When you should use budget software for nonprofits

As the fiscal year end (FYE) approaches for many nonprofits, now is the perfect time to start thinking about the organization's budget for the upcoming year. Many nonprofits have a June 30 FYE, and the months leading up to it — particularly February through May — are crucial for nonprofit budget planning and preparation.

Budgeting for nonprofits can be a complex and time-consuming process, often involving multiple departments, funding sources, project codes, and program expenses. With the right tools, nonprofits can streamline their budgeting process and ensure financial stability and success in the year ahead.

The benefits of budget software for nonprofits

One key tool that can greatly simplify the budgeting process for nonprofits is budget software designed specifically for their needs. Budgeting software for nonprofits comes with a range of features and capabilities tailored to the unique requirements of nonprofit organizations, making it easier to create, manage, and revise budgets and forecasts.

Whether your nonprofit operates on a local, state, or national scale, budgeting software can provide invaluable support in these key areas:

Efficient & flexible budget creation

With budgeting software for nonprofits, creating a budget becomes a streamlined and efficient process. Nonprofits must carefully manage project budgets and forecast cash flow from unpredictable sources well into the future. FP&A software enables frequent reforecasting and detailed workforce planning, and the flexibility required to navigate uncertain or constantly changing economic conditions.

Customized reporting

Nonprofit budgeting software offers customizable reporting features that empower users to generate detailed financial reports tailored to the organization's specific needs. From budget vs. actuals reports to program-specific budget analysis, you can access the information you need to make informed decisions and demonstrate financial accountability to stakeholders.

Collaborative planning

Budgeting software solutions for nonprofits should support collaborative planning, allowing multiple stakeholders within your organization to contribute to the budgeting process. Whether it's department heads, program managers, or board members, everyone can provide input into the budgeting process, ensuring that it reflects the priorities and goals of the entire organization.

Some nonprofit budgeting software solutions claim to offer flexible collaboration options, but lack basic features like different view/edit permissions for different team members. If you have multiple budget contributors or stakeholders involved in the budgeting process, make sure the FP&A software solution you choose allows for truly flexible collaboration. 

Integration with your current accounting system

Budget software for nonprofits must integrate seamlessly with accounting systems commonly used by nonprofits. Integration with common GL and ERP software platforms like  Dynamics GP, Abila, or Elite enables automatic data synchronization, eliminating the need for manual data entry and reducing the risk of errors.

Scenario planning

Nonprofit budgeting software enables advanced scenario planning, allowing you to model different financial scenarios and assess their potential impact on your organization's budget. Whether it's changes in funding levels, program expansions, or economic uncertainties, you can plan for various possible outcomes and make informed decisions accordingly.

Case study: Drill-down budget vs. actual analysis provides actionable insights for housing nonprofit

The Housing Authority of Snohomish County (HASCO) is a nonprofit government agency that works with federal and local programs that help with rent, affordable housing, and tenant services. They have two primary sources of revenue: reimbursement they receive from HUD (the US Department of Housing and Urban Development) for the Section Eight housing vouchers they administer, and rental income from the properties they own throughout the county.

Prior to implementing Centage’s FP&A software, they used Excel for their budgeting and planning, but it ultimately proved insufficient to their needs. As more requirements were added, spreadsheets became unwieldy and increasingly difficult to manage:

“It was just too complicated to do in Excel, but once we set it up with Centage, I can go in and just adjust the rent as I go along. It’s all in one report, instead of 20 different Excel reports.” -Jenny Barker, Senior Budget Manager, HASCO

Centage integrates seamlessly with HASCO’s accounting software, Elite. Centage now operates as an extension of their GL, pulling in actuals data so the finance team can monitor and analyze budget vs. actuals on an ongoing basis.

HASCO’s finance team is now able to automatically adjust projected revenues, expenses, and the anticipated bottom line, offering transaction-level detail. Running monthly reports now takes minutes instead of hours, and the reports generated now provide a much higher level of detail.

“It’s a wonderful thing that I can go in, hit a couple of buttons, wait a few minutes and all my actuals data comes right into Centage. And I love the ability to drill down, I have access to so much more information now than I have had before to really show what’s going on… I can change one number and it carries forward throughout the budget, which saves a lot of calculation time.” -Jenny Barker, Senior Budget Manager, HASCO

More transparency, more proactive planning, less time wasted on manual processes

By leveraging the right budget software, nonprofit organizations can streamline their budgeting process, improve financial transparency, and make informed decisions about resource allocation.

If you’re a finance leader at a nonprofit, consider investing in budgeting software tailored to the unique needs of your organization. With the right tools in place, you can set your nonprofit up for financial success and ensure that you can continue to make a positive impact in your community in the years to come.

Centage offers nonprofits a robust budgeting and planning tool that allows for granular cash flow forecasting, detailed workforce planning, and flexible stakeholder collaboration. Book a demo to see if our FP&A software is a good match for your nonprofit’s budgeting challenges.