But how do you know which one to choose? The best way to find accounting software is by determining your specific needs and finding out which products meet those needs. Which functions are essential for the smooth running of my school or college? What kind of training will I need to use the software? How much will the accounting software cost me including ongoing costs?
Does it offer free support? What are other users saying about it online? The answers to these questions should help you narrow down your options and find the right school or college management system for you. Accounting in schools is usually done by a school-based accounting system, which is off-the-shelf software that has been tailored for schools.
However, many schools use commercial software like ACTC 50 which was created by Microsoft or QuickBooks which was designed for general use. Sticking to fund accounting best practices will allow your institution to:. Follow these fund accounting best practices to meet these responsibilities:.
To run a nonprofit organization successfully, you need your entire team to be on the same page. By keeping each person in the loop, you can ensure that everyone has a clear understanding of how to track your various funds and how they can be used. Fixing ongoing errors after they occur can be costly and painful. For example, if your bookkeeper does not understand how to track the expenses or income for the funds, you may struggle to undo the damage later.
To get your team on the same page, follow the steps below:. Nonprofit organizations with several restricted funds or operating reserve funds should use the fund accounting method for reporting purposes. By using the class tracking functionality, you can ensure funds are used properly per any restrictions, capture expenses and revenues relating to specific funds, and eliminate the disorganized bookkeeping that can occur when the right controls and processes are not in place.
Class tracking functionality can help you stay accountable and streamline reporting obligations. You can generate profit and loss statements and organize them by class for board members and funders, making it easier to review the expenses and revenues for specific funds. If someone makes an allocation error, catching it early will help your team correct it and prevent mistakes from happening in the future.
By setting up separate accounts that your nonprofit can use for regular banking, you can easily track expenses and interest income related to specific funds. Using separate investment and bank accounts provides many benefits:. Creating a document to summarize your funds can help keep the reporting requirements and restrictions for separate funds clear to staff and management. This single central document can allow your nonprofit organization to maintain consistency in preparing and recording your financial reports.
Our industry-leading fund accounting solution can provide comprehensive financial oversight and help your educational institution achieve its goals. Our fund accounting software includes:. We offer organizations an adjustable chart of accounts designed to record and report on various funding sources. When you equip your educational institution with a fund accounting solution, you can better engage donors, improve financial decision-making, and operate more efficiently.
The features of our software solution will allow your school to:. Sales: 1. Guide to Fund Accounting for Educational Institutions. Guide to Fund Accounting for Educational Institutions Accounting is complex for any educational institution.
What Is the Purpose of Fund Accounting? Permanent funds: This fund is for financial resources with earnings that can only be used to support government programs. Debt service funds: This fund accounts for money intended to cover principal and interest. Capital projects funds: This fund tracks money intended to be used for capital outlays. Special revenue funds: This fund is for the proceeds from targeted revenue sources with a commitment for expenditures that are not capital projects or debt services.
The following funds are included in the category of fiduciary funds: Agency funds: Also known as custodial funds, these report on financial resources held in a custodial capacity in which funds are received, invested temporarily, and then remitted. Private-purpose trust funds: These funds report on trust arrangements in which private organizations, other governments, and individuals are the beneficiaries.
Employee benefit trust and pension funds: This type of fund reports on assets held for employee benefit plans, pension plans, and other post-employment benefit plans.
Chapter 1: The Benefits of Fund Accounting Fund accounting can serve various purposes and offer several benefits to nonprofits and organizations in the education sector. Nonprofits and businesses have different financial structures. Nonprofits have faced difficulties due to weaknesses in accounting controls, not accounting principles. Benefits of fund accounting software include: Accountability: Donors can keep organizations accountable via financial statements, ensuring the organization is utilizing donations properly.
Every contributor wants to know that a nonprofit serves individuals who need assistance. At the end of the fiscal year, the nonprofit issues financial statements that donors can view to assess the performance of every fund. Asset isolation: With fund accounting, you can isolate assets to meet a designated purpose. Allocation system: With a powerful allocation system, you can efficiently manage every dollar. Prepare for an audit: With fund accounting software, your educational institution can efficiently and accurately prepare for an audit.
Balance funding sources: You can easily identify and balance your various funding sources. This is a crucial function for nonprofits. Built-in reports and dashboards: The built-in reports and dashboards are configurable and allow your educational institution to customize the financial management process.
Your fund accounting software should be able to deliver reports that demonstrate responsible spending. A fund accounting system with several sophisticated reporting options and customization capabilities can give your organization the advantage it needs. Transparent compensation tools: Employees will be grateful for the transparent, easy-to-use compensation tools available.
Ability to create unlimited budget scenarios: Create as many budget scenarios as you need to scale your financial management as your organization grows. Reduce human errors: Since fund accounting software automates so many steps, your organization can reduce the number of human errors in calculators.
Lower operational costs: You can reduce labor costs by centralizing information and automating specific tasks. When you centralize information in a single software, your team can work more efficiently. Greater accessibility: Shifting from manual methods to accounting software can improve accessibility, making it easier for staff to enter information and collaborate on tasks. As a result, this is especially beneficial for schools purchasing this software for the first time and have been solely using manual methods.
School districts with multiple campuses will especially find a fund accounting software solution valuable due to the increased accessibility compared to paper-based recordkeeping.
More accurate forecasting: Using a single system can help you prepare accurate financial forecasts and generate more precise results. Since disparate systems can result in non-standardized data, fund accounting software can be a worthwhile investment if you want more accurate, standardized data. What Is the Rationale for Fund Accounting? Chapter 2: How to Choose the Right Accounting Software Previously, bookkeeping was a paper-based process that involved a ledger and countless columns to record the essential financial data of an organization.
How to Choose the Right Accounting Software for Your Organization Any organization can benefit from utilizing the proper accounting software. Consider Your Accounting Software Options You should identify what accounting software options may be a good fit for your organization.
Management software: Software programs for management offer more features but also tend to be more expensive. Functions include inventory control, billing, customer relationship management, enterprise resource management, and purchasing.
Payroll software: You may want to invest in accounting software to help you manage payroll. You can buy many software programs online or off the shelf and have the accounting tools and reports needed for your payroll.
Web-hosted accounting options: Some online applications can offer effective accounting solutions for nonprofits. The model of software in the cloud is growing and can help you manage your finances.
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