ERP by industry

ERP software for nonprofits

Nonprofit accounting is ordinary accounting with an extra dimension that everything must be reported against: whose money is this, what were they told it would be used for, and can you prove it. Most systems bolt that on and it shows.

How many restricted funds?

Tell us your grant count and how you report functional expense today. We will be straight about whether we fit.

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Grant and fund trackingFunctional expense allocationWe name where Intacct is better

The problems

Six things we hear in the first call.

These are structural consequences of running restricted funding through a general ledger designed for unrestricted commercial activity.

Restricted funds live in a spreadsheet

The ledger holds a balance and a workbook holds which portion is restricted, by whom, and until when. Reconciling them is monthly and manual.

Grant periods do not match fiscal years

A grant running July to June against a calendar fiscal year means every report needs two overlapping period structures, and most systems support one.

Functional expense is an annual exercise

Program, management, and fundraising allocation is computed once a year for the 990 rather than maintained continuously, so nobody can see program efficiency during the year.

Grant reporting is bespoke per funder

Every funder wants a different format on a different schedule, and each report is assembled by hand from the same underlying data.

Release from restriction is manual

Recognising that restricted funds have been spent according to their purpose — and moving them — is a judgement made in a spreadsheet and posted as a journal.

Audit preparation consumes a quarter

Single audit requirements mean assembling evidence that spending matched restrictions, which is straightforward if it was tracked and archaeological if it was not.

Where the money goes

Total revenue to program spend, in five deductions.

A representative shape for a nonprofit between $5M and $30M. The functional split is the number every funder and every regulator looks at first.

100%Total revenue11%Management & general8%Fundraising6%Facilities & admin3%Unallocated72%Program spendrepresentative nonprofit functional expense split · your ratios will differ by mission
The unallocated line is the one auditors ask about

Expenses that could not be assigned to program, management, or fundraising end up in a residual that gets allocated by formula at year end. Where that residual is large, the functional expense ratio is substantially a product of the allocation method rather than of actual spending — and that is precisely what a funder examining your overhead ratio is trying to understand.

Your stack

We do not ask you to move everything.

Your donor system and grant management tools stay. What changes is that the financial side stops being reassembled by hand each month.

Consolidated into erp.io

  • Restricted fund tracking spreadsheets
  • Functional expense allocation workbook
  • Grant budget-versus-actual reports
  • Manual release-from-restriction journals
  • Board reporting pack assembly
  • Audit evidence collection

Kept and integrated

  • Salesforce Nonprofit Cloud or Raisers Edge
  • Bloomerang, Neon or DonorPerfect
  • Gusto, Rippling or Paylocity
  • QuickBooks, Xero or Intacct
  • Bill.com or Ramp
  • Grant management platforms

Benchmarks

What good looks like at this size.

Drawn from our own engagements with nonprofits between $5M and $30M. The bar is a typical erp.io customer after two quarters; the marker is the segment median.

Days to close the month
7 daysmedian 16 days
Grants with live budget-to-actual
100%median 31%
Functional expense updated
monthlymedian annually
Days to prepare audit schedules
4 daysmedian 21 days
Restricted balances reconciled
continuousmedian monthly
Bills coded by hand
7%median 81%

Restriction is a dimension, not an account

The structural mistake we see most often is restricted funds tracked as separate accounts. It works at three grants and becomes unmanageable at thirty, because every restriction multiplies the chart of accounts and none of them consolidate cleanly.

Restriction is properly a dimension on the transaction: this expenditure was funded by this grant, for this purpose, within this period. Held that way, a grant report is a query rather than a reconstruction, and the chart of accounts stays the size the organisation actually needs.

A chart of accounts with a section per grant is a chart of accounts doing a dimension’s job. It works at three grants and fails at thirty.

Functional expense, maintained rather than derived

Most nonprofits compute the program, management, and fundraising split once a year for the Form 990, using an allocation formula applied to a full year of expense.

Coding each expense to a function as it is incurred — with allocations applied continuously rather than retrospectively — means the ratio is visible monthly. That matters because a board asking about program efficiency in month seven currently gets an estimate, and because an organisation that discovers its overhead ratio in January has no remaining year in which to change it.

Release from restriction, computed

When restricted funds are spent according to their purpose, the restriction is released and the amount moves from restricted to unrestricted net assets. In most organisations this is a monthly judgement made in a workbook and posted as a journal.

Where restriction is a dimension on the expenditure, the release computes itself from the spending that satisfied it. That removes a judgement, a journal, and one of the more common sources of restatement in nonprofit audits.

What the agents do here specifically

  • Bill coding to grant and function. The two dimensions that matter most and the two most likely to be left blank when a bill is entered quickly.
  • Grant budget monitoring. Spending tracked against each grant budget with alerts before a line is exceeded rather than at the funder report.
  • Report assembly. Funder reports drafted in each funder’s format from the same underlying data, for a person to review and send.
  • Audit evidence. Schedules and supporting documentation assembled continuously rather than in the quarter before fieldwork.
Where Sage Intacct is genuinely better

Intacct has the best nonprofit functionality in the mid-market — deeper fund accounting, more mature grant management, and a large base of nonprofit-specialist implementation partners and auditors who already know it. If fund accounting is the centre of your requirement rather than the context around it, we would tell you to buy Intacct. Where we fit is nonprofits whose core problem is reporting, automation, and multi-entity consolidation, with fund tracking as a requirement rather than the whole of it.

Questions

What companies ask.

Should we buy Sage Intacct instead?
If fund accounting is the centre of your requirement, yes. Intacct is better at it and has a deeper nonprofit partner and auditor network. We say so on this page rather than after a deposit.
Do you support fund accounting?
Restriction and grant as dimensions on every transaction, with release from restriction computed from qualifying spend. That covers most mid-market nonprofits and is not as deep as Intacct.
Can you handle grant periods that differ from our fiscal year?
Yes. Grant periods and fiscal periods are independent, which is what makes a funder report a query rather than a reconstruction.
Does it help with the single audit?
Evidence and schedules are assembled continuously rather than in the quarter before fieldwork. Our customers report audit preparation falling from weeks to days.
Can we keep our donor system?
Yes. Salesforce Nonprofit Cloud, Raisers Edge, Bloomerang, and others stay where they are and are read into the graph.

We will tell you if Intacct fits better.

Send your grant count and functional expense method. Some nonprofits should buy the competitor and we will say so.