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Best accounting software for small charity?

Maniprabha nolastname Director at Globe Community Project Posted 4 months ago

Hi there, we're a small charity, £125K income, but with so many different grant streams our Management accounts spreadsheet is getting overwhelmed! Projects funded by multiyear grants of different lengths and year ends are increasingly hard to track.

Can anyone recommend a good cloud-based accounting package that's affordable but good for tracking different funding streams and generating reports? Thank you

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Andy Lucas Staff PANEL

Consultant | Bookkeeper | Proposal Writer at Lucas Bright Consultancy 4 months ago

I would recommend QuickBooks for exactly that purpose - tracking different grant streams. I've been using it for many years for a number of my charity clients and it's been working very well for them. It has an option in the settings called "classes". You can create a class for each grant stream and then either pull an individual report for just one particular grant or a big report showing a column for each grant stream. Every time you record a transaction in the software you just need to select which class it is for or you can even split it between multiple classes e.g. when recording payroll you could split an employees gross wages across several grants if you wish. It's very flexible and easy to use. I've sent you a message about it too.

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Aynalem Abraham Desta Staff PANEL

Operations Director at Praise and Gratitude 4 months ago

Hello I recommend quick book

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Kim Mullard Staff PANEL

Director of Finance & Operations at Action on Postpartum Psychosis 4 months ago

We use Liberty Accounts. It's all set up to manage different funds - you can have lots of different restricted and unrestricted funds and it will produce a SOFA at the touch of a button - either for the whole organisation, an individual fund, or split down by fund. It's great for reporting on income and expenditure for different funds, but I think you'd still need perhaps a simpler version of the spreadsheet.

Liberty is great for fund accounting "out of the box", but it's not easy to see staffing costs across projects unless you have a separate line for each staff member.

We compared Liberty, Xero and Quickbooks before chosing Liberty. The cost would depend on how many transactions you have and whether you want to run payroll through it. Costs would be higher if you have a lot of voluntary fundraising (and therefore a lot of small transactions breaching the monthly inclusive limit)

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Maniprabha nolastname Staff PANEL

Director at Globe Community Project 4 months ago

Kim Mullard Hi Kim, thanks for sharing your experience in detail, allowing us to benefit from all your research, this is very kind. Being able to have lots of different funds sounds good, and SOFA at the touch of a button also fantastic! I can see your charity is doing well with sustained year on year growth, I'm sure the good financial management is helping underpin this. We are small enough to be able to have a line for each staff member, and don't have that many transactions (nor are we likely to in the foreseeable future) so Liberty looks like a strong contender.

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Hirsch Sharma Staff PANEL

CEO at Boardroom Consultants 4 months ago

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Hi Maniprabha

XERO is a cloud based software that can do all this. The training and problem solving is free. At the moment you can get it for a big discount for 6 months.

Warm regards

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Maniprabha nolastname Staff PANEL

Director at Globe Community Project 4 months ago

Hirsch Sharma Thank you Hirsch

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Stuart Davis Staff PANEL

Consultant at Stuart Davis Group 4 months ago

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Hi Maniprabha,

The short answer, I'm afraid, is that there is no good software that can both manage everything a charity needs but is also affordable for a small charity.

The main reason is the complexity you are facing. To properly manage this, you need to be able to code things to differnt funds, preferably on different budget lines, so that you can spit out donor reports as well as your own internal ones. The more codes you need, the more expensive the system needs to be to cope with these. If you also then factor in things like foreign exchange if you are working internationally, or different entities if you are part of a wider group, and the complexity gets even bigger.

Most software at the cheaper end is built for individuals and small companies, and these simply don't have the complexity of a small charity.

So, instead, the question is what is the least worst option for you, and where can you compromise on what you need.

The four most usual ones for small charities are Xero, QuickBooks, Sage and Liberty Accounts.

- Xero is good if you are relatively simple - single entity, no foreign exchange. There are two codes you can use to split things by donor project and for your internal reporting, though you can't do anything particularly complicated.

- QuickBooks works quite well if you have foreign exchange, but again you ideally need to be a single entity. They have Classes that you can use to separate donor funds, and you can get into some detail with these. It can sometimes be a pain when you want to do allocations of staff time and overheads, as these need to be done manually.

- Sage 50 or 200 are good options if you need a few codes, and can handle different legal entities. It's FX is OK. The interface is not intuitive though, and will need some getting used to. Reports generally have to be manipulated outside the system. NB, Sage Intacct is a much bigger system, much more expensive, and works entirely differently, so don't get hoodwinked into going down that road.

- Liberty Accounts is not as well used these days as it once was, and can come across as quite clunky. But it is set up for fund reporting, so might be worth a look.

Happy to have a chat to see what might suit you best, if that helps.

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Maniprabha nolastname Staff PANEL

Director at Globe Community Project 4 months ago

Stuart Davis Thank you Stuart, that is really helpful, and helps me move forwards on a decision!

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