Having effective financial controls in place is often overlooked by many charities. Consequently, charities are using outdated pieces of software that are not only time consuming, but add no real value to their organisation. In the last five years, cloud software has taken advantage of this and transformed the accounting landscape, not only for business owners, but also for charity and not for-profit organisations. With many organisations uncertain about the benefits of cloud software, here we look at the advantages and why more and more charities are converting.
Split Reporting
For charities, income can come from a range of streams including public donations, crowdfunding and grants. As a result, having features to accommodate this is extremely helpful. With cloud accounting software, such as Xero, you can benefit from ‘Split Reporting’, which enables you to manage your revenue in two ways: through sales codes or through tracking. A sales code gives you the advantage of allocating your income and expenses to a set code, therefore allowing you to see which stream yields the most and pull detailed reports. Similarly, the ‘Tracking’ feature gives you the opportunity to categorise individual supporters by how much money they donate. This feature allows for easy reporting and also for trustees to follow and adapt to trends. Furthermore, the tracking codes work perfectly for projects or restricted income, such as grants.
Split Reporting alone is one reason why many charity and not-for-profit organisation have already converted to the cloud. However, there are other benefits:
- Multi-Currency Solutions
- Data protection
- Reporting Templates
With cloud software such as Xero, you can benefit from prefilled reports to help you better categorise sections of your accounts. For charities, SORP templates are readily available for you to edit or add codes, making it specific to your charity’s objectives and requirements. - Flexibility and Access
With charity trustees very much always on the move, cloud accounting allows for easy access to charity accounts, with only an internet connection required, trustees can access their information on any device and from anywhere. What is more, cloud software gives you the opportunity to have other team members or trustees gain access to the accounts at different levels of permission.