Selecting accounting software can be especially difficult for nonprofit organizations. Usually the accounting staff have little to no experience with accounting software and most consultants have equally little experience with not-for-profit organizations. In addition, many of the best known packages seem expensive when you are working within the typical nonprofit budget.

Ensuring that the software you select meets your organizational needs is your primary goal. A decision concerning which tool is right for your organization needs to be based on a myriad of factors, including:

• Budget
• Existing software
• Complexity of the accounting challenge

Match Your Requirements to Your Goals

The first step in software selection is to adequately define your needs. Understand your organization’s long-term and short-term strategic goals, and identify how those goals fit in to your software selection process. Create a team of decision makers and end users to ensure that the software you select matches everyone’s needs and abilities, now and down the line.
Identify all potentially affected areas of the organization:

• Who will use it?
• Who will need to integrate with it?
• Decide how much involvement each area will have in the decision process

It is also important to create a timeline, including:

• Purchase
• Training
• Implementation

Training and implementation are equally important as the purchase decision. All too frequently, organizations fail to recognize the need for training and do not provide for an adequate implementation schedule.

Ensure that you have the proper resources to support your selection

• Do you have the budget for the initial purchase, upgrades, implementation and maintenance?
• Does the staff have the required skills to utilize the software?
• Do you have the time to properly train them?
• How extensively do you need to modify your existing business processes to conform to the new software package’s processing and reporting capabilities?

And be sure to consider additional costs:

• Additional hardware
• Additional software, advanced modules or add-ons
• Custom report creation
• Employee time and effort related to the training processes

Outline your specific vendor needs and requirements

You want to hire the right vendor for your particular situation. While the software product may be the same, the services provided by different vendors can vary significantly. Don’t assume anything.

• Will you require the vendor to perform the installation and maintenance?
• Will the vendor be needed to integrate the new software with existing software?
• Do you need to customize the software to fit within your operations and will you require the vendor to do that?
• Do you have specific and customized reporting requirements that you will need the vendor to program?

The RFP Process

Before starting the RFP process, you should have answered the above questions and request responding vendors to:

• Demonstrate how their solution falls within guidelines you specified
• Explain how they will meet your specific requirements
• Describe similar installations they have undertaken and ask to speak to those references

Create a short list of vendors that submitted proposals before assembling your decision team. There will likely be some responses that can be eliminated easily. Bring only the most qualified respondents to the entire committee.

Of course, you may also acquire software without going through a formal RFP process. This process will likely involve more of your time answering questions and interviewing possible vendors selected via referral or the internet.

Making a final decision

When your team is making a final decision, remember that you are not just buying software. You are investing in the future of the organization. Software has the potential to provide a high return on your initial investment. It can provide access to information never before available and it can streamline current processes to take a significant burden off your staff.

In making your decision, remember to take everything into consideration. Take into account ongoing training costs, maintenance, reporting, efficiencies and return-on-investment metrics. Make sure you are comfortable with all aspects of the decision, such as the selected vendor, software and hardware, and technical support. Think back to the strategic goals you outlined at the beginning of the process to help prioritize each aspect of the project. Remember that the primary purpose of the accounting software is to generate timely and accurate reports to allow you to make management decisions. As such, the design of the chart of accounts, custom reports and staff training are the most critical areas.