The accounting
needs of a small, local charity and a global NGO start from the same basic
concept – effective stewardship of donor funds. Most nonprofits must break down
income and expenditures on a program-by-program basis, which means maintaining
a distinct ledger for each operating fund. For instance, a simple monthly
office rent bill for $1,000 may need to be proportionally distributed across a
half-dozen programs which operate out of that office. Further, that bill might
be paid from multiple different donors. These funds are often governed by
different rules and procedures for receiving income and allocating
expenditures, defined by major donors or the type of services provided by each
program. This can make accounting procedures between funds about as similar as balancing
the books in Boise and Brazil.
The inherently complex accounting challenges nonprofits face
require accounting systems that balance best practices with both power and
flexibility. At NetSuite.org, NetSuite’s Corporate Citizenship arm, we’re
working to increase the suitability of our market-leading cloud ERP for
nonprofit organizations. We recognized that the NetSuite platform was already a
favorite of diverse businesses operating in multiple locations under accounting
rules which varied from country to country. We also recognized that many
commercial ERP systems lacked the unique terminology, reporting criteria and
rules of this sector. These realizations led
us to the decision to apply what we knew about comprehensive, automated support
for multiple, consolidated ledgers to the needs of nonprofits.
Working with one of our SuiteCloud development partners,
NetSuite can offer a fund accounting solution which gives organizations
superior control over the balance sheet of any number of programs. With this
platform, nonprofits can allocate costs on a percentage, hourly or fixed cost
basis, with the freedom to configure different rules for each fund. The
enhanced, real-time controls make it possible for leaders to identify
shortfalls and surpluses on a fund-by-fund basis, making it easier to avoid
overspending. With each fund's balance sheet available at a glance,
organizations can quickly identify shortfalls and adjust services or reallocate
administrative costs to funds with an operating surplus and the freedom to take
on a greater share of operating expenses.
In the name of good donor stewardship, organizations must
have fund accounting capabilities which enable them to allocate expenses
according to rules which differ from program to program. Today, many
organizations struggle with transparency and year-end reporting because of the
complicated manual gyrations that are required to ensure each fund is following
the correct set of balance sheet rules. We're thrilled to have the flexibility
to adapt our scalable, proven cloud ERP solution to the advantage of our
nonprofit users, and help more organizations spend less time hunched over the
books.
At NetSuite, we believe good corporate citizenship is no
longer just about giving away a little money. It’s about putting the strengths
of the company to work to make the world a better place. For that reason, we
leverage our greatest assets, our people and our product on behalf of social
enterprises and charities around the world. Through donations of the NetSuite product,
social solutions like fund accounting and grants management and pro bono services from our employees, we are
helping our grantees more efficiently achieve their missions. To learn more
about NetSuite’s fund accounting solution, or the NetSuite.org product
donation program, please visit www.NetSuite.org.
- David Geilhufe, Program Manager, NetSuite.org