Think about this scene:
[FADE IN ON A BOARD MEETING]
DEVELOPMENT DIRECTOR: As of June 30, we’ve raised $9.2 million.
FINANCE DIRECTOR: Fiscal year-end numbers haven’t been totally reviewed but, however acknowledged income from fundraising might be near $7 million
DEVELOPMENT DIRECTOR: What the…?!?
EXECUTIVE DIRECTOR: Ugh.
[Executive Director throws head in hands. FADE OUT.]
Administrators of Growth and Administrators of Finance usually discover themselves working in a love/hate relationship. Not with one another, sometimes, however relatively with the important thing metrics they’re every chargeable for.
Growth and Finance each love when fundraising reviews and monetary statements present will increase over final 12 months, over targets, and over budgets. Equally, neither enjoys reporting that revenues are down. However even when fundraising is routinely exceeding targets and the items can’t be processed—nor the donors thanked—quick sufficient, Growth and Finance each hate it when their numbers don’t match.
The Government Director additionally hates it when the numbers don’t match, as a result of in the end, the buck stops with them.
Change the Scene with a Linked Fundraising and Fund Accounting System
No matter which crew you’re on (and I’ve been on each), you need to love your numbers whether or not they’re up or down, understanding which you could confidently get them to reconcile with these of the opposite crew.
And neither crew desires to spend numerous, pointless hours looking for reconciling gadgets, or manipulating monetary knowledge generated by the fundraising system in order that it may be pushed into the finance system with out exceptions.
You possibly can change the situation—together with the dramatic little scene above—by successfully integrating knowledge out of your fundraising CRM and your accounting system. Incorporating expertise options that act as bridges between your programs can be certain that no one on both crew is required to control transactions, add or delete rows or columns, or convert recordsdata to a special format.
So, let’s have a look at the highest seven causes to combine your fundraising CRM together with your normal ledger:
- Decreasing Errors
- Decreasing Effort
- Sustaining Correct Management Over Knowledge
- Decreasing Muddle
- Simpler Ongoing Reconciliation
- Widespread Understanding of ‘The Numbers’
- Selling Collaboration Throughout Capabilities and Groups
1. Decreasing Errors
When programs are built-in, you solely must enter knowledge one time and in a single place, whether or not manually keying or by means of an import. It follows then, that if transactions are solely entered as soon as, it cuts the chance for errors in half. If transactions are entered precisely the primary time into an built-in system, there ought to be no concern about accuracy when they’re posted, as a result of no additional human hand will contact them.
Even when your fundraising CRM generates a file to be imported into the accounting system, that output sometimes should be manually manipulated by one crew or each to make sure that it accommodates the right columns, headers, and summarization. Plus, the fundraising output file usually should be transformed to a different format earlier than it may be introduced into the accounting system. All of this presents the potential for errors.
Lastly, integration can implement some accounting inner controls that can additional cut back the chance of errors. For instance, an built-in posting course of can mark transactions as ‘posted’ within the fundraising CRM to allow them to’t be inadvertently posted once more. This locks a posted present transaction in order that it can’t be edited with out producing adjusted journal entries.
2. Decreasing Effort
Decreasing effort means lowering the time, power, and stress concerned in getting fundraising monetary knowledge into the overall ledger. There are a number of ways in which integrating your programs can cut back effort general:
- Coming into knowledge (manually or by means of an import) into just one system as an alternative of into two programs reduces the general quantity of information entry, saving time.
- Not having to control output recordsdata, manually summarize transactions, or convert recordsdata to a different format can even cut back the time spent on the posting course of and can make posting transactions from the fundraising CRM extra environment friendly general.
- When there are few or no errors, crew members must spend little or no time on detective work, and the ensuing corrective motion. And your crew can save much more time by not having to research and remediate hard-to-identify gadgets that hinder reconciliation.
3. Sustaining Correct Management Over Knowledge
One much less apparent motive to combine programs is to make sure that every crew continues to take care of management over their very own knowledge—the info essential to run their division of the group.
When programs are built-in, every crew will be assured that they don’t must be over-involved within the different crew’s work, or that the opposite crew will must be overly concerned in theirs.
Growth stays in control of fundraising recording and reporting, whereas Finance continues to supervise accounting recording and reporting. However, with inner controls in place, everyone seems to be assured that programs can simply align with one another.
