A nonprofit has a primary goal of doing more with less – for every dollar saved across the organization, that’s one more dollar that can be applied toward the nonprofit’s mission. That said, this fixation on doing more with less has put pressure on nonprofits, notably in the financial planning department.
These challenges can end up draining resources and revenue from your organization, so it’s critical to identify them and determine solutions to these challenges to get the maximum yield from your FP&A efforts.
Let’s now highlight some of the challenges facing nonprofits, and solutions that are available to them.
These challenges include:
- Excel not scaling
- Inability to access real-time data for forecasting
- Varied funding sources
Excel doesn’t scale
When most organizations are starting out, Excel makes perfect sense as a tool that can be leveraged for FP&A.
But as you grow, spreadsheets can multiply from a few dozen to a few dozen hundred. At that point, they become unwieldy and unmanageable; finance planning and analysis directors increasingly find themselves spending seemingly endless hours trawling these spreadsheets.
Worse yet, these hard-to-search spreadsheets will often be the only way to answer budget queries, run reports, develop what-if scenario planning. Couple this bottleneck with the need to track multiple sources of funding (grants, donations, etc.), and this process can end up eating away at huge chunks of the finance team’s time.
Automation is among the most obvious solutions here. By being able to delegate rote and repetitive tasks to computers, you’re freeing up your finance experts to concentrate their efforts on more critical finance concerns.
Leveraging cloud technology can also help reduce roadblocks by allowing for easier collaboration and searchability when managing your finances.
Inability to access real-time data for forecasting
Similar to the issue with collaboration above, forecasting can be a laborious, time-draining process due to the need to send emails to multiple departments and otherwise chase key (busy) organization members down for their data.
Once you have the data, you have to, of course, verify its accuracy, then incorporate it into the forecast, and by the time you’re done, the forecast may be using figures that are several weeks or months old.
That’s hardly efficient or all that useful considering your data is already stale by the time it’s incorporated into a forecast.
Getting a tool that allows you to leverage real-time data and incorporate easily into your forecasts is critical to both saving time and gleaning insights based on actionable, up-to-date data.
Varied funding sources
Cash flow for nonprofits is harder to track than for many organizations of similar sizes due to the variance in funding sources. Whereas commercial organizations need only track a few products or services, nonprofits must make note of every grant, small and large, as well as donations.
This is especially important in today’s nonprofit environment where financial transparency is critical to earning the trust of the public.
Collating and concentrating this multi-sourced data can take a long time and require a lot of double- or even triple-checking. Again, considering that nonprofits are already attempting to do more with less, this can strain already thin resources.
Being able to centralize this data with a tool or platform can help reduce these roadblocks.
What’s more, automation programs can help ensure that the data is automatically updated across multiple sheets, budgets, etc. with a single input, saving hours of time.
How Sage Intacct and Cloud FP&A software come together to facilitate FP&A for Nonprofits
While there are many challenges when performing FP&A for nonprofits, the good news is that there also exists a solution: FP&A software.
The right FP&A software can help achieve all the above, by providing:
- Automation tools
- Access to real-time data
- Collaboration tools via the cloud
- Comprehensive workforce planning models
- Forecasting tools for fundraising and rapid cash flow monitoring
- Higher visibility and transparency into your nonprofits finances
Better yet, if you’re a Sage Intacct user, you can often integrate your FP&A platform directly into your Sage Intacct system making it simple and easy for data to be shared across these platforms, again saving you time and effort.
Between the robust features of Sage Intacct and a comprehensive FP&A platform, your budgeting cycles can be cut in half, real-time data leveraged to provide insights, and your forecasting can become more sophisticated – and faster – than ever.
TEDx Conferences, for instance, is able to manage its massive network through the combination of Sage Intacct and Limelight FP&A Software.
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