Unique Aspects of the Non-Profit Industry
"We've Done the Homework for you!"
 

Summary of Major Non-Profit & Government Solutions

There are many non-profit accounting software packages in the market today, however most non-profit and government organizations can use a standard accounting package to meet their needs, and many do. For example, Solomon Software and ACCPAC Advantage Series are both popular products that are widely used by not-profit and governmental organizations. The key is that the accounting software package needs to provide an account number structure with at least 4 segments – as long as this requirement is met, most of the non-profit and governmental reporting needs can be handled adequately. A minimum of 4 segments in the account number structure is necessary to account for the expense, department, sub account and funds used to pay for the expenditure. For example, assume that a school purchases a new book. This expense might be posted to the following account:

A key difference of true non-profit and governmental solutions is that they provide the ability to restrict certain combinations of these segments to help prevent funds from being improperly used. For example, assume that the Federal government had stipulated that federal funds are not to be used to pay for school football uniforms. In this case, the accounting system would reject a transaction referencing the following account number: PE Dept – Uniform Expense – Mr. Thomas’ Class – Federal funds. In this case the system would reject the entry and force the clerk to either assign the transaction to a different expense account or a different fund.

Following this example, at the conclusion of the school’s year, the school would be able to produce a report that depicts all expenditures of federal funds, with none of those expenditures violating the federal government’s stipulations.