4. Decreasing Muddle
Decreasing litter goes to the idea of the built-in fundraising CRM serving as a real subsidiary ledger to the overall ledger—the identical manner that Accounts Payable or Payroll is structured. In that case, most if not all fundraising transactional particulars stay within the fundraising system. From there, solely abstract transactions are posted from the CRM to the overall ledger in order that the latter doesn’t change into unnecessarily cluttered.
The caveat on this situation is that it’s crucial to make sure that the element within the fundraising CRM at all times agrees with totals within the normal ledger. At any time, a fundraising system report of transaction element and totals by account or fund for a specific date (or date vary) ought to at all times be capable of tie to the corresponding account totals or balances within the normal ledger for a similar interval.
5. Simpler Ongoing Reconciliation
All the pieces mentioned thus far informs simpler ongoing reconciliation between programs. As a regular rule-of-thumb, there ought to be a three-way-match between the fundraising system present or income entry, the posting to the overall ledger, and the deposit to the financial institution.
Built-in programs can guarantee error-free and low-effort posting from the CRM to the overall ledger corresponding to every financial institution deposit, whether or not that happens day by day, a number of occasions every week, and even a number of occasions every day. If each CRM present batch can hyperlink again to what’s posted to the overall ledger and to what’s deposited within the financial institution for that batch, end-of-period reconciliations ought to be a snap.
Even for non-depositable income—assume pledges and gifts-in-kind—built-in programs make it simple to submit and reconcile day by day, or as usually as is required.
6. Widespread Understanding of ‘the Numbers’
Within the dramatic scene in the beginning of this text, there was clearly no widespread understanding of the numbers between Growth and Finance. Built-in programs drive that widespread understanding as a result of they help and encourage ongoing reconciliation—and customary understanding when numbers don’t correspond.
In that situation, the explanation that the numbers have been off was as a result of a number of the bigger marketing campaign pledges have been conditional, and subsequently not instantly recognizable as income. As well as, low-dollar one-time pledges have been solely recorded as income after they have been paid, not pledged.
An built-in posting course of and routine reconciliation would haven’t solely recognized this stuff on each side, but additionally would have prompted correct inner communication to make sure that each groups reported persistently. Flexibility, effectivity, and accuracy are all key supporters of efficient reconciliation, and inner communication is the pathway to make sure these three important parts are prime of thoughts.
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7. Selling Collaboration Throughout Capabilities and Group
A few of these prime causes for integrating programs are extra tactical and others extra strategic—or, maybe, some quantitative and a few qualitative. Long run, the qualitative can’t be ignored.
On the floor, integration resolves a tactical difficulty: precisely and effectively getting income transactional knowledge from the supply system into the group’s monetary system of report. The end result of profitable integration is extra time, much less stress, and extra confidence and belief, each within the course of and within the numbers.
It goes again to that love/hate relationship. When you may persistently belief course of and love the numbers, stronger cross-functional collaboration will naturally evolve. Group members might be glad to cooperate within the uncommon situations the place one thing must be investigated on one facet or the opposite. Every have a tendency to make sure knowledge are aligned and coordinated when speaking with government or exterior stakeholders.
Built-in Techniques and Higher Transparency
Let’s see how that situation would play out with an built-in fundraising CRM and normal ledger.
[FADE IN ON A BOARD MEETING]
DEVELOPMENT DIRECTOR: As you may see, as of June 30, we’ve raised $6.9 million in money and short-term pledges and one other $2 million in conditional and long-term pledges. We’ve additionally recorded about $300,000 in smaller telemarketing pledges that, traditionally, we don’t rely as present income till they’re paid.
FINANCE DIRECTOR: That’s proper. As you may see on the June 30 earnings assertion, fundraising income for the 12 months is only a hair over $6.9 million.
EXECUTIVE DIRECTOR: Thanks. Any questions from the Board?
[Executive Director smiles as a board member begins to make an innocuous statement – FADE OUT.]
Integrating your fundraising CRM and normal ledger with purpose-built software program will be certain that funds recorded as raised correctly correspond with the cash recorded as income from fundraising on monetary statements—or moderately clarify after they don’t.
However alongside the best way, you’ll save time, be extra correct, take away litter, and construct belief and confidence among the many groups and their management. And, a totally aligned pair of built-in programs will drive improved transparency, insights, operations, and, in the end, accountability to each leaders and donors for delivering your mission.
Able to see an built-in CRM and fund accounting system in motion? Take a look at our on-demand product tour with Blackbaud Raiser’s Edge NXT and Blackbaud Monetary Edge NXT.
