Why is the Xero accounting system ideal for not-for-profit organisations?

The last thing on your mind when you join a not-for-profit organisation is – what accounting system should we use? You’re passionate about a cause, ready to raise awareness and funding. But the reality is not-for-profit accounting can be complicated.

Challenges include:

  • Financial and Board reporting obligations
  • Multiple sources of funding
  • Donations directed to specific areas
  • Annual audits
  • A layered approval process that’s tricky when personnel are spread far and wide.

For those operating the not-for-profit organisation, accounting is rarely a forte, and committing to expensive software can initially feel like the only option.

The solution is simple. The Xero Accounting System is ideal for not-for-profits.

It is not only easy to use, but the Xero Accounting System can customise reports and assist with audits – and it’s all online. Xero operates smoothly and offers broad functionality at an affordable price.

It’s important to choose accounting software that aligns with your organisation’s needs. Xero is suitable for SME accounting as well. It manages payroll, leave applications, one-click invoices and all reporting needs for business. Xero keeps tax compliance and audit preparation simple, and that’s why it’s ideal for your not-for-profit. Here’s how.

Woman typing in the laptop while using the calculator

Paperless annual audits

You may already know the pain of conducting an audit. It’s an unavoidable obligation for many not-for-profits.

Once upon a time, the tax compliance and audit preparations for a not-for-profit were a huge strain on the organisation and its people. They involve auditors coming onsite to assess all the financial paperwork and processes of the organisation. Hard copy paper trails often lead to errors, and this resulted in administration changes that took precious time away from the not-for-profit cause.

Xero has changed this process, forever.

The Xero Accounting System records and reports financial and taxation compliance requirements online.

Xero effortlessly solves the multiple time-consuming compliance issues that weigh on people operating a not-for-profit. It can accept payments and donations online. It can categorise funding from different sources. It can track all financial activity online and customise reports for auditors, boards or other stakeholders. Xero also stores soft copies of receipts, making the entire audit paperless. Transparency is the key to smooth operations in a not-for-profit organisation and Xero can achieve this with ease.

Couple happily using the laptop for online transaction

Fast online approvals

Systematic authorisation for all expenses in a not-for-profit organisation is good governance. A handful of delegates are often responsible for approving expenses and if they are located in different offices, the hard copy paper approval process can be slow and challenging. Purchase orders, payments of invoices, campaign funds and others can require multiple signatures and piles of paperwork.

The Xero Accounting System solves this by syncing with an approval app like Approval Max. Once it’s synced, Xero delegates the approval of expenses online.

Approvals and financial records are all within the same cloud-based system, so delegates can review budgets and campaign activity before they approve the expenditure. Most importantly, the soft copy paper trail is instantly audit-ready.

Woman talking to the phone inside the office

Track funding sources

All not-for-profit organisations have multiple sources of funding. These include donations from individuals, groups or businesses, income from sales of products, grants and fundraising from specific campaigns.

A not-for-profit organisation has obligations to provide different reports for different stakeholders. This includes reports for boards, audits, grant applications and other funding partners. It can quickly become an administrative nightmare.

Thankfully, the Xero Accounting System creates customised reporting to satisfy all these different obligations. Once it’s set up, the reporting opportunities from Xero are endless.

Man typing on his laptop

Keep software costs down

Every penny is precious in a not-for-profit organisation.

While you may feel that not-for-profit accounting is a full-time job, it doesn’t mean you have to pay for expensive software to manage it. Unity Accounting recently reduced a not-for-profit client’s accounting software fees from $1,000 to $90 per month, just by switching to Xero.

The base-level cost of Xero Accounting System is approximately $30 a month. The front end is simple and easy to use, but the functionality of the platform is comprehensive. Additional costs will arise for optional add ons in Xero and external apps that sync with Xero, like Approval Max for expense approvals and Dext that uploads photos of receipts.

Xero keeps cashflow simple

Decision making is easy when you have up-to-date visibility of an organisation’s cashflow.

Xero Accounting System provides instant cashflow reporting in graphs and charts, detailing the progress of a fundraising event or campaign. Monthly donation trends can also be monitored at a glance.

Unity Accounting is committed to keep accounting simple for clients, too. We work with many types of accounting software and we tailor our services to your organisation’s needs.

Contact us to talk about how Xero can help streamline your business operations. We’d love to help.