5 Questions to Ask Your Fund Accounting Vendor

When your nonprofit is looking to change its financial system, it would be nice to have a crystal ball. You’d know how your organization will grow in the next three years. You’d see that the software tracks restricted funds the way you need it to. And you would feel confident that you made the best choice for your nonprofit organization.

Unfortunately, you don’t have a crystal ball. But you do have good critical thinking skills, and by getting answers to a few specific questions from your current or potential fund accounting vendor, you can better understand if their system will help your organization grow—or hold you back.

Ask your fund accounting vendor these questions to help you get a full picture of their capabilities and whether they meet the needs of your organization, both now and in the future.

How does your system manage restricted funds?

A true fund accounting system simplifies restricted funds, making it easier to track and report on government grants, endowments, and specific donor requests. You have transparency that the funds were used for their intended purposes. 

• You want a system that was built specifically for the needs of tax-exempt organizations. Managing restricted funds is not a “workaround” but part of the core functionality of the fund accounting system. 
• Listen for an understanding of grant compliance and stewardship needs in their discussion of restricted funds.
• Bonus question: what percentage of the organizations you work with are tax-exempt? You want your fund accounting vendor to understand the needs of your organization. Verify that the system was built for organizations like you, versus getting a system built for commercial accounting and being told it will work for you, too.

Can you walk me through the process for building a report and a dashboard?

From built-in reports to get answers quickly to in-depth queries to help you forecast, intuitive data visualization is a key part of a robust fund accounting system.

• See that you can get information quickly and set up reports that give you information you can use. Verify that the process is intuitive.
• You’ll also want to make sure the system has a library of built-in reports as well as ways to personalize your reports to fit your needs
• Bonus question: How does view-only access work for your system? View-only access is a time-saver for both your auditors as well as non-financial team members who need access to information regularly.

How does your system incorporate automation and integrations?

Your fund accounting system should not be static—it should incorporate new technology and functionality that is meaningful to you and saves time for your staff.

• Look for a strong partner network to create a system that meets your needs and includes organizations with a track record of working with nonprofits.
• If fundraising is your major source of revenue, see how your financial system will integrate with fundraising to help you remove manual processes. Understand if the vendor has a fundraising solution that integrates seamlessly, or if there are steps to integrate with the fundraising solution you are currently using.
• Listen for mention of treasury and expense management tools such as bank feeds, credit card feeds, and purchase cards that streamline the accounts payable and reconciliation processes.
• Understand their integration process, including what support your IT team needs to provide and the timelines for getting that done. If the system offers APIs, ask about options for low- or no-code integrations to make it easier to tailor the system for your specific processes.

What does implementation look like? 

You want to know that they have a tested process for implementing an organization like yours, and that you’ll be up and running within a reasonable timeframe.

• Cost: Understand if the implementation is a fixed cost that covers the entire implementation or if there will be add-on costs to meet your specific reporting requirements or integration needs. Relying heavily on custom report development or proprietary inegration functionality can quickly escalate implementation fees, or worse, leave you without your desired outputs.
• Timeline: Your vendor should be able to give you an estimated timeline based on the size and complexity of your fund accounting system. Find out what happens if the implementation runs longer than expected.
• Who is involved: Find out if you will have a dedicated team and point person to help you with the process or if it will be a rotating group of support.
• Communication: Depending on your preferences, you may want a standing meeting with your implementation lead, or you may want to initiate updates. Either way, find out what their standard communication process is for implementation.

What training and support resources are available?

On-going training and support enable you and your team to take full advantage of the functionality of the system and help you troubleshoot if there is an issue.

• Find out if they have continued training and on-demand courses. If they do, make sure you learn not only what their training catalog includes, but also who has access to it. It’s also helpful to know how often the courses are updated.
• You’ll want to make sure you receive the support you need through chat and email. Make sure you are clear about when support is available so that when you are on an audit or grant application deadline you have the coverage you need. 
• Verify that you will have an account team who knows and understands your organization. Also get a feel for standard communication with this account team, such as standing check-in meetings, or if you will need to initiate updates.
• Look for an active community for questions to peers. You’ll want to see if they have a way for you to interact with users from other organizations. This is a great way to learn best practices and see how other nonprofits are using the fund accounting system.

Feel Confident in Your Decision

Don’t be afraid to ask the questions your vendor would prefer you didn’t ask. A good organization will be ready for those questions and be willing to give you the details, even if it’s not exactly what you want to hear. You want a vendor that is honest and wants your organization to succeed.

If you are looking for a new fund accounting system that will help you grow, be prepared for those vendor conversations by understanding the process. Our fund accounting buyers guide will show you the best practices for knowing your organizational priorities and evaluating different software.