Nonprofits Gain When They Make Sure Their Software Is Up to Date
By John Cohen
One of the most common mistakes nonprofits (and others) make is to assume that once a software package is successfully installed, the organization is all set and need give no further serious attention to the matter.
Too many nonprofit organizations go five and even ten years without giving serious thought to updating its software (and hardware) configuration to align with current organizational needs.
If it aint broke, dont fix it seems to be the idea, abetted by the notion that any money not spent on overhead is available to further the organizations mission directly. This is penny-wise/pound foolish.
At almost every level of complexity, virtually every software package should be professionally reviewed annually, or at most, every two years. Even QuickBooks, which now integrates with many other programs, should be checked.
Calling in your software consultant for a one- or two-day review is inexpensive and can yield many benefits. The consultant can often fine tune the programs to run more efficiently, teach your users how to operate them better, and propose solutions to problems you are having.
To stay on top of its software, every nonprofit should ask itself the following five questions:
John Cohen is Managing Director of NPA Consultants, nonprofit process improvement specialists. Contact him at John.Cohen@NPaccountants.org or call 617 694 4600.
- Has the organization kept current on software updates, patches, etc.?
Not keeping current on updates is a truly dangerous practice which has put many nonprofit organizations into (expensive) hot water. Not keeping current means you continue operating with the same problems the updates and patches were intended to fix, and ultimately you will be operating with a program that is no longer supported by the company which created it.
- Is the organization using the current software modules in the manner the software was originally designed for? Has employee turnover caused the organization to lose mastery over its software?
Experience shows that the actual current use of the software often falls short of its designed use. Employee turnover over several years can lead to loss of original procedures. Their replacement with substitutes can be unnecessary, introducing time-wasting manual procedures that are incorrectly taken for granted as a legacy from past years.
- Can the organization benefit financially by upgrading the software to a newer version, adding modules or changing the hardware configuration?
Software companies are continually issuing new, more sophisticated versions of classical programs, and hardware advances, such as cloud computing. These can be a financial boon to the bottom line. New versions of software often have new features and modules which reduce time-absorbing manual tasks, and taking advantage of hardware innovations can save on replacing expensive computers and servers .
- Are the reporting and budgeting capabilities of the software under-utilized because the organization is accustomed to using Excel spreadsheets?
Many nonprofits rely on legacy Excel procedures, instead of implementing the full potential of the software already installed, because they haven't been trained or taken the time to learn the full functionality of those packages. Remember, Excel is no substitute for accounting software: it can absorb immense amounts of time and is alarmingly prone to human error.
- Has unnecessary data been purged from the system?
Organizations that have large numbers of transactions are especially subject to clogging their software with old, out of date data such as back-ordered purchase orders, discontinued vendors, etc. This can slow processing time significantly and can also present an accounting (and fraud) control risk if someone chose to use an out of date document or vendor name to defraud the company.