Nonprofit organizations, especially tax-exempt 501(c)(3) organizations, face unique accounting needs. Unlike for-profit entities that focus on maximizing profits, nonprofits prioritize fulfilling their missions and ensuring responsible stewardship of funds.
Accounting automation helps nonprofits focus on their mission-driven goals while keeping their financials in check.
Lift Jax, an organization dedicated to eradicating generational poverty in Jacksonville, is a prime example of how automated accounting solutions can help nonprofits optimize financial tasks and ensure compliance. By partnering with Financial Solution Advisors’ (FSA’s) Client Advisory Services (CAS) team early in their journey, Lift Jax was able to streamline their accounting processes as the organization grew in revenue, tasks, staff, and complexity.
Previously, CEO David Garfunkel managed the accounting alone with informal support, but FSA’s expertise has allowed Lift Jax’s leadership to focus on serving the community rather than handling paperwork.
“Working with FSA has been a game-changer for Lift Jax. Automation solutions make tracking finances seamless, freeing up my time to focus on bigger-picture goals rather than day-to-day accounting. From weekly tasks to quarterly reporting, the CAS team at FSA ensures that we’re always on top of our finances. Thanks to our setup with Financial Solution Advisors, I can stay connected without needing to be deeply involved in the day-to-day accounting—a much better use of my time.”
– David Garfunkel, President & CEO, Lift Jax
How accounting automation benefits nonprofits
Nonprofits have distinct financial reporting needs in order to comply with tax-exempt status requirements and grant requirements. These often include restricted and non-restricted fund tracking, transparency, and donor reporting. Real-time access to financial data makes it easy to generate transparent, up-to-date reports for grant applications, donors, board members, and auditors.
For organizations like Lift Jax, automation enables the tracking of restricted and unrestricted donations, ensuring that each dollar is used according to donor intentions. “The system we’ve set up with Financial Solution Advisors has been invaluable for managing restricted or unrestricted donor contributions and tracking them by project. Every week, I can easily see exactly how much of a donor’s gift has been allocated and what remains. This transparency is essential for our brand and organizational health, showing our donors that we are responsibly stewarding their contributions,” David says.
Cloud-based systems also provide nonprofit leaders with anytime, anywhere access to financial information, allowing them to respond quickly to financial tasks, even while on the go. David says: “Whether I’m sitting on the couch at night or even on vacation halfway across the world, I can quickly check and approve something in BILL. It only takes a moment, but that moment keeps things moving forward.”
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Common accounting tasks for automation
Many repetitive and time-consuming accounting tasks can be automated, simplifying workflows and minimizing the potential for errors. Common tasks ideal for automation include:
- Automated invoicing and bill payments reduce manual data entry, ensuring timely payments and receipt tracking
- Automated bank reconciliation ensures that bank accounts are accurate, saving hours of manual effort
- Automation tools streamline the tracking of employee expenses, providing real-time updates and facilitating accurate expense reporting
- Automated payroll applications handle payments, tax filing, and employee tracking
Popular accounting automation tools for nonprofits
Nonprofits benefit from cloud-based accounting tools that support transparency and real-time financial management. Lift Jax uses QuickBooks Online and BILL, which David describes as “stable and user-friendly.” Together, these applications automate 90% of the organization’s accounting activities, streamlining processes for a seamless experience made possible by the well-integrated system and procedures.
- QuickBooks Online (QBO): Known for its accessibility and user-friendly interface, QBO integrates with other platforms, offering real-time financial tracking
- BILL: Lift Jax uses this tool for automated bill payments, allowing quick access to financial records, even when executives are traveling
Other popular tools used by nonprofits include:
- Xero offers a dashboard for real-time budget tracking and financial reporting, with specialized features for restricted and unrestricted fund management
- Gusto’s payroll tool integrates seamlessly with accounting software, automating payroll processing and tax filings while supporting nonprofit payroll compliance
Ready to streamline your nonprofit’s accounting?
For nonprofits looking to digitize their accounting, Financial Solution Advisors is here to help. Our CAS team has a deep understanding of nonprofit needs and can tailor accounting automation tools to keep your organization compliant, transparent, and efficient.
Let’s work together to simplify your financial processes so you can dedicate more time to making a difference in your community.