In the last decade alone, the accounting industry has seen general ledgers evolve drastically from paper and Excel-based programs to more sophisticated platforms. But even with the widespread availability and cost-effective features of these new tools, many nonprofits are still relying on general ledgers that are local to the organization’s devices or housed in onsite servers that require VPN login when working remotely.
The COVID-19 pandemic was a stark reminder of the limitations these systems impose on a finance department’s efficiency and functionality. As workforces moved to remote environments, accounting staff experienced bottlenecks and decreased productivity as users grappled with Internet bandwidth, insufficient upload capacity and other hurdles that kept multiple users from accessing the platform simultaneously. On top of that, paper copies of invoices and receipts maintained in the office were out of reach when staff needed to access the files remotely.
As your nonprofit continues in remote and hybrid work arrangements and faces unknown business disruptions in the future, there are many benefits to upgrading your general ledger system or moving to a cloud-based platform, including:
- Today’s programs can store copies of invoices and receipts within transactions in real-time, allowing for a seamless transition and easy access to files remotely.
- Cloud-based general ledgers avoid the costs associated with maintaining and securing a server, running a VPN and the need to update and upgrade Internet plans to allow for remote access.
- Internal controls are strengthened through individual staff accounts that identify which user is proposing and approving entries and support more accurate recording of transactions.
- Features include the ability to assign read-only or report-only access to each user.
- Organizations can experience a smoother year-end audit process by providing access to auditors to run their own basic reports and communicate effortlessly with the finance team.
Like the online AP/AR provider options I wrote about last month, utilizing a modern general ledger system is another tool to help your nonprofit streamline processes, strengthen controls and generate more efficiencies. But like most technology systems, no one general ledger program is right for every organization, and even the best one can be underutilized.
Careful planning and preparation are essential to getting the most out of this investment. Upgrading or migrating to a new system can take a few months as you think through your needs and then run the new and old systems simultaneously.
For nonprofits looking to upgrade their general ledger system or thinking through a redesign of their chart of accounts, planning should start now to be ready for a June 30, 2021 implementation. As you think through your external and internal reporting needs and prepare to transfer data from the old to new system, Grassi’s Not-for-Profit advisors can guide you every step of the way.