5 Ways Fund Accounting Simplifies Food Bank Reporting
When people in your community are hungry, you look for any opportunity to be more efficient so that you can spend more time getting food to those who need it. But without the right systems in place, administrative tasks like pulling grant reporting can be time-intensive and error-prone.
Your food bank needs accounting software that can help you manage a variety of funding sources while also helping you make strategic, data-driven decisions based on inventory and forecasted community demand. Here are five ways software designed for nonprofit organizations can help your food bank save time and increase transparency—so you can get back to feeding your community.
Provide clear stewardship for restricted funds.
From fundraising initiatives to grant awards, your food bank likely juggles a mix of restricted and unrestricted dollars. With a fund accounting system, you can easily track that restriction back to the donor or grant that trusted your organization with those funds. With allocated projects specific to those restrictions, you can easily show your donors and grant funders that their money aligned with their specific intent.
Improve transparency by communicating the status of your restricted fund balance. Create a version of your balance sheet that includes a column for restricted funds so your leadership can see at a glance what assets you have that are tied to a program or specific use case. Having this up-to-date balance can help your organization make better data-driven decisions.
Reduce risk with a single source of truth for all your grant funding.
Tracking one grant award outside of your accounting software is not ideal, but manageable. But if you are like most food banks, it’s not just one grant. It’s several. Or dozens. Each extra spreadsheet is not only another headache, but also an opportunity for outdated or inaccurate data to get into your system.
Use your fund accounting system to track the details of each grant, including status, amount awarded, and type of grant. Upload the grant guidelines and budget worksheets so they are at your fingertips any time you have a question. Having one place for all the information breaks down silos and avoids introducing risk through pulling data out of various systems into spreadsheets.
Budget and forecast across all programs.
Food banks have to be nimble. You might get some advanced notice about a major local employer closing, but climate events and pandemics rarely give you more than a few days warning. But running—and re-running—budget scenarios and forecasts throughout the year can keep you from feeling flat-footed during a crisis for your community.
With a fund accounting system, you can budget at the program level to see all funding sources that support each program, including grants that cross fiscal years. You can also build a rolling forecast for all expenses, grants, and programs. This allows you to check on your pacing to see if you are over- or under-spending specific grants.
Accurate forecasting and budgeting are also critical for your inventory requirements. With multi-scenario budgeting, you can see what it would look like if you had a 20% or 50% increase in demand, and then plan for those scenarios. You can establish benchmarks for when additional fundraising appeals need to go out and adjust your goals based on where you are compared to those scenarios.
Format your Chart Organizer once for specific reporting requirements.
Flexible reporting allows you to meet your compliance and transparency requirements without having to recreate reports each time you need them.
For example, if you need to file Schedule of Expenditures of Federal Awards (SEFA) Reports, you can create a report that shows those expenditures by grant. You can easily group all the accounts that fall under the emergency food assistance programs and classify the columns so you can clearly show what funds were from direct awards and what was from pass-through awards
Even outside of grant reporting requirements, you can use flexible reporting capabilities to keep your leadership up to date on key initiatives. Use your fund accounting system to run reports by specific programs or grants to provide additional transparency to your board or funding organizations.
Your internal stakeholders aren’t the only ones who will appreciate these reports. With view-only access, your auditors can also drill down into the specifics of each report, getting the information they need without taking your staff’s time.
Integrate your inventory management to avoid duplicate entry.
Modern APIs mean you don’t need to compromise. Instead of having a single system that does one aspect well but falls short for the rest of your organization, each department can select the software that works best for their specific needs. By integrating your warehouse management software with your fund accounting system, you get information in your system quickly and accurately so you can make more informed decisions.
These interfaces automatically pull purchase orders, receipts, and invoices directly into your accounting system for payment and tracking. You can also push updated valuations and inventory fluctuations into the general ledger without having to enter the data in both places. This saves your staff time and reduces the chances of miskeyed information.
See Fund Accounting in Action
If your food bank is ready for an accounting system designed for your needs, check out our webinar, Integrate and Innovate: Why Food Banks Need Fund Accounting Software. You’ll see how Blackbaud Financial Edge NXT can simplify your reporting and improve transparency, helping you plan better and earn more funding.
Fund Accounting Software that Drives Impact
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