Managing finances in a non-profit is complex. Learn what to look for and how to choose the best system with our not-for-profit accounting software guide.
Managing finances effectively is a challenge for not-for-profit organisations. Unlike traditional businesses, they operate with multiple funding sources, strict reporting requirements, and the need for financial transparency. Without the right tools, tracking funds, ensuring compliance, and managing financial data across programs can quickly become overwhelming.
Modern accounting software helps streamline these processes by automating reporting, tracking restricted and unrestricted funds, and integrating with payroll, fundraising, and donor management systems. With real-time financial insights, organisations can reduce administrative burden and focus more on their mission.
This guide explores key financial challenges, what to look for in accounting software, and how to choose the right system to support long-term financial sustainability.
Key Accounting Challenges for Not-for-Profit Organisations
Financial management in not-for-profits comes with a unique set of challenges. Unlike commercial businesses, they must account for restricted funding, comply with strict reporting standards, and ensure transparency for donors and stakeholders. Without the right financial systems, managing these complexities can become time-consuming and prone to errors.
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Managing restricted & unrestricted funds
Not-for-profits often receive funding from multiple sources, each with different restrictions on how the money can be used. Tracking these funds separately is essential to prevent misallocation and ensure compliance with donor agreements. A robust accounting system should allow organisations to categorise funds accurately and generate clear financial reports.
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Keeping up-to-date with regulatory & compliance standards
Regulatory requirements for not-for-profits can be complex, with strict financial reporting obligations. From compliance with financial reporting frameworks to tax exemptions and audit requirements, organisations must ensure their accounting practices meet the necessary standards. Without automation, producing compliant reports can be resource-intensive and error-prone.
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Budgeting, forecasting & financial oversight
Unpredictable funding and fluctuating donation levels make long-term financial planning challenging. Not-for-profits need accurate forecasting tools to manage cash flow, plan for future projects, and make informed financial decisions. Without real-time insights, organisations risk running into financial shortfalls or misallocating resources.
What to Look for in Not-for-Profit Accounting Software
Not-for-profits have financial requirements that go beyond standard bookkeeping. Managing multiple funding sources, ensuring compliance, and maintaining transparency all require a system designed to handle these complexities. The right software should reduce manual work, improve financial accuracy, and provide real-time insights.
Here are the key features to prioritise:
- Fund accounting & grant tracking
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Tracking where funds come from — and how they’re used — is essential. Not-for-profits often manage a mix of restricted and unrestricted funds, each with specific conditions. A strong accounting system should provide clear visibility over every grant, donation, and funding source, ensuring accurate allocations and compliance with reporting obligations.
- Compliant financial reporting
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Financial oversight is only as strong as the reporting behind it. Not-for-profits need software that generates SORP-compliant reports, automates audit trails, and provides real-time insights for stakeholders. A system with built-in compliance features ensures financial reports are structured correctly — without the need for manual adjustments.
- Seamless integration
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Disconnected systems lead to inefficiencies. The right accounting software should integrate with payroll, donor management, and CRM tools, reducing the risk of data errors and ensuring a single source of financial truth. This allows finance teams to oversee all financial activity in one place, without relying on time-consuming manual imports.
- Automation & efficiency
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Financial processes shouldn’t be a burden. Automated bank reconciliations, expense tracking, and recurring transactions eliminate repetitive tasks, improve accuracy, and free up finance teams to focus on more strategic financial planning.
- Scalability
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As not-for-profits expand, financial complexity increases. Whether managing multiple locations, growing funding streams, or introducing new reporting obligations, the right software should scale without limitations. A cloud-based system provides the flexibility to adapt as the organisation grows, without the costly upgrades.
Comparing Popular Accounting Software for Nonprofits
Not-for-profits need accounting software that goes beyond standard bookkeeping. Managing fund restrictions, grant allocations, multi-source income, and compliance reporting requires a system that can handle sector-specific financial complexities. While several accounting solutions offer features for not-for-profits, the level of functionality varies significantly.
Here's a comparison of commonly used accounting software, highlighting key areas that matter most to finance teams in the not-for-profit sector:
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Feature
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Sage Intacct
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QuickBooks
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Xero
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Paxton
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Fund Accounting
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✅
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⚠️
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❌
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✅
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SORP Compliance
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✅
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❌
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❌
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✅
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Gift Aid Handling
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✅
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❌
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⚠️ Manual Workarounds
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✅
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Multi-Entity Support
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✅
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❌
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❌
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❌
|
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Payroll Integration
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✅
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⚠️
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⚠️
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❌
|
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Cloud-Based
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✅
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✅
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✅
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❌
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(Legend: ✅ - Fully supported, ⚠️ - Limited support, ❌ - Not supported)
Sage Intacct
Sage Intacct is a dedicated financial management system designed for not-for-profits that need real-time visibility, automation, and compliance tracking. It provides:
- Fund accounting to manage restricted and unrestricted funds separately.
- SORP-compliant reporting for regulatory compliance.
- Multi-entity and multi-dimensional reporting to track funding across projects, locations, and donor categories.
- Seamless integrations with payroll, fundraising, and donor management systems.
QuickBooks
QuickBooks is widely used by small not-for-profits due to its affordability and ease of use, but it has limitations for organisations with more complex financial structures.
- Basic accounting functions but lacks dedicated fund accounting.
- Limited compliance support, making regulatory reporting more manual.
- Restricted reporting capabilities, requiring workarounds to track funds and grants.
Xero
Xero offers cloud-based accounting with a user-friendly interface, but it lacks key not-for-profit financial management features.
- No built-in fund accounting, making it difficult to track donor-restricted funds.
- Manual Gift Aid tracking, which increases administrative workload.
- Limited multi-entity support, making consolidation across different programs or locations challenging.
Paxton
Paxton Charities Accounting is a UK-focused accounting system designed specifically for charities, offering compliance and fund tracking tools. However, it has some restrictions:
- Supports SORP compliance and Gift Aid management.
- Not cloud-based, meaning limited accessibility and automation.
- Less scalable, making it more suitable for smaller organisations.
Why Cloud-Based Accounting is the Future for Not-for-Profit Organisations
Finance teams in not-for-profits are under increasing pressure to manage complex funding structures, regulatory compliance, and operational costs — all while ensuring financial transparency.
Traditional accounting methods often rely on manual processes, disconnected systems, and delayed reporting, making it difficult to maintain financial accuracy. Cloud-based accounting solutions solve these challenges by offering real-time access, automation, and scalability.
Here’s where cloud-based solutions have the upper hand:
Real-time visibility
Many not-for-profits struggle with outdated financial data, making it difficult to make informed decisions. Cloud-based accounting provides instant access to financial information, allowing finance teams to track budgets, monitor spending, and generate reports without delays. This ensures that leadership teams have the insights they need to allocate resources efficiently.
GDPR compliance & data security
Handling sensitive financial data comes with significant security and compliance risks. Cloud-based systems provide automated backups, encrypted storage, and strict access controls, ensuring that financial records remain protected against cyber threats and data loss. Additionally, cloud providers handle updates automatically, keeping systems compliant with the latest regulatory requirements.
Seamless integration with key systems
Disconnected systems create manual workload and inconsistencies across finance, fundraising, and payroll. Cloud accounting software integrates with donor management platforms, CRM tools, and payroll systems, ensuring that all financial data is centralised. This reduces duplication, improves accuracy, and eliminates time-consuming reconciliation processes.
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Why Sage Intacct Is the Ideal Choice for Nonprofits
Not-for-profits need a financial management system that reduces manual workload, ensures compliance, and provides real-time insights. Sage Intacct is designed to handle fund accounting complexities, automate reporting, and integrate seamlessly with other systems, giving finance teams the tools to work efficiently and transparently.
Here is why not-for-profit organisations worldwide love Sage Intacct:
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Compliant with SORP & FRS 102
Regulatory requirements can create significant reporting challenges. Sage Intacct simplifies compliance by automating SORP (FRS 102) reporting, maintaining a full audit trail, and ensuring financial transparency.
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Gift aid & grant management
Managing restricted and unrestricted funds is critical for not-for-profits. Sage Intacct provides clear fund allocation, real-time tracking, and built-in Gift Aid management, ensuring every funding source is properly accounted for.
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Real-time budgeting & forecasting
Unpredictable income makes budgeting complex. Sage Intacct enables multi-scenario forecasting, real-time budget tracking, and automated variance analysis, allowing finance teams to make informed decisions with confidence.
Disconnected systems create inefficiencies. Sage Intacct integrates with payroll, donor management, and CRM platforms, ensuring accurate financial data across the organisation without manual reconciliation.
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Trusted by nonprofits worldwide
Sage Intacct is used by leading not-for-profits to improve financial visibility, automate processes, and ensure compliance. With the ability to scale as organisations grow, it provides the flexibility needed to support long-term financial sustainability.
Choosing the Right Sage Intacct Implementation Partner
Selecting the right accounting software is only half the challenge. A system is only as effective as its implementation, and without the right support, even the best software can become a burden rather than a solution. That’s why choosing an implementation partner that understands not-for-profit finance is just as important as the software itself.
Why your implementation partner matters
A poorly executed implementation can lead to data migration issues, workflow inefficiencies, and a system that doesn’t fully support your organisation’s needs. Working with a partner that specialises in not-for-profits ensures:
- A smooth transition, so you’re up and running without disruption.
- A setup tailored to your organisation, aligning with your financial structure and reporting needs.
- Ongoing support and training, so your team can use the system effectively from day one.
What you should expect
Not all software providers understand the financial complexities of not-for-profits. A good implementation partner should:
- Ask the right questions – How do you track restricted funds? What are your reporting challenges? What integrations do you need?
- Customise the system to fit your needs – Ensuring the software works for your processes, not the other way around.
- Provide post-implementation support – Offering training, troubleshooting, and ongoing optimisation as your organisation grows.
How Accord supports your organisation
At Accord, we don’t just simply implement Sage Intacct — we make sure it works for you. Our team specialises in helping not-for-profits move to a modern financial system with minimal disruption. We ensure:
- A seamless transition, handling data migration and setup with accuracy.
- Tailored configuration, ensuring your accounting system aligns with your reporting, fund management, and compliance needs.
- Dedicated support, providing training and ongoing guidance to help you get the most out of Sage Intacct.
Conclusion
Financial management in not-for-profits comes with challenges that go beyond standard accounting. Tracking fund restrictions, managing compliance, and maintaining transparency all require a system that can adapt to sector-specific needs. The right accounting software reduces administrative burden, improves financial oversight, and ensures accurate reporting.
Sage Intacct provides the tools needed to streamline financial processes, automate reporting, and integrate seamlessly with other key systems. But selecting the right software is just one step — choosing the right Sage Intacct implementation partner ensures you get the most out of your investment.
If your organisation is looking for a financial management solution that delivers compliance, automation, and real-time insights, our team at Accord Consulting is ready to help. Let’s discuss your needs over a quick chat:
Book your free Discovery Call here