List of Accounting Software for Nonprofits - Ranked

The fact that nonprofits rise and fall on their reputations makes accountability, transparency, and efficiency in financial management and reporting highly necessary. 

Most donors and contributors demand that you use their funds specifically as intended, which means nonprofit financial managers must ensure their processes and programs align with their mission. 

Since traditional accounting systems are not well equipped to meet these unique challenges, you require modern nonprofit accounting software for nonprofits to ensure high-level accountability, efficiency, transparency, and strategic decision-making. 

In today's guide, we’ll explore the best accounting software for nonprofits, including a solution that can integrate with your accounting system to streamline how you manage your finances. 

Let's get started.

TL;DR - Accounting Software For Nonprofits

Here's a quick list of the top nonprofit accounting software we'll discuss further later in the article:

1. Sage Intacct
2. Xero
3. QuickBooks 
4. NetSuite
5. FreshBooks
6. Blackbaud Financial Edge
7. Aplos

We understand that choosing the right software isn't a walk in the park. Also, these solutions usually lack advanced, high-level budgeting, forecasting, and reporting capabilities. 

That's why you need more than simply accounting software. You would be better off using full-fledged nonprofit financial management software. 

With Martus, your all-in-one cloud-based financial management software for nonprofits, you can enjoy advanced functionality that simplifies your financial management processes without overhauling your entire accounting infrastructure. 

Schedule a demo to see Martus in action today!

Why Nonprofits Need Specialized Accounting Solutions

Nonprofits require specialized accounting software for several reasons:

1. Traditional Tools Fall Short: While they are ideal for smaller organizations, traditional nonprofit accounting systems like spreadsheets fall short when it comes to complex financials. They lack proper audit trails, user access, and built-in controls, making them risky and inefficient for managing multi-program budgets and restricted funds. 
2. Nonprofits Have Unique Needs: Not-for-profit organizations have unique needs that include grant management, fund accounting, donor and donation management, multi-budget tracking, and special tax compliance requirements. Regular tools and free accounting software for nonprofits usually lack these in-depth capabilities. 
3. The Huge Cost of Using the Wrong Software: Many organizations start with basic or free accounting software for nonprofits, which is often limited in functionality. As such, they struggle with manual processes, limited financial visibility, compliance headaches, error-prone spreadsheets, and difficulty managing donor relationships. 
4. Unique Regulations and Standards: Nonprofits must adhere to strict accounting regulations and standards, such as FAS 116 and FAS 117. For-profit accounting systems aren't designed for these standards, at least not without significant workarounds. 

To resolve these challenges, complex organizations must look beyond regular tools or free nonprofit accounting software and instead opt for modern solutions with advanced capabilities. 

Key Features to Look For in Nonprofit Accounting Software

You'll want the accounting software you choose to have the following features that are central to nonprofit financial accounting:

• Fund Accounting: The software should have fund accounting capabilities to help you track incomes and expenses tied to specific funds. You must accurately allocate and report on restricted funds, such as grants. 
• Donation Management: The software should help you manage and report donations, tracking them seamlessly across different payment systems. 
• Security Compliance: You need to protect sensitive internal and donor financial information. Ensure the tool has robust security measures such as data encryption, audit trails, and access controls. 
• Reporting and Analytics: The right software should have a customized report maker, grant reporting capabilities, and the ability to prepare board-ready financial statements. 
• Budget Management: Use software with budget functions such as multi-year budgeting, program-based budgets, budget forecasting, and budget vs. actual reporting. 
• Compliance Support: Accounting software for nonprofits should make it easy to comply with government and industry standards. Check for audit trails, SOC 2 compliance, IRS Form 990 preparation, and FASB compliance. 
• Automation Tools: Automation helps you handle routine tasks like recording transactions and generating financial reports. Your accounting software should have this function to reduce human errors and save time and money. 
• Systemic Integrations and Connectivity: Look for software that can integrate or connect with your current systems to enhance overall efficiency and data flow. It should connect with nonprofit bookkeeping software, payroll systems, bank feeds, payment processors, and online fundraising. Integration with overall financial management software like Martus is a plus. 

How to Choose the Best Accounting Software for Nonprofits 

Knowing the features to look for isn't enough on its own. These tips will help you choose the best software:

• Consider Your Specific Nonprofit Needs: Evaluate your organization's size, volume of operations, programs, and revenue sources. Look for software that prioritizes aspects such as nonprofit reporting, grant tracking, donor management, and complementary integrations. 

• Consider Affordability: Free accounting software for nonprofits can be ideal because it won't cost you a thing. However, it usually comes with limited features. Paid software is better but should have friendly subscription fees, setup and implementation costs, and ongoing support. 

• Consider Ease of Use: Check that the software has an intuitive interface and is easy to learn and use, even for those with little experience in accounting. 

• Consider Customizability: Ensure the software is tailored to your type of nonprofit or even customizable further to your organization's specific needs. 

• Research, Compare, Shortlist, and Test: Check the internet for different software and compare them based on pricing, features, and user reviews. Shortlist the most favorable ones. Use demos and free trials to test the shortlisted candidates before committing. 

List of Best Accounting Software for Nonprofits 

In this section, we'll discuss the best cloud-based nonprofit accounting software. 

Before we get to it, it's worth noting that while these solutions are ideal for nonprofit accounting, you also require cloud-based nonprofit financial management software for advanced functionalities. 

For effective overall financial management, you'll need advanced budgeting, forecasting, and reporting capabilities. 

You'll also need a holistic financial management tool to help you account for funds and provide strategic insights to improve your mission-driven approach. 

Martus stands out as an easy-to-use cloud-based financial management software designed for nonprofits, offering solutions such as:

• Advanced Financial Accuracy, Efficiency, and Transparency: Martus connects with over 20 ERPs and accounting systems to provide a centralized tool that prioritizes team collaboration. With better collaboration, you enjoy the financial transparency, accuracy, efficiency, and clarity that are critical for nonprofits. 
• Real-Time Budget vs. Actuals Visibility: Connecting with your accounting software helps you see your budget vs. actuals in real-time on the Martus dashboard. You can then adjust your operations or financials as needed. 
• Synced Accounting Dimensions: Martus syncs your accounting dimensions, ensuring accuracy and consistency across all your financial data and reports. 
• Seamless Connectivity with Accounting Software: While Martus isn't a standalone accounting tool, it integrates with existing accounting software to complement capabilities. It provides advanced budgeting, forecasting, reporting, and cash flow management functions.

Book a demo today to learn how our tool can empower your team and transform your financial management. 

With that cleared, let's now discuss the top nonprofit accounting systems. 

1. Sage Intacct

Sage Intacct’s list of accounting functions include cash flow management, project costing, financial reporting, accounts receivable and payable, and collaboration tools. 

You can even automate various accounting tasks to improve efficiency. 

Sage Intacct is ideal for global nonprofits that need to consolidate the financials of different entities in one place, work with multiple currencies, and comply with various international tax codes. 

2. Xero

With Xero, you can generate reports, receive funds, and link your bank account for bulk reconciliation. 

The tool has highly customizable and in-depth reporting capabilities, including real-time reporting. You can customize reports using the drag-and-drop user interface. You can also add your own scenario analyses to compare with the actual reports. 

Xero also lets you track your nonprofit budget categories to ensure you allocate funds to the right programs based on donors’ wishes. 

3. QuickBooks 

If you are a mid-sized nonprofit mainly looking to optimize cash flow management, QuickBooks is the accounting software for you. 

You can use the Cash Flow Dashboard in the QuickBooks Online Advanced Plan to manage each program’s cash flow. 

The software also has reporting tools that help you structure an expenditure roadmap to ensure you don't exceed your cash flow. 

4. NetSuite

An extensive suite of customizable modules, NetSuite features an accounting solution that helps with cash management, automation, reporting and analytics, and integration capabilities. 

The software is ideal for large nonprofits looking for a highly tailored accounting solution with a customizable interface, nonprofit operations management, and reporting plans. 

5. FreshBooks

FreshBooks stands out because of its capabilities for tracking expenses and restricted funding. The software allows you to categorize expenditure within it and even connect your bank account to generate spending reports. 

You can also use FreshBooks to set up recurring donations and receive funds via credit card and bank transfers. 

6. Blackbaud Financial Edge

Blackbaud is ideal for large organizations with complex needs. Besides being a robust fund accounting software for nonprofits, Blackbaud also offers budget tracking and seamless integrations. 

The software is your best option if you are looking for enterprise-level financial management, including automated budget and report creation, audit trails, and automated bank and credit card reconciliation. 

7. Aplos

Aplos is an extensive nonprofit fund accounting software that can help you retain donors through tailored donor management. 

The tool lets you create donor profiles, communicate with donors, and keep records of your relationship with them. It also enables you to personalize how you engage and retain donors using targeted outreach solutions. 

You can enjoy features like donation tracking, financial reports, ***fund-based budgeting, project-specific reporting, pledge tracking, and recurring transactions. 

Quick Note: The features you can access with each of these tools may differ across different pricing plans. Advanced or enterprise plans usually offer more features but are costlier than lower plans. 

Frequently Asked Questions (FAQs) 

Do you have questions about nonprofit accounting software? We've got answers. Let's examine a few questions we receive from nonprofit personnel. 

Can Nonprofit Accounting Software Handle Donor Management?

Nonprofit accounting software can handle donor management, including tracking donations, communicating with donors, managing fundraising campaigns, and managing donor relationships. 

Is Cloud-Based Nonprofit Accounting Software Secure?

Most Cloud-based nonprofit accounting software applications are highly secure because they have robust security features. 

Such features may include role-based user access controls, regular security updates, data encryption, and regular backups. 

How Does Fund Accounting Work in Nonprofit Accounting Software?

Fund accounting function in nonprofit accounting software allows organizations to separately track, allocate, manage, and report funds with specific donor restrictions or designations. 

You can track specific revenue sources and expenses, such as restricted donations or specific projects. 

Conclusion

Choosing and setting up reliable accounting software for nonprofits can be challenging. This guide provides a good starting point. 

The most important thing is to consider your organization's needs so you can list all the must-have and desirable features before you start evaluating different options. 

If you need much more than just nonprofit accounting, we can help in different ways:

• Martus: At Martus, we offer an innovative and transformative cloud-based financial management software for nonprofits that promotes teamwork, accuracy, efficiency, and transparency. 

• Accounting Software Integrations: Martus connects with your existing accounting software to help you with advanced nonprofit budgeting as well as financial forecasting and reporting. Our software connects with all the above accounting systems, so you do not need to overhaul your infrastructure if you choose or already use these options. 

• Martus Client Accounting Services: As a nonprofit, you can also enjoy our Client Accounting Services (CAS), which allows you to get unparalleled outsourced accounting from one of our accounting firm partners. You can get help with budgeting, forecasting, and reporting, saving time and money compared to hiring an in-house team. 

Request a personalized Martus demo today to see how our software can transform how you manage your finances.