Nonprofit finance teams need more — more people, more data, and more resources. Often, nonprofit finance departments are working within older systems, or just Google Sheets or Excel, and execute time-consuming, recurring manual reporting and planning processes. Teams are juggling multiple funding sources, the need for meticulous and transparent reporting, and mitigating risk while being accountable to donors. The time spent on repetitive manual work hurts mission-driven teams’ ability to make the transformative impact they’d be capable of if they had more time. That’s where modern FP&A budgeting, forecasting, reporting and planning solutions come in.
Next-generation FP&A software tools give finance teams more by being a single source of truth and enabling them to efficiently handle larger data sets, collaborate better, automate workflows, and plan more effectively. Many next-gen FP&A software solutions are available, and it’s crucial for finance teams to familiarize themselves with the choices and complete an in-depth evaluation of potential providers.
For a complete guide to evaluating FP&A software + a downloadable checklist for the evaluation process, check out our Nonprofit FP&A Software Buyer’s Guide.
Why modern FP&A software?
FP&A software helps teams bring multiple data sources to one source of truth and collaborate more effectively with cross-functional partners to inform budgeting and financial planning. Next-generation FP&A solutions like Vareto help teams increase accuracy and productivity, make decisions more effectively by using real-time data, and collaborate better.
Remove bottlenecks in decision-making
FP&A software’s ability to act as a single source of truth while automating many manual and recurring tasks can help reduce errors while saving significant time. Finance teams can leverage integrations with ERP, CRM, HRIS, and other tools to bring previously siloed data directly into one platform and give internal team members access to specific reports and dashboards—empowering them to access relevant reports and dashboards. Additionally, the collaboration features in FP&A software can increase transparency and trust between finance teams and program managers by reducing friction and back-and-forth delays.
With these capabilities, nonprofit finance teams that are stretched thin manually creating recurring reports for multiple stakeholders while fielding one-off requests can free up time to focus on more strategic work, ultimately making a bigger impact for the communities you serve.
Make better decisions with real-time, easily accessible data
Real-time access to financial data, reports, and insights promotes informed decision-making, allows teams to adapt quickly to changes in funding, and supports accountability in reporting. The annual planning process is painful for many finance teams, often taking months of time-intensive manual work, tracking down inputs from a variety of stakeholders, and ensuring the accuracy of the plan. Now, as macroeconomic conditions are increasingly unpredictable and adjustments need to be made continuously, teams are struggling to keep up—let alone be ahead of the curve. The best operational plans are reviewed regularly and updated on a rolling basis to account for the next 12 months, and access to the real-time data in modern financial reporting tools makes rolling forecasts easier.
Ensure compliance with grant and donation restrictions
Grants and donations often come with spending restrictions, but it can be difficult to track and manage efficiently. FP&A software can track the allocation and utilization of funds in real-time, allowing the organization to ensure that donations and grants are being used in compliance with the stipulated terms. If any discrepancies occur, it's easy to identify them and correct them in a timely manner. This makes it easy to diligently track expenses and understand how to keep administrative and fundraising expenses low, enabling a larger portion of donations to be dedicated to driving impact.
Improve accuracy and transparency
Since modern FP&A tools are utilizing integrations to pull in data, it reduces the chance of human copy-and-paste errors. These tools also make it easier to dive deeper, enabling teams to see transaction-level data and other granular reports in just a few clicks.
Modern FP&A software enables finance teams to create custom metrics and visualizations, including dynamic reports, allowing everyone on the team to be on the same page, looking at the same data and definitions in real-time.
FP&A software solutions also can make it easy to provide partners, donors, grant institutions with insight into commitments, revenue, sponsorships, expenses, and more. Automated reports and custom visualizations can powerfully showcase impact and responsibility in real-time.
Evaluating potential FP&A software providers
Many different FP&A software tools are available with different feature sets and capabilities. Take the time to research all your options to find the best FP&A software for your specific needs. During the evaluation process, you’ll have the opportunity to demo the product and ask questions. Make sure to ask about the following:
Functionality and capabilities. Evaluate how the solution can support and improve current processes. Teams should get into the details of each provider’s offerings and ask specific questions to help them understand how the solution can help them achieve their goals.
Onboarding process. Implementing an FP&A solution is inherently time-consuming and requires some complexity, but the onboarding process shouldn’t be painful. The FP&A software provider should have a plan in place for your organization’s onboarding and should be able to give detailed answers to your questions.
Ongoing support. Will you have a dedicated point of contact committed to your team’s success? If so, how knowledgeable is that person about finance?
User-friendliness and ease of use. FP&A software is meant to improve efficiency, meaning it should be easier than what you previously did. There’s always a learning curve with new platforms, but the software shouldn’t require learning a whole new language.
Collaboration. Improved collaboration is a core benefit of the newest generation of FP&A software. It should be easy for both finance and program managers to use and understand. A platform that acts as a centralized place for working and reporting provides better transparency and accuracy and reduces back and forth between teams.
Pricing. Ensure you understand the total cost involved, not just the initial cost for the software. Find out if the software provider has flat, all-in pricing or utilizes a packaged, price-per-seat approach. Is the quoted cost all-inclusive, with access to unlimited feature sets?
Security. Remaining compliant with FASB and IFSB is top of mind for most finance teams. Don’t forget to ask about the security practices for the tool and whether or not the software is SOC 2 compliant.
Reputation. Research a proposed vendor’s reputation and ask for current customer references.
