Peter Gotham is chair of the Charity and Voluntary Sector Group at the Institute of Chartered Accountants in England and Wales.
Many smaller charities have problems getting software to deal with the complexities of their accounting. Charities need to satisfy specific legal requirements and often specific funder requirements. These charities have to make do with less flexible software, even though they face the same level of complexity in their accounting and reporting requirements as larger charities.
The requirements imposed on the sector, and the increasing demand from trustees and senior staff for reliable and informative reporting, make this of increasing importance.
Microsoft Windows has given users the expectation that they will see information in a way that helps them and will be able to track back to the source of that data. When advising boards and senior staff, I often find that giving people 'ownership' is a key aspect in terms of improving the reliability of the information (because the finance staff are then in closer touch with project staff) and giving the board and senior staff more purchase on (or ability to manage) the organisation. It improves trust in the figures, reduces the need for parallel accounting systems and cuts down on errors and duplication of work.
Taking basic functionality for granted, any reasonable accounting package aimed at the sector should have a number of attributes.
The most important feature is ease of use by both finance and project staff. Finance staff may well be without formal accounting qualifications - and, if project staff can directly access the data, it assists in correcting errors. In the process, it will give project staff ownership of the figures.
Windows-type functionality, such as an ability to interrogate the dataset by 'drilling down' into all reports, and a facility to adjust report parameters on the screen - for example, by specifying the period or project - is also a good starting point.
The other necessary attributes are a facility to budget by project, to report across year-ends and to report on cash - thereby addressing a common funder-reporting issue and possible cash-flow concerns.
Excel integration is valuable, but this facility should not be an essential part of a management account reporting system. Bearing in mind the increasing need for larger charities to obtain reports from international branches, it would be helpful to have training and support available across the whole organisation, ideally in local languages.
Much of this is available from some software. However, some leading software packages are a long way short of what is required.
- Smaller charities find it hard to get software that deals with the complexities of their accounting
- The most important feature of any software package is ease of use by finance and project staff
- Windows-type functionality and a facility to budget by project are also useful.