“I am the treasurer of a medium sized charity and in need of accounting software that allows for split reporting. This is essential as we have income coming in from multiple sources, including restricted grants. Additionally, as a charity trustee, I am constantly on the move and need to have access to the accounts as and when I need it. What benefit does cloud accounting pose for me over traditional accounting software?”
Having effective financial controls in place is often overlooked by many charities. Consequently, charities are using outdated pieces of software that are not only time consuming, but add no real value to their organisation. In the last five years, cloud software has taken advantage of this and transformed the accounting landscape, not only for business owners, but also for charity and not for-profit organisations. With many organisations uncertain about the benefits of cloud software, here we look at the advantages and why more and more charities are converting.
For charities, income can come from a range of streams including public donations, crowdfunding and grants. As a result, having features to accommodate this is extremely helpful. With cloud accounting software, such as Xero, you can benefit from ‘Split Reporting’, which enables you to manage your revenue in two ways: through sales codes or through tracking. A sales code gives you the advantage of allocating your income and expenses to a set code, therefore allowing you to see which stream yields the most and pull detailed reports. Similarly, the ‘Tracking’ feature gives you the opportunity to categorise individual supporters by how much money they donate. This feature allows for easy reporting and also for trustees to follow and adapt to trends. Furthermore, the tracking codes work perfectly for projects or restricted income, such as grants.
Split Reporting alone is one reason why many charity and not-for-profit organisation have already converted to the cloud. However, there are other benefits:
- Multi-Currency Solutions
Donations can be received from all over the world, and for charities that operate on an international or global level, having software which takes this into considering makes reporting much more valid and accurate. On Xero, the multi reporting facet allows for automatic currency conversions and for gains and losses to be calculated in real time. As a result not-for-profits can benefit from flexible and thorough reports.
- Data protection
Cyber criminals often target sensitive and compassionate groups, such as charity and not-for-profit organisations. Therefore, having effective data protection software inbuilt in the cloud makes it an ideal bookkeeping program, keeping your finances safe.
- Reporting Templates
With cloud software such as Xero, you can benefit from prefilled reports to help you better categorise sections of your accounts. For charities, SORP templates are readily available for you to edit or add codes, making it specific to your charity’s objectives and requirements.
- Flexibility and Access
With charity trustees very much always on the move, cloud accounting allows for easy access to charity accounts, with only an internet connection required, trustees can access their information on any device and from anywhere. What is more, cloud software gives you the opportunity to have other team members or trustees gain access to the accounts at different levels of permission.
If you are a charity looking to find out further information on how cloud software can benefit you, please feel free to contact me on email@example.com.