatures.
Allocations
Almost every nonprofit organization uses allocations to spread receipts or expenditures across different programs or grants. Some allocations are very complicated.
Others are transaction-level allocations that can often be handled at the point of initial data entry.
If there is a one-line allocation entry that is complicated or often requires correcting journal entries, automate the allocation process for the transaction.
Quick win #5 with Sage Intacct:
Available in AP, purchasing, and journal entries, the single-line allocation feature auto-fills the Sage Intacct Dimensions to tag that allocation on future entries.
This is especially useful when you have unique entries that leave staff scrambling to recall how the allocation was entered last time.
In addition, Sage Intacct also offers a Dynamic Allocations module for more advanced allocations functionality.
Automated allocations functionality keeps you audit-ready and can save up to three days per month.
Donor management and fundraising automation
Without donors and funders contributing revenue, your organization’s mission would grind to a halt.
That’s why there is no more urgent area of operations to perfect than creating solid fundraising and donor management processes.
Donor management automation helps nonprofits save time and reduce administrative burdens.
It also helps build stronger relationships between nonprofits and their donors and improves internal collaboration between the finance and development teams.
Quick win #6 with Sage Intacct:
When you optimize fundraising operations, you leave more resources available to drive your mission.
Sage Intacct Fundraising powered by DonorPerfect automates fundraising workflows, including online forms automation and in-house payment processing.
It helps you cultivate stronger donor relationships through scheduling and customizing donor communications.
Utilize prior fundraising results and donor metrics to create data-driven, impactful fundraising campaigns.
Grant tracking and management automation
Government, corporate, and foundation grants remain a significant source of funding for today’s nonprofits.
Winning new grants is highly competitive; successful nonprofits must maintain flawless grant tracking and management processes to find and maintain grant funding.
Organizations have to provide transparency and reporting to satisfy grantor requirements and earn grant renewals.
Nonprofits must be able to track and account for grant funds, manage restricted grants, and bill accurately against grants.
Quick win #7 with Sage Intacct:
Automate key aspects of grant management and ensure compliance with grantor requirements using Sage Intacct Grants Tracking and Billing.
By removing paper from the grant tracking process and providing all key personnel with a comprehensive view of centralized grant data, you can streamline all aspects of your grant funding process, including:
– comparing grant budgets to actuals
– flagging reimbursable costs
– monitoring restrictions
– billing direct and indirect costs.
Final thoughts
As you can see, adopting automation within your accounts payable, donor and grant management, and financial reporting processes can greatly improve the finance team’s efficiency.
At the same time, intelligent automation strengthens internal controls, increases visibility, and helps to demonstrate good stewardship for donors.
Nonprofits can leverage advanced automation with Sage Intacct to obtain productivity acceleration of up to 40% for the nonprofit finance team and set a course for digital transformation that contributes to mission impact.
Download The Definitive Guide to Driving Nonprofit Finance Efficiency with Paperless Automation e-book for more tips about how to achieve effective nonprofit finance automation when you.
About the author
Natalie Anderson
Natalie Anderson is a senior nonprofit industry marketing manager for Sage Intacct.
With 10 years of experience in software marketing, Natalie is passionate about helping nonprofits leverage software to achieve mission success.
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