Is Your Accounting System Helping or Hurting Your Community Action Agency?
We all know that keeping a close eye on finances is crucial for your Community Action Agency (CAA). Whether you’re a board member, part of the leadership team, or deep in the finance and accounting trenches, we’re all responsible for sound fiscal management. That means you need to be actively reviewing your reports, looking at the right metrics, correctly tracking detailed program expenses, and juggling complex grant funding.
To do all of that and do it well (without feeling overworked and overwhelmed), you need an accounting system that works as hard as you do —and that’s not easy to find!
Does Your Financial Management Software Fill the Needs of Your CAA?
Here’s the reality: many CAAs are still relying on GMS Accounting and Financial Management System. This tool has been around for decades and is a familiar and trustworthy platform, but it hasn’t evolved to meet more complex needs. We recently attended a few industry conferences and learned from many CAA finance professionals that their current systems aren’t cutting it anymore.
Let’s take a look at some of the challenges you may be running into and what to look for in a better alternative so you can lighten your load, not add to it.
Key Features in Modern Financial Management Software
1. Advanced Grand and Fund Accounting (Without the Spreadsheets!)
While legacy systems like GMS provide some basic grant-tracking functionality, they often require manual workarounds to juggle multiple funding sources, each with its own set of rules.
Many finance teams end up relying on spreadsheets to fill in the gaps, increasing the risk of errors and inefficiencies. And it’s not just about grants and funds, is it? You’re also tracking volunteers, managing physical assets, keeping tabs on payroll, and logging volunteer hours. All of which are critical components of your programs that need to be accounted for. Imagine if there was a simpler way.
A cloud-based financial management system, like Sage Intacct, can offer built-in grand and fund accounting, automatically tracking everything while letting you easily allocate funds, manage indirect costs, and pull up real-time reports that show exactly how every dollar is being used. All while maximizing your resources.
See for yourself how this software is helping Community Action Partnerships see efficiency gains of up to 60% in our data sheet.
2. Real-Time Financial Reporting and Dashboards
If you’re still running static, end-of-month reports from GMS, you know it can delay or prevent proactive decision-making. By the time you send the report, the numbers are already outdated, making it harder to get a clear picture of your financials.
When looking for a new software, you should look for one that gives you instant access to financial insights. No waiting, no manual work, just clear and accurate data at your fingertips. Having that level of real-time access makes it easier to be transparent with your board, your funders, and the community you serve.
With just a few clicks, you’re able to access the information you need without manually compiling data across multiple spreadsheets. Instead, you get all of your data in one place with customizable dashboards and automated reporting. Need to pull a report on a specific grant? Easy. Want to drill down into expenses by program? You got it. With these capabilities, you’ll gain real-time visibility into every aspect of your organization’s finances.
Sage Intacct Overview Demo for CAAs (29:44)
3. Multi-Dimensional Accounting: The Key to True Transparency
Traditional accounting software operates on a single-dimension general ledger, which limits the ways you can track data. This often leads to workarounds and duplicated efforts to capture the necessary details for compliance and reporting.
Sage Intacct introduces multi-dimensional accounting, which allows you to tag transactions with multiple attributes. This could include funding source, location, program, or department, making it easier to slice and dice your financial data in meaningful ways. For example, you can instantly see how much funding was spent on a specific program, broken down by location. This multi-dimensional approach builds a foundation for true transparency, providing stakeholders with clear, detailed insights into how funds are being used, all while eliminating the need for constantly crunching data.
4. Seamless Integrations with Other Essential Tools
One of the biggest frustrations we’ve found finance teams facing while using GSM is their limited integration capabilities. Suppose you’re manually entering data between systems or needing to account for similar fields in disparate platforms (such as your payroll or human resources software). In that case, you could be wasting valuable time and also increasing the risk of errors and duplicate entries.
A modern financial management system should seamlessly integrate with the nonprofit tools you already use. Better, seamless integration allows you to:
- Reduce manual data entry. Meaning no more tedious tasks! Sync your payroll, HR, and CRM data directly into your accounting software so everything connects.
- Enhance accuracy. We all make mistakes, but better accuracy allows you to be confident in your reports. Minimize human error by automating your financial data flow across platforms.
- Improve donor and grant tracking. Get a clear picture of your revenue and ensure it’s accurately recorded and reported.
With integrated tools, your CAA can operate more efficiently, freeing up your team to focus on the important work of serving your community. Plus, when everything’s connected, you’ll have a much clearer view of your agency’s overall health and performance.
Is It Time to Explore a Better Solution for Your Community Action Agency?
At a certain stage of business or with simpler needs, GMS is a solid foundation. But, like any tool, it has its limits. As you take on increasingly complex missions and funding structures, you may need more advanced reporting, analysis, and integration capabilities.
If that sounds familiar, ask yourself whether your system is keeping up with your agency’s needs. If you feel like you’ve outgrown your current GMS software or are finding it doesn’t quite meet your needs, DWD Technology Group can help.
Contact us today to get help assessing your needs, discuss potential solutions, and guide you through a smooth transition.
About the Author: Luc Lothamer, CPA